President-elect Donald Trump’s nascent administration on Wednesday began outlining the contours of its strategy for jump-starting the nation’s economy, including how it would overhaul the tax code, rethink trade agreements and directly negotiate with major corporations.
Treasury secretary nominee Steven Mnuchin rejected claims that Trump’s tax program would benefit mainly the wealthy, instead highlighting plans for a child-care tax credit and a middle-class tax cut.
“There will be no absolute tax cut for the upper class,” he said on CNBC. “There will be a big tax cut for the middle class.”
Trump’s strategy secured an early victory this week when the president-elect persuaded air-conditioning manufacturer Carrier not to move up to 1,000 jobs from Indiana to Mexico. The negotiation was an unusual move for a modern president, but Mnuchin suggested such direct intervention would be an important tool under the new administration.
“It starts with an attitude of this administration,” Mnuchin said Wednesday on CNBC. “This president, this vice president-elect is going to have open communications with business leaders.”
Mnuchin and Trump’s pick for commerce secretary, Wilbur Ross, also called for moving away from the broad multinational free trade agreements that have shaped the global economy over the past generation in favor of bilateral deals. But they stopped short of embracing the president-elect’s most heated election rhetoric, calling for double-digit tariffs on imports from China and Mexico.
Turning Trump’s sweeping campaign promises into reality could prove a daunting challenge for his newly named economics team, which includes Todd Ricketts, co-owner of the Chicago Cubs, as deputy commerce secretary. Trump’s proposals are both expansive and aggressive, starting with a pledge to create 25 million jobs and push growth to 4 percent annually.
Many economists have questioned whether that is even possible in the face of an aging workforce and slower growth in productivity. In addition, rewriting the tax code would be a mammoth undertaking that has eluded Republican lawmakers since the 1980s, and independent analysts cast doubt on whether Trump can make the numbers add up.
On Wednesday, Trump’s new economic team said that overhauling taxes — particularly cutting the corporate tax rate — would create incentives for businesses to invest and hire more workers, eventually resulting in higher tax revenue. But an analysis by the independent Tax Foundation estimated that Trump’s plan would cost at least $2.6 trillion over the next decade, even after accounting for stronger growth.
Mnuchin and Ross reiterated the administration’s commitment to cutting taxes for the middle class, but that remains a key difference between the president-elect’s campaign plan and the tax blueprint put forth by GOP leaders on Capitol Hill.
The congressional plan, like Trump’s, would cut taxes for the wealthy and for corporations, but it would not do nearly as much as Trump would to cut taxes for lower- and middle-income Americans.
Reconciling the two will be a major sticking point in any tax-reform negotiations next year, although House Speaker Paul D. Ryan (R-Wis.) praised Trump’s nominees on Wednesday.
“I am excited to get to work with this strong team to fix our broken tax code, ease the regulatory burden on American businesses, and grow our economy,” he said.
Mnuchin also pushed back against analysis by the nonpartisan Tax Policy Center that found the bulk of the benefits under Trump’s plan would go to wealthy households, while some single-parent households would end up paying higher taxes.
“We’re going to have the most significant middle-income tax cut since Reagan,” he told reporters.
Business groups welcomed the focus on tax cuts and praised Trump’s nomination of Cabinet officials with industry backgrounds.
“They understand that modernizing our outdated, anticompetitive tax system will be the most effective way to produce the economic growth that puts more people to work in good jobs,” said John Engler, president of the Business Roundtable.
On trade, Mnuchin and Ross sounded a somewhat softer note than Trump did on the campaign trail. During the election, Trump called China the world’s “single greatest currency manipulator.” But on Wednesday, his top economic advisers demurred when asked whether they would take formal action against the country.
“If we determine that we need to label them as a currency manipulator, that’s something the Treasury would do,” Mnuchin said.
And though they expressed disapproval of sweeping multinational trade agreements in favor of bilateral deals with other countries, they backed away from threats to impose double-digit tariffs on imports from Mexico and China.
“Everybody talks about tariffs as the first things. Tariffs are the last thing. Tariffs are a part of the negotiation,” Ross said on CNBC. “The real trick is going to be increase American exports.”
Trump’s efforts to keep Carrier in Indiana underscore both the potential benefits and pitfalls of his hands-on approach. Under the agreement, the company will receive tax incentives from the state economic development corporation to keep about 1,000 jobs in the state, said John Mutz, a member of the agency’s board and the former lieutenant governor of Indiana.
“The dynamics of the situation changed,” Mutz said.
Mutz said he had not reviewed the final terms of the agreement and could not provide details about how much money the company would receive or over what period. If the agreement is only for a few years, Trump’s efforts might give workers only a temporary reprieve.
Experts said custom deals such as the one struck with Carrier could create a haphazard system in which the government winds up picking corporate winners and losers, said Timothy Bartik, an economist at the nonpartisan W.E. Upjohn Institute for Employment Research. Instead, he said, governments should focus on providing training for workers and investing in research and development to encourage businesses to invest and grow.
“The trouble with striking just individual deals is that means that some people are subject to different rules,” Bartik said. “If you think of things as deals, who gets the deals? Does it become a system of favoritism?”
Although the agreement was celebrated as a win in the United States, officials in Mexico faced growing uncertainty.
Carrier had already begun building a new factory in the outskirts of the city of Monterrey, although company officials would not say whether any of the 2,000 employees originally projected to staff it had been hired. Paulo Carreño, a deputy foreign minister in charge of North American relations, said that every company on both sides of the border “has full liberty to decide where to put their own business.”
“What we have created with the U.S. and Canada is we not only buy and sell things with one another, we build things together,” he said. “We need to not only keep this relationship but to deepen it.”
Jim Tankersley and Josh Partlow contributed to this report.
Indiana officials agreed to give United Technologies Corp. $7 million worth of tax breaks over 10 years to encourage the company’s Carrier Corp. unit to keep about 1,000 jobs in the state, according to people familiar with the matter, a deal struck after intense criticism of Carrier by President-elect Donald Trump on the campaign trail.
The heating and air conditioning company will invest about $16 million to keep its operations in the state, including a furnace plant in Indianapolis that it had previously planned to close and shift the work to Mexico, the people said.
Mr. Trump, who toured the Carrier plant in Indianapolis Thursday with Vice President-elect Mike Pence, said companies aren’t going to leave the U.S. “anymore without consequences.”
After publicly shaming Carrier Corp. throughout the presidential campaign, Donald Trump announced a deal on Thursday with the company’s parent to keep 1,000 jobs in Indiana in exchange for state tax breaks. Is this model repeatable with other companies? WSJ’s Jason Bellini has #TheShortAnswer. Photo: Getty
The deal would cover 800 Carrier workers from the Indianapolis furnace plant and an additional 300 research and headquarters positions that weren’t slated to go to Mexico, according to another person briefed on the deal.
The company still plans to move 600 jobs from the Carrier plant to Mexico. It also will proceed with plans to close a second plant in Huntington, Ind., that makes electronic controls, moving 700 other jobs to Mexico.
Carrier has previously said it expected to save about $65 million a year by shutting the plant and shifting its operations to Monterrey, in the state of Nuevo León, where wages average about $11 a day, plus benefits. The average wage of the Indiana jobs that will be retained is $30 an hour, according to a document reviewed by the Journal.
Mr. Trump has played up the partial rescue as a sign he can deliver on campaign promises. Through the presidential primary and general election, the Republican businessman had made an example of Carrier, at one point threatening to put a 35% tariff on Carrier imports unless it reversed its decision to move the jobs to Mexico.
“This is a big win for the incoming administration but an even bigger win for the people of Indiana,” transition spokesmanJason Miller said Thursday. The transition team has declined to provide details about the cost of keeping those jobs in the state.
Mr. Trump also will host an evening rally at U.S. Bank Arena in Cincinnati, a Republican stronghold. Ohio was one of six states the Republican captured after being won twice by Democratic President Barack Obama. That is the start of a broader “thank you” tour that is expected to include stops in Florida and across the Midwest.
Sen. Bernie Sanders, who during his presidential campaign had also attacked Carrier and other firms shifting work abroad, criticized the deal on Thursday, saying Mr. Trump failed to make good on his campaign pledge to save all of the jobs from moving to Mexico.
The deal also creates a bad precedent, Mr. Sanders contended, writing that Mr. Trump “has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.”
“I’m pretty happy that we’re keeping jobs in America, aren’t you?” House Speaker Paul Ryan (R., Wis.) said Thursday. He said he didn’t know the details of the agreement, but that governors’ responsibilities include working to keep jobs in their states. “Mike Pence is still the sitting governor of Indiana. This is what governors do,” said Mr. Ryan.
The deal that emerged from weeks of negotiations between United Technologies brass and officials in the Trump camp led by Mr. Pence, the Indiana governor, is a relatively standard package of state incentives, according to people familiar with the agreement.
On Wednesday, Carrier said “incentives offered by the state were an important consideration,” without providing further details.
“This agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the U.S. and of American workers moving forward,” the company said.
In addition to Carrier, United Technologies makes Pratt & Whitney jet engines and Otis elevators. It employs about 200,000 people, about one third of them in the U.S.
People familiar with the negotiations said the company and Mr. Pence’s team also discussed a wide range of priorities, including United Technologies’ interest in a corporate tax overhaul, and regulations the company feels have been a burden to its business.
The federal government is also an important customer. The U.S. military accounts for about 10% of United Technologies’ $56 billion in annual sales, for products like the engine for the F-35 Joint Strike Fighter.
Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, said he would be asking more about the Carrier deal and said he would inquire whether there were promises about defense contracts.
“I want to know whether the president-elect promised special federal tax breaks for a single company,” Mr. Wyden said Thursday. “I want to do everything I can to keep jobs in the United States, but there are some questions here.”
For Mr. Trump, the trips to Indiana and Ohio meant there were no announced meetings on Thursday with prospective cabinet members. Those meetings will resume on Friday in New York, where Mr. Trump is scheduled to visit with Sen. David Perdue (R., Ga.), retired Adm. Jay Cohen, Florida Attorney General Pam Bondi, former United Nations Ambassador John Bolton, and Sen. Heidi Heitkamp (D., N.D.).
—Michael C. Bender and Richard Rubin contributed to this article.
Deal for Carrier to Keep U.S. Plant Open May Hinge on Tax Overhaul
Talks include the conglomerate’s plans to shift more than 2,000 jobs from Indiana to Mexico
President-elect Donald Trump’s campaign pledge to save jobs at a Carrier plant in Indiana was framed around free trade, but negotiations about corporate tax law changes could be just as important to any possible deal.
Representatives for the incoming administration, including Vice President-elect Mike Pence, have held wide-ranging policy talks with top-ranking executives at Carrier’s parent company, United Technologies Corp., said a person familiar with the discussions.
The discussions include the conglomerate’s plans to shift more than 2,000 jobs from Indiana to Mexico, but have covered other issues, including the company’s wishes for a tax overhaul that Mr. Trump and Republicans have promised to pursue early in his administration, this person said.
United Technologies CEO Gregory Hayes has pledged to work with the new administration despite Mr. Trump’s attacks on the planned Carrier plant closure during his campaign. It wasn’t clear what role Mr. Trump himself has played in the discussions, though he said in a tweet on Thanksgivng he was working on the matter.
A spokeswoman for Mr. Trump didn’t immediately respond to a request for comment.
The incoming president’s goal is to show that he can keep some of his boldest campaign promises, and the CEO needs to keep peace with the federal government, a critical customer for products like its jet fighter engines. Military sales account for roughly 10% of the company’s $56 billion annual total, the company says.
United Technologies, like other globalized U.S. companies, also has large reserves of cash overseas—profits that corporations are waiting to repatriate to the U.S. until Congress cuts the level of tax they would pay. The company reported that 85% of its total cash, or more than $6 billion, was overseas, as of the end of 2015.
One idea backed by House Republicans but not Mr. Trump would be to create a two-tiered tax rate that would help companies that have used foreign profits for factories and other assets they can’t easily repatriate.
Large U.S. companies also want a lower corporate tax rate.
Given the variables of the company’s interests and the three-year window over which United Technologies planned to stagger the job cuts in Indiana, there is the potential for a deal, the person familiar with the discussions said.
In April, at a rally near Carrier’s Indianapolis plant, Mr. Trump pledged to impose a 35% tariff on air conditioning units the company built in Mexico for sale in the U.S.
Democratic Sen. Bernie Sanders said Saturday that Mr. Trump must make it clear that if United Technologies “wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico.”
Though only a portion of overall sales at United Technologies—which makes Pratt & Whitney jet engines, Otis elevators and an array of building equipment—defense is a key focus of the conglomerate. The company is the sole provider of jet engines for the F-35 Joint Strike Fighter.
Carrier said on Thanksgiving Day that it didn’t have any changes to announce, roughly an hour after Mr. Trump tweeted that he was “making progress” in convincing the company to keep the jobs in Indiana.
In Indianapolis, Mr. Trump’s message engendered only muted optimism.
“For us, we pretty much think it’s a done deal that they’re moving, and don’t think he can do anything to change that, although we don’t want to give up hope,” said Kelly Ray Hugunin,business representative for United Steelworkers Local 1999, which represents 1,400 workers at a Carrier plant that makes residential furnace equipment.
The union hasn’t received any word from the company or the Trump administration about any talks to prevent jobs moving to Mexico, said the union local’s president, Chuck Jones.
“If Trump’s got a trump card to play on this,” Mr. Jones said Saturday, “even though Carrier’s saving $65 million a year [by closing the plants], it’s that he would try to leverage some of the billions of dollars that United Technologies has on military contracts.”
—Richard Rubin contributed to this article.
FLASHBACK: OBAMA MOCKS TRUMP FOR PROMISING TO KEEP CARRIER PLANT IN U.S.
June, President Obama participated in a PBS townhall and was asked about Trump’s promise to keep Carrier’s Indiana plant in the U.S. The townhall participant, a member of the Steelworkers Union employed by Carrier, asked Obama if anything could be done to stem the tide of jobs flowing out of the country, as Trump had recently promised to do.
“Those jobs of the past are just not going to come back,” Obama told the employee.
Instead, Obama advised workers losing their jobs to learn how to adapt their skills to “some of these new technologies,” in particular the “clean energy sector.”
“Let’s focus on those,” he suggested.
Obama also singled out Trump for derision, saying:
When somebody says, like the person you just mentioned who I’m not going to advertise for, that he’s going to bring all these jobs back, well how exactly are you going to do that? What are you going to do? There’s — there’s no answer to it. He just says, “Well, I’m going to negotiate a better deal.” Well, how — what — how exactly are you going to negotiate that? What magic wand do you have? And usually, the answer is he doesn’t have an answer.
On Wednesday, the White House downplayed Carrier’s decision to remain in the U.S.
Story 2: U.S. Border Patrol Agents Assaults Up 200% From Last Year — Will Trump Rollback The 30-50 Million Illegal Aliens Invasion of The United States or Give 95% Plus Of The Illegal Aliens Citizenship? — Trump Will Give Them Citizenship — Touch Back Amnesty! — All The Illegal Aliens In The United States Are Criminal Illegal Aliens Mr. Trump! — Once This Happens — His Supporters Will Abandon Republican Party and Dump Trump! — Videos
“You can fool all the people some of the time, and
some of the people all the time,
but you cannot fool all the people all the time.”
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How Many Illegal Aliens Are in the US? – Walsh – 1
How Many Illegal Aliens Are in the United States? Presentation by James H. Walsh, Associate General Counsel of the former INS – part 1.
Census Bureau estimates of the number of illegals in the U.S. are suspect and may represent significant undercounts. The studies presented by these authors show that the numbers of illegal aliens in the U.S. could range from 20 to 38 million.
On October 3, 2007, a press conference and panel discussion was hosted by Californians for Population Stabilization (http://www.CAPSweb.org) and The Social Contract (http://www.TheSocialContract.com) to discuss alternative methodologies for estimating the true numbers of illegal aliens residing in the United States.
This is a presentation of five panelists presenting at the National Press Club, Washington, D.C. on October 3, 2007. The presentations are broken into a series of video segments:
Wayne Lutton, Introduction: http://www.youtube.com/watch?v=q5KHQR…
Diana Hull, part 1: http://www.youtube.com/watch?v=f6WvFW…
Diana Hull, part 2: http://www.youtube.com/watch?v=QYuRNY…
James H Walsh, part 1: http://www.youtube.com/watch?v=MB0RkV…
James H. Walsh, part 2: http://www.youtube.com/watch?v=lbmdun…
Phil Romero: http://www.youtube.com/watch?v=A_ohvJ…
Fred Elbel: http://www.youtube.com/watch?v=QNTJGf…
How Many Illegal Aliens Are in the US? – Walsh – 2