Welcome To Trump's Third World America

This morning Carolyn Maloney,vice chair of the Joint Economic Committee released a report, Retirement Insecurity, meant to coincide with the 84th anniversary of the signing of the Social Security Act. The report shows that, while Social Security has been successful in preventing millions of Americans from falling into poverty, the two other pillars of America's retirement system are in crisis: personal savings and pensions. "Half of American households," it reads, "are at risk of being unable to maintain their standard of living in retirement. Even those who take extraordinary steps-- like working until 65 (five years past the current average retirement age), annuitizing all financial assets or reverse-mortgaging their homes-- may not be able to maintain their living standards. Worse, forty percent of workers ages 50-60 who are not currently poor would be poor if were they retire at age 62. Women, Blacks and Hispanics are at substantially greater risk of being poor in retirement."

Earlier in the week, Scott Paul, president of the Alliance for American Manufacturing, wrote that "Senate and House negotiators will soon meet to decide whether to advance legislation to ban Chinese-owned or controlled companies from using taxpayer money to build U.S. rail cars and buses. The Senate already passed language to ban both, but the version passed by the House applies only to rail. And if folks like GOP Leader Kevin McCarthy get their way, nothing will happen. There’s widespread bipartisan concern-- and growing-- about the litany of security risks posed by allowing companies backed by the Chinese government to make America’s rail cars and buses."

And in rural America, Trump's policies have already brought on a bad recession, dairy farms being hit hardest. According to the American Farm Bureau farm loan delinquencies and bankruptcies are rising. And among the hardest hit states are red counties in Wisconsin, Minnesota, Kansas, Georgia, California, Minnesota, Nebraska, Texas and New York. Trump areas of Iowa, Pennsylvania and North Carolina are also hurting badly.

Following several years of low farm income and rising debt levels, a review of Federal Deposit Insurance Corporation quarterly call report data reveals that the delinquency rates for commercial agricultural loans in both the real estate and non-real estate lending sectors are at a six-year high.

For the first quarter of 2019, 2.5% of commercial real estate loans in agriculture were more than 30 days past due, up from 2.1% in the prior quarter and above the long-run average of 2.1%. Similarly, 2.2% of non-real estate loans in agriculture held by commercial lenders were more than 30 days past due, up from 1.5% in the prior quarter and above the long-run average of 1.6%. The first quarter of 2013 was the last time delinquency rates were this high for commercial lenders. Figure 1 highlights the delinquency rate for both real estate and non-real estate loans held by commercial lenders.

While the delinquency rates are well below the levels experienced following the recession, they are above the historical average and trending in the wrong direction due to several years of poor farm income exasperated by extreme weather events and ongoing trade disruptions.

...In the year ending June 2019, Chapter 12 farm bankruptcies increased in every region in the United States, except for the Southeast. However, there were still a significant number of bankruptcies filed in that region. The Midwest and Southeast had the highest number of filings, 240 and 100 bankruptcies in the past year, respectively. The Midwest is up from 215 filings from the previous year to 240 filings, an increase of 12%. The biggest increase in bankruptcies, 50%, occurred in the Northwest, which includes Washington, Oregon, Idaho, Montana and Wyoming.

Across the U.S., farm loan delinquencies and Chapter 12 bankruptcies are rising. The deteriorating financial conditions for farmers and ranchers are a direct result of several years of low farm income, a low return on farm assets, mounting debt, more natural disasters and the second year of retaliatory tariffs on many U.S. agricultural products.

Meanwhile the federal deficit is at $3.7 trillion, Trump being the worst fiscal steward in living memory. According to Newsweek, the ridicule of Trump and his incompetent economic team is bipartisan. So far this year Trump has added $867 billion to the deficit.

The massive 27 percent deficit increase from last year is only expected to worsen as Trump's $1.5 trillion tax plan from a year-and-a-half ago fails to "pay for itself" as the White House previously claimed. Congress also passed another over-budget spending bill earlier this month. The Treasury Department report predicted on Monday a $1 trillion deficit in two months at the end of the fiscal year and analysts noted it's the most money the federal government has spent in the first 10 months of a fiscal year since 2009 efforts to pull out of the Great Recession.

"In case there were any remaining doubts about whether Trump's tax cut would pay for itself, it hasn't," Chris Lu, a previous White House cabinet secretary and deputy secretary of Labor under former President Barack Obama, said on Tuesday.

Fiscal critics blasted the Tax Cuts and Jobs Act of 2017 which was passed by a Republican majority in both chambers of Congress before being signed into law by Trump that December. This week, both Democrats and Republicans criticized the budget passed August 1 which suspended the debt ceiling until the end of July 2021 and put spending levels about $320 billion above limits set by a 2011 law. Trump championed the budget deal as a "great victory" for the U.S. military and veterans as the Defense Department was allotted record amounts of taxpayer money.

Kentucky GOP Senator Rand Paul said earlier this month the budget deal marked the "death of the Tea Party movement" among fiscal conservatives. Twenty-three Republicans joined five Democrats to oppose the budget deal.

"Great work by Mitch McConnell in deepening our budget deficit. I guess it was worth it to give his rich friends and donors a tax break," said Amy McGrath, the Kentucky Democratic challenger to the current Republican Senate Majority Leader.

"Revenue up 3 percent, spending up 8 percent equals [a] deficit of $897 billion in 10 months. DC doesn't care," remarked former GOP Florida Governor Jeb Bush Tuesday. He also commended Arizona Republican Governor Doug Ducey for balancing the state's budget, "Great work Governor Ducey. Is Washington watching?

..."The part of DC with all the power at the time wanted its taxes cut and insisted this wouldn't happen," CNBC economy analyst John Harwood replied to Bush via Twitter Tuesday.

Harwood went on to label Bush's "DC doesn't care" comment inaccurate and an "evasion of accountability" given the numerous debates and deals cut between congressional Republicans, Democrats and Trump Treasury Secretary Steve Mnuchin.

"Maybe electing the guy with all the bankruptcies and debt was a bad idea?" quipped writer Molly Jong-Fast.

"It seems after Obama, the elected conservatives have conveniently dropped 'fiscal' from their descriptions. I can ignore the false talking points but I think neither side brings this up because the spending means votes until the dollar becomes worthless," replied a pro-Trump Twitter critic.

Many top Republicans and fiscal hawks remained silent or offered deflections after the Monday Treasury report was released, prompting mockery from several conservative-leaning social media users. "Let's go to Capitol Hill to get a response from budget hawk Republicans," replied one critic, displaying a picture of crickets.

Trump has been a very weak, even disastrous, steward of the American economy and, despite his endless boasting and contemptible gaslighting, the stock market has performed very poorly since he and his entirely incompetent team of imbeciles occupied the White House. And the Great Trump Recession hasn't even started yet-- except in farm country. In terms of the stock market, the only recent president that has done worse than Trump is George W. Bush. This list represents how stocks performed under all recent presidents since Ronald Reagan, from best to worst:

• Bill Clinton +210%
• Barack Obama +182%
• Ronald Reagan +118%
• George HW Bush +51%
• Señor Trumpanzee +25%
• George W. Bush -40%

It's As If Ryan And Trump Are Determined To Eviscerate The Middle Class With Their Tax Plan

On Thursday we looked at how the Trump-Ryan tax cuts for the rich will be toxic for Republicans in states where the elimination of the federal deduction for state and local taxes is significant and will mean as much as $20,000 annually flowing from the bank accounts of middle class taxpayers into the bank accounts of multimillionaires and billionaires. Since then, Maine Republican Susan Collins has told The Hill that she's not ready to commit to voting for the package. "Until I see the specifics of the bill obviously I’m not going to take a position on it," she said. One detail she's not likely to be a fan of is the sharp cut in the deductibility of 401 (k) contributions. Ryan is eager to cut that to provide bigger tax breaks for the wealthy. Saving though deductible 401 (k) plans used to be routinely supported by Republicans as an opportunity to help middle class taxpayers save for retirement. The Trump-Ryan GOP doesn't care at all about middle class taxpayers, other than as fodder for soundbytes.

Ryan and Trump and their teams are looking for short term gains-- regardless of how badly they hurt the long-term financial situations of Americans-- to help finance big tax cuts for their campaign contributors.

It is unclear if Republicans will ultimately include a cap on contributions in the tax bill that they are expected to release in the coming weeks. Such a move would almost certainly prompt a vocal backlash from middle-class workers who save heavily in such retirement accounts and from the asset management industry.

The proposals under discussion would potentially cap the annual amount workers can set aside to as low as $2,400 for 401(k) accounts, several lobbyists and consultants said on Friday. Workers may currently put up to $18,000 a year in 401(k) accounts without paying taxes upfront on that money; that figure rises to $24,000 for workers over 50. When workers retire and begin to draw income from those accounts, they pay taxes on the benefits.

Rumors have circulated for months that negotiators were debating including a cap as a way to help offset the revenue loss from a reduction in business tax rates that Republicans have put at the center of their plan. Reducing contribution limits would be, in effect, an accounting maneuver that would create space for tax cuts by collecting tax revenue now instead of in the future.

Such a move would be likely to push Americans to shift their savings to so-called Roth accounts, where contributions are taxed immediately, and not when they are drawn out as benefits. That would increase federal tax receipts for the short run.

The congressional Joint Committee on Taxation estimates that tax exclusions for individual retirement contributions will cost the federal government $115 billion for the 2018 fiscal year. That is just a fraction of the $1.5 trillion tax cut that Republicans are aiming to enact.

In addition to being politically problematic, including a cap could also complicate the tax bill’s prospects in the Senate. Under the rules of budget reconciliation-- the method Republicans are employing to avoid a Democratic filibuster of the bill-- legislation cannot increase budget deficits after a decade. Shifting revenue by lowering 401(k) limits “raises money early, but loses money late, and that’s exactly the opposite of what you want in a reconciliation bill,” said Rohit Kumar, a former Senate aide who leads the tax policy services practice at PricewaterhouseCoopers, an accounting firm, in Washington.

Republicans drafting the tax bill have kept its details closely held, and they would not comment on Friday about whether 401(k) changes were under discussion. Republicans on the House Ways and Means Committee “are developing pro-growth tax reform policies that will encourage and support retirement savings for all Americans,” a committee spokeswoman said.

The tax framework that President Trump and congressional Republican leaders released last month promised to retain “tax benefits that encourage work, higher education and retirement security.” It left the door open to changes in the current system, saying that “the committees are encouraged to simplify these benefits to improve their efficiency and effectiveness.”

Democrats have seen firsthand the perils of proposing changes to savings accounts. In 2015, an outcry forced President Barack Obama to quickly back off his proposal to change the tax benefit of college savings plans known as 529 accounts.

On the Senate floor on Thursday, Senator Gary Peters, Democrat of Michigan, warned that the Republican majority was “keeping open the possibility of raising taxes on Americans who are trying to save for their retirement.”

Ryan's opponent, iron worker and union activist Randy Bryce, was appalled by the GOP plan. "If this was something being proposed by Democrats," he told us today, "every city would have it’s streets filled with every working person who had enough gas money to get there."

Jared Golden is the progressive candidate running for the sprawling northern Maine district occupied by Trump rubber stamp Bruce Poliquin. Jared is the Majority Whip of the Maine state House and he's not liking what he sees of the Trump tax cuts for the wealthy. He's not happy about the plans they're making to cut federal tax deductions on retirement accounts. "On the 401(k) savings," he told us, "Paul Ryan and Bruce Poliquin are destroying the middle class. They don't understand how hard we work for our wages and the fact that it's getting harder and harder to save for retirement. Their priority is to cut taxes for the rich even if it's at the expense of the middle and working class. I don't care what party label you have behind your name, if you agree with me that Congress should be helping working people save for a comfortable retirement then I am ready to work with you." (I think he was talking about Susan Collins there.)

James Thompson is the Kansas Berniecrat who nearly turned the Wichita-based 4th district blue in a special election this year-- and without a lick of help from Pelosi and her DCCC. They're not helping this cycle either. They hate progressives. Thompson saves his fire for reactionary Republicans harming working families. This was his take on the latest GOP shenanigans with the Ryan tax plan:

The filthy rich are not satisfied with paying poverty wages and overtaxing the middle class while cutting taxes for the top 1%. Now they want to rob us of our retirements too by limiting the amounts we can contribute tax free to our 401Ks from the current $18,000 per year to just $2400 per year. They are doing this in order to fund their tax cuts for their billionaire buddies and corporate lobbyists. The vast wealth of this country has already been re-distributed to the top 1% over the past 40 years through the use of "trickle down economics" thereby creating an income disparity the likes that has not been seen in this country. Yet, their greed knows no bounds. When trying to determine how to pay for their cuts to the filthy rich cronies of Donald Trump, the Trump Republicans decided to attack the retirement benefits of our middle class. If this attack on the middle class is allowed by the Republican controlled Congress, the middle class will be devastated, more people will be unable to save for retirement and putting an even bigger strain on Medicaid, Medicare, Disability and other social programs in the United States. When I make it to Congress in 2019, I will fight everyday to protect working Americans from these types of attacks on our middle class. The middle class needs tax relief, not the richest 1% of this country. It is time to stand up and fight for the middle class; fight for fair taxation, and fight for America.

Kia Hamadanchy is one of the progressives running for the Orange County seat occupied by Trump/Ryan rubber stamp Mimi Walters. He sure wouldn't be voting for this toxic tax plan. "Just the fact that the California GOP invited Steve Bannon to address their annual convention shows how delusional and out of touch they really are. I'm actually kind of surprised Bannon didn't have Sherrif Joe Arpaio opening for him considering the way the state party appears to be going about their business. There is a reason that it's very possible that there won't be any Republicans on the statewide ballot on 2018 and its because time and time again the California GOP continues to embrace the xenophobia and extremism of figures like Bannon. That's why they are going to lose every single swing seat in 2018 and why they are on the path to permanent extinction in the state of California."

The other outstanding progressive running in CA-45 is Katie Porter, who's worked with Elizabeth Warren on these exact kinds of issues. She told us this morning that "Trump, Ryan, and their staunch allies, like my opponent Mimi Walters, are putting tax giveaways for the rich ahead of retirement security for middle-class Americans. As a consumer advocate, I’ve seen firsthand the importance of encouraging middle-class families to save for their futures. This policy would hurt families and leave our nation on fragile financial ground."