Story 1: Bluff, Bombast, Bust, Bang, Boom–World War III With North Korea and Communist China? — Videos–
North Korea looking for a fight with US?
North Korea Threatens to Sink U.S. Aircraft Carrier
News Wrap: Trump calls North Korea situation ‘unacceptable’ – North Korea Fan
U.S BOMBERS ON HIGH ALERT After North Korea Threatens to Sink Approaching US Carrier
China warns North Korea could ‘cross the point of no return’ with sixth nuke test
North Korea reveals WHERE nuclear war with ‘fanatic’ US will break out
RARE! Entire US Senate to Go to White House for North Korea Briefing
U.S. aircraft carrier nears South Korea
Aircraft Carrier USS Carl Vinson CVN 70, Submarine USS Michigan, Target North Korea
Story 2: Operation Gotham Shield 2017 — Simulation of Nuclear and EMP Attack Over New York City — Videos
April 24-26 2017 — Operation Gotham Shield 2017
4/24/17 Why Operation Gotham Shield Needs Your Attention – Alex Jones Infowars
Why Operation Gotham Shield Needs Your Attention
Operation Gotham Shield | NYC & NJ on April 24th – 26th
What is an EMP? The 60 second answer
What’s an electromagnetic pulse attack?
Prepping For An EMP
JEANINE PIRRO: “Lights Out: The Danger to US Power Grid” – The EMP Threat
Are You Prepared For An EMP Attack?
Washington D.C. To Hold Massive “Coordinated Terror Attack” Drill This Wednesday
by Tyler Durden
Apr 25, 2017 5:17 AM
April 26th is shaping up to be a busy day.
As we reported on Friday, that’s when Operation Gotham Shield, an exercise involving FEMA, Homeland Security and a myriad of law enforcement and military agencies and which simulates a nuclear bomb blast over Manhattan, is set to conclude.
Then, as we learned earlier, April 26 is also when the entire Senate will be briefed by Donald Trump and his four top defense and military officials on the situation in North Korea at the White House, an event which Reuters dubbed as “unusual.”
April 26 is also when the USS Carl Vinson is expected to finally arrive off the coast of the Korean Penninsula.
Now, in a statement from the Metropolitan Washington Council of Governments, the regional association reports that “law enforcement officials and other first responders will participate in a full-scale exercise on April 26 designed to prepare for the possibility of a complex coordinated terror attack in the National Capital Region.”
The statement adds that emergency managers who work together at the Metropolitan Washington Council of Governments (COG) planned the exercise to help protect residents by preparing for an attack involving multiple target locations and teams of perpetrators.
The exercise will be conducted across a widespread geographical area. According to the release, the regional exercise will be staged at six sites in the District of Columbia, suburban Maryland and Northern Virginia, and will involve hundreds of police, fire, and emergency medical service personnel and volunteer actors.
The locations include neighborhoods in the northeast and southeast quadrants of the District of Columbia, Prince George’s County, and Arlington and Fairfax Counties. Residents in those neighborhoods will be notified ahead of time to expect the exercise.
According to Scott Boggs, Managing Director of Homeland Security and Public Safety at COG, “Law enforcement officials practice and exercise their skills on their own regularly because that’s the best way to ensure we are always ready to respond quickly and professionally. On April 26, we’ll go one step further and stage a very realistic emergency event involving multiple sites and actors posing as the casualties. However, there is no reason for residents to be alarmed because the exercise will occur in a controlled environment.”
The is scheduled to take place near or at George Mason University, and last from 8;30am until 4:30pm.
The statement also advises that the only media availability will be in a one hour block before the exercise, from 7:30am – 8:30am on April 26.
Operation Gotham Shield: Is there a connection between massive power outages and the nuclear EMP drill?
Posted onApril 22, 2017byState of the Nation
Are Today’s Massive Power Outages Really Secretly Part of the Operation Gotham Shield Nuclear EMP Drill?
When Russia holds a massive civil defense drill for nuclear war, the government informs its people and even includes them.When the US government does it however, they do it in secret, even using natural disasters as cover, meanwhile keeping the civilian population in the dark and telling them as little as possible.
The fact that there are massive power outages today of all days in San Francisco, LA and specifically New York City — causes reportedly still unknown at this time — seems like anything but a coincidence with everything else going on right now including a massive NYC-area 10 kiloton nuclear blast and EMP drill called Operation Gotham Shield.
The first massive power outage today occurred in New York City just before 6 am after the power inexplicably went down at the 7th avenue and 53rd street subway station, causing a chain reaction through the rest of NYC’s subway system. MTA did not get the generators back up and running until around 11:30. Delays are still rampant.
A few hours later, outages began being reported around Los Angeles, including at the LA airport.
This one is reportedly the worst. Some 90,000 people are still without power all around downtown San Francisco as of 1 pm this afternoon. Businesses are shuttered, transportation systems are shut down, whole skyscrapers are dark. People are calling the whole scene “surreal”. Again, the cause of the outage still has not been explained.
Operation Gotham Shield
All of this is coinciding with the Operation Gotham Shield drill being held in the NYC area; depending on who you ask, it’s even going on right now, but again, we civilians (read: peons) are being mostly kept in the dark about the huge drill. One set of dates says the drill started on April 18th and will run through May 5th. Another set of dates say the actual nuke/EMP simulation part of the drill won’t happen until April 24th–26th.
[Gotham Shield] is a tabletop, joint agency exercise involving FEMA, Homeland Security and a myriad of law enforcement and military agencies. WMD, chemical and biological units will all be on hand as a response is tested for a “simulated” nuclear detonation over the United States’ foremost urban center, in the iconic and densely populated island of Manhattan and nearby shores of New Jersey.
On April 18th thru May 5th, 2017, state, local, and federal organizations alike are planning for Operation Gotham Shield 2017 — a major nuclear detonation drill in the New York-New Jersey area, along with the U.S.-Canadian border. During this exercise, 4 nuclear devices, 2 of which are rendered “safe” during the U.S. Department of Defense (DOD) Vital Archer Exercise, and one successful 10kt detonation in the NYC/NJ area, along with one smaller detonation on the U.S./Canadian border are to take place.
Among the organizations involved are:
– U.S. Department of Energy (DOE)
– U.S. Department of Defense (DOD)
– U.S. Domestic Nuclear Detection Office (DNDO)
– U.S. Federal Bureau of Investigation (FBI)
– U.S. Federal Emergency Management Agency (FEMA)
– U.S. Northern Command (NORTHCOM)
– State of New Jersey Office of Emergency Management
– State of New York Office of Emergency Management
– City of New York Office of Emergency Management
And many more…
So the chances that we’re suddenly having totally random “unexplained” massive power outages in major cities, starting specifically in the one where this massive nuclear war/EMP drill is currently going down and it is all simply a coincidence seem poor at best.
The potential for a more explosive false flag to spin out of control, by hijacking and ‘converting’ the simulated actions, is all too real.
This is closely related to the mechanism that many researchers believe was at work on the day of 9/11, nesting a false flag attack inside of a series of large-scale training operations which invoked emergency powers and simulated attacks in locations that were actually hit.
President Trump reportedly backed off his demand that Congress include a down payment for a wall spanning the entire U.S.-Mexico border in a crucial spending bill that must pass by Friday night to keep the government funded.
Republican lawmakers have urged the president to focus on border security in general instead of the wall, which Democrats have called a poison pill that would cause them to reject the bill and shut down the government.
Trump told a group of conservative reporters he invited to the White House on Monday that he was open to getting funding for the wall in September when Congress debates the 2018 budget, the Associated Press reported. This is a sharp reversal from his position over the weekend and early Monday, when he doubled down on his demand for the wall. Trump tweeted repeatedly that the wall is necessary to stop the flow of drugs into the United States.
“If the wall is not built, which it will be, the drug situation will NEVER be fixed the way it should be!” Trump exclaimed Monday, adding: “#BuildTheWall.”
On Tuesday morning, the president claimed he had not changed his position on the wall as the “fake media” was claiming, but he didn’t specify whether he still believed he would get the funds in this week’s spending bill, which increasingly looks like a political impossibility.
The president may have realized that with Democrats ready to shut down the government over the wall and many lawmakers in his own party skeptical of it, there was little chance of reaching a deal on his signature campaign promise before the Friday night deadline. Some critics noted that Trump had long promised that Mexico — and not the U.S. — would pay for the wall’s construction.
Minority Leader Chuck Schumer, D-N.Y., praised Trump in a statement for taking the wall “off the table.” He had earlier called the demand a “monkey wrench” the president had thrown into sensitive negotiations between the parties over a series of spending bills to keep the government funded for the next five months.
But it’s possible the president will find a way to declare victory even if his call for a wall goes unanswered by Congress. Several Republican senators urged the president to think of the “big, beautiful wall” he promised on the campaign trail as symbolic of border security in general. That way, the president could declare any increase in border spending in the spending bill a victory, right as his presidency passes the symbolic 100-day mark on Friday.
“Border walls and fences are part of an overall plan, but there will never be a 2,200-mile wall built. Period,” Sen. Lindsey Graham, R-S.C., told reporters Monday evening. “I think [the wall] has become symbolic for better border security. So it’s a code word for better border security.”
Graham said the president would still be in “good shape” if he gets funding for border security in the spending bill that’s not specifically for a wall.
Congress readies for border wall fight neither party seems to want
Sen. Thom Tillis, R-N.C., also pushed for interpreting “border wall” as border security in general. “I know it’s being generally referred to as a border wall, but I think it’s the efforts to make sure that Border Patrol can have adequate funding for the people, technology and infrastructure they think they need to secure [the border],” Tillis said. “I think we can be less prescriptive about exactly what the structure looks like and more focused on the fact that we need to secure the border.”
Both House Minority Leader Nancy Pelosi, D-Calif., and Schumer have signaled openness to funding border security in the spending bill as long as it doesn’t go to construction of a wall or the “deportation force” Trump mentioned during the campaign. The Democrats could theoretically agree to funds for more surveillance technology on the border, or to hire and train more border patrol agents. But it’s harder to imagine them supporting an increase in Immigration and Customs Enforcement (ICE) agents, since they enforce immigration laws internally in the United States and not at the borders.
Meanwhile, one of the president’s staunchest defenders in Congress defended the delay of the president’s campaign promise, urging Americans to be patient.
“He said we would build a wall and Mexico would pay for it, … but he never said when,” Rep. Louie Gohmert, R-Texas, said Monday night on Fox Business. “Some things just take time and don’t occur real quick. I think that’s the way with the wall.”
Story 1: The Elites vs. The People Not Nationalism vs. Internationalism — Videos —
French election explained: Emmanuel Macron and Marine Le Pen go head to head
Nigel Farage on French election: Don’t write off Le Pen
[Video] Rush Limbaugh: French Election Mirrors U.S. 2016 Vote
As anti-establishment candidates advance, France’s political establishment unites against Le Pen
French election: What would Emmanuel Macron’s presidency mean for Britain? – BBC Newsnight
Published on Apr 24, 2017
Centrist Emmanuel Macron will face far-right leader Marine Le Pen in the second round of the French presidential election.To learn more about the presidential candidate, Evan Davis has met up with Benjamin Griveaux, Mr Macron’s campaign spokesman.
PODCAST: The French Election Results and Their Impact
Why the French Election Is Critical and What We Learn from Emmanuel Macron’s Movement Versus Party
Angelo Codevilla – Does America Have a Ruling Class?
The Revolution of America’s Regime
456. The Iron Fist of the Ruling Class | Angelo Codevilla
George Carlin – It’s a Big Club and You Ain’t In It! The American Dream
Official first round result
With 107 of 107 departements counted | At 17:58 CEST
Marine Le Pen and Emmanuel Macron Advance
For the first time in modern French history, neither candidate is from a major party.
Emmanuel Macron casts his ballot in the first round of French presidential election at a polling station in Le Touquet, France on April 23, 2017.Eric Feferberg / ReutersYASMEEN SERHANAPR 23, 2017
Macron and Le Pen’s strong showings Sunday, which saw an approximately 77 percent voter turnout (slightly lower than the 79 percent who voted in the first round in 2012), signaled a rebuke of the political establishment that has dominated French politics for decades. Macron launched his centrist party in August 2016 after he quit his role in President François Hollande’s Socialist government, and despite the party’s youth it boasts a quarter of a million members. Meanwhile, Le Pen’s FN secured the most votes it has ever received in its nearly half-century history, surpassing the 18-percent first-round finish it saw in 2012. Even Jean-Luc Mélenchon, the far-left candidate who ran under a movement called La France Insoumise, or “Unsubmissive France,” had his strongest performance to date. Though his last-minute surge in the polls wasn’t enough to propel him to the second round, he still managed to claim 19.5 percent of the vote, far surpassing the 11 percent he won during his first presidential bid in 2012.Republican candidate François Fillon also earned 19.5 percent of the vote, tying Mélenchon for third place. The center-right candidate and former prime minister enjoyed a comfortable lead early on in his campaign, but support wavered in January after his candidacy was embroiled by allegations he misused public funds to pay his wife, Penelope, and two of their children for parliamentary work they are alleged not to have performed. Fillon denied any wrongdoing, although the launch of a formal investigation into both him and his wife prompted several of his Republican allies to quit his campaign.Socialist candidate Benoît Hamon, who came in last of the main contenders with 6.2 percent of the vote, also suffered from fissures within his own party. Despite clinching a decisive victory during the January primary, Hamon failed to command the support of Socialist party leaders, many of whom, including former Prime Minister Manuel Valls, endorsed Macron instead. This, paired with the deeply unpopular presidency of Hollande and the competition of similarly far-left Mélenchon, made the ruling party’s poor showing all but certain. The results prompted the losing candidates to urge their supporters to back Macron. Hamon said there was a distinction between a political adversary and an “enemy of the Republic,” referring to Le Pen. Fillon warned that Le Pen would lead France to “ruin.”
The advancement of two non-traditional candidates will certainly have an impact on their ability to govern once they make it to the Élysée Palace. In the month following the presidential contest, French voters will return to the polls to elect members of the National Assembly, France’s lower but more powerful house of parliament. This election is particularly important because whoever becomes prime minister almost always comes from the party that controls the chamber and, at present, neither Le Pen’s FN (which claims two of the National Assembly’s 577 seats) or Macron’s En Marche (which claims none) are expected to command a majority. This makes cohabitation, in which the president must share power with the prime minister of a different party, almost certain. Though this power-sharing arrangement is not unprecedented in French political history, as Politico’s Pierre Briançon notes, it has never been a favorable one.
It reduces the head of state to a figurehead, akin to northern European monarchs or ceremonial presidents such as those of Germany or Italy. In those times, the prime minister holds most of the executive powers, save for those governing foreign policy and defense, which the constitution puts specifically in the president’s domain. …It has happened three times in postwar history — first from 1986 to 1988, when Socialist President François Mitterrand had to live with Jacques Chirac as prime minister. From 1993 to 1995, Mitterrand had to deal with another conservative premier, Édouard Balladur. And finally, from 1997 to 2002, President Chirac had to contend with Socialist Prime Minister Lionel Jospin.
Macron and Le Pen now have two weeks ahead of the runoff to court the voters who backed their former competitors, as well as the estimated one-third of French voters who are still undecided. From the recent terrorist attack in Paris to the country’s 10 percent unemployment rate, issues such as security and the economy will likely remain at the forefront of the contest.
Outsiders Emmanuel Macron and Marine Le Pen sweep to victory as France kicks out old guard: Europhile newcomer narrowly wins first vote to take on far-Right’s Madame Frexit for the presidency
Far-right leader Marine Le Pen and independent centrist Emmanuel Macron have made it to the second round
36.7million voted, a turnout of 78.2 per cent; Macron won 23.9 per cent of the vote, Le Pen 21.4
Republican candidate Francois Fillon conceded after initial results showed he achieved 19.5 per cent of vote
Far-left leader Jean-Luc Melenchon refused to concede until final results of first-round vote announced
France’s Prime Minister, Bernard Cazeneuve, has called on voters to support Macron instead of Le Pen
This is the first time in 60 years none of France’s mainstream parties have entered the second round
Riots broke out in Nantes and Paris’ Place de la Bastille – the birthplace of the French Revolution
By Emily Kent Smith In Paris For The Daily Mail and Isobel Frodsham and Nick Fagge In Paris and Gareth Davies and Peter Allen In Paris for MailOnline
PUBLISHED: 06:50 EDT, 23 April 2017 | UPDATED: 02:43 EDT, 24 April 2017
French voters turned their backs on the political establishment last night in round one of the presidential election.
Emmanuel Macron – an independent centrist – won first place ahead of National Front leader Marine Le Pen.
The result will have major implications for Britain and its departure from the EU.
Miss Le Pen wants to completely renegotiate France’s relationship with Brussels while Mr Macron wants closer links.
Scroll down for video
Marine Le Pen (left) and Emmanuel Macron (right) celebrated the initial results of the polls, which said they both made it to the second round of the election
Le Pen went to greet her supporters after the initial results and said: ”This is a historic result. The French must take the step for this historic opportunity. This is the first step to drive the French [people] into the Elysee Palace’
Supporters of Le Pen, leader of the French National Front, were seen waving their flags emblazoned with ‘Marine Presidente’ at her election headquarters in Henin-Beaumont, after the inital results were announced
Supporters of French centrist candidate Macron were also seen cheering in delight at the results and waving the French flag
Many people were seen hugging after initial results showed Macron winning 23.9 percent of the vote, beating France’s two main parties
According to France’s Interior Ministry, 46 million people voted in the first stage of the elections which knocked the traditional Right and Left parties out of the running for the first time in 60 years.
With 97 per cent of the vote counted, Macron achieved 23.9 per cent, followed by Le Pen on 21.4. A total of 36.7million voted, a turnout of 78.2 per cent.
But it is thought that Le Pen’s chances of winning the second round are limited as supporters for Republican candidate Francois Fillon, who conceded but has gained 19.9 per cent of the votes, will support Macron.
However, far-left leader Jean-Luc Melenchon, who gained 19.6 per cent, refused to concede until the final results of first-round vote were announced.
Macron took to the stage in Paris earlier, with his wife Brigitte, and urged national unity against Le Pen.
To chants of ‘Macron president!’ and ‘We’re going to win,’ Macron began his speech by paying tribute to his opponents, and praised his supporters for his lightning rise.
He said: ‘We have turned a page in French political history,’ and added he wants to gather ‘the largest possible’ support before May 7.
Macron acknowledged widespread anger at traditional parties and promised ‘new transformations’ in French politics.
At a rally last night, Le Pen told her supporters she is offering ‘the great alternative’ in the presidential race.
Crowds celebrate as Macron & Le Pen expected go through to next round
She added: ‘It is time to liberate the French people from the arrogant [political] elite.’ Le Pen was later given a bunch of flowers
Le Pen addresses supporters as she goes through to second round
She said: ‘This is a historic result. The French must take the step for this historic opportunity. This is the first step to drive the French [people] into the Elysee Palace.
‘It is time to liberate the French people from the arrogant [political] elite.’
Former favourite Fillon conceded and voiced his support for Macron after initial projections showed he and Melanchon got 19.5 per cent of the vote.
Shortly afterwards, France’s Prime Minister, Bernard Cazeneuve, also called on voters to support Macron.
The outcome capped an extraordinary few months for a deeply divided France, which saw a campaign full of twists and turns and widespread anger at traditional parties.
It signals a stinging defeat for the Fillon and Socialist Benoit Hamon, meaning neither of France’s mainstream parties will be in the second round for the first time in 60 years.
Macron, a 39-year-old who had never before stood for election and only started his independent centrist movement 12 months ago, will be the overwhelming favourite to win the second round on May 7.
He served as an economy minister under President Francois Hollande, ran without the backing of an established party, forming his own called ‘En Marche!’.
His wife Brigitte is 25 years his senior and taught him at school.
Macron, a 39-year-old who had never before stood for election and only started his independent centrist movement, En Marche!, 12 months ago
Macron thanks supporters for campaign that changed French politics
He said he wants to gather ‘the largest possible’ support before the May 7 runoff. He praised his supporters for a campaign that ‘changed the course of our country’
Macron acknowledged widespread anger at traditional parties and promised ‘new transformations’ in French politics
European Commission President Jean-Claude Juncker congratulated Macron on Sunday and wished the centrist well for the May 7 French presidential runoff against Le Pen.
‘Juncker congratulated Macron on his result in the first round and wished him all the best for the next round,’ Margaritis Schinas said on Twitter.
Underlining broad support for Macron among leaders of the European Union institutions in Brussels, EU foreign policy chief Federica Mogherini from the Italian centre-left added her congratulations to those of Juncker, a centre-right former prime minister of Luxembourg.
‘To see the flags of France and the EU hailing Emmanuel Macron’s result shows hope and the future of our generation,’ tweeted Mogherini, 43, after the 39-year-old Macron’s first-round victory speech to supporters was broadcast on television.
Last night he was congratulated by former Labour MP David Miliband and by former chancellor George Osborne.
Mr Miliband said: ‘Tremendous achievement by Emmanuel Macron. Bulwark against evil forces and tribune for modernization in France and Europe.’
Mr Osborne said: ‘Congratulations to my friend Emmanuel Macron. Proof you can win from the centre. At last the chance for the leadership that France needs.’
Fillon urges supporters to vote for Macron as he concedes
Despite his defeat, supporters for the election candidate far-left leader Jean-Luc Melenchon still cheered for him outside his election headquarters
Anti-fascist activists clashed with riot police in Paris’ Place de la Bastille – the birthplace of the French Revolution
Demonstrators in Nantes chanted anti-Le Pen slogans as they showed their opposition to the National Front leader
The euro has jumped 2 per cent on Sunday night, to more than 85p ($1.09), after projections showed Macron and Le Pen would go head to head.
Macron has vowed to reinforce France’s commitment to the EU and euro.
Stock markets will next open in Asia before Europe starts trading on Monday morning.
But despite stock markets around the world improving significantly, investors fretted beforehand that another unforseen election outcome could upend the market. In addition, the presidential race was plagued by controversy.
Republican candidate Fillon, 63, is accused of embezzling state money by paying his British wife Penelope, 61, as his assistant – despite her allegedly carrying out no work.
Le Pen faces a fraud inquiry, with her chief of staff accused of misusing EU funds while Melenchon, 65, had vowed to pull his country out of Europe and get rid of the euro.
Earlier this evening, Le Pen had security authorities on high alert, with rioting expected across the country in protest due to her election success.
More than 50,000 police and gendarmes were deployed to the 66,000 polling stations for Sunday’s election, which comes after Thursday’s deadly attack on the Champs-Elysees in which a police officer and a gunman were slain.
However, initial election results triggered riots across the country, initially sparked in Paris’ Place du la Bastille, the birthplace of the French Revolution, tonight against the Le Pen’s National Front.
The crowds of young people, some from anarchist and anti-fascist groups, gathered in eastern Paris as results were coming in from Sunday’s first-round vote.
Police fired tear gas to disperse an increasingly rowdy crowd. Riot police surrounded the area.
Protesters have greeted several of Le Pen’s campaign events, angry at her anti-immigration policies and her party, which she has sought to detoxify after a past tainted by racism and anti-Semitism.
There were angry scenes in Nantes in western France, where anti-fascists took to the streets to protest
Ballot boxes in Le Port, on the French overseas island of La Reunion were seen locked after the polls closed earlier this evening
Two officials were seen tipping out the votes ready to count them ahead of the results, which are expected to be announced within the hour
Le Pen has vowed to offer French voters a referendum to leave the EU and wants to leave the euro, known as Frexit.
Her father, the convicted racist and anti-Semite Jean-Marie Le Pen, won through to the second round of the 2002 presidential election but was then crushed by the conservative Jacques Chirac.
However she faces a similar prospect of defeat when she goes up against Macron in the second round of the next week.
He is widely expected to win the contest against Le Pen.
In France the election took place with the nation on high alert, with the vote taking place just three days after a police officer was gunned down by a Jihadi on the Champs-Elysees in Paris.
In Besancon, eastern France a stolen car was abandoned outside a polling station with the engine running.
A policeman secures the entrance of a polling station as people arrive to vote in the first round of 2017 French presidential election in Henin-Beaumont, France, April 23, 2017
Policemen stand near a polling station during the first round of 2017 French presidential election in Paris, France
Femen activists with masks, including one wearing a mask of Marine Le Pen, top left, are detained as they demonstrate in Henin-Beaumont, northern France, where far-right leader and presidential candidate Le Pen voted during the first round of the French presidential election
Police found a hunting rifle inside the vehicle which had been disguised with stolen number plates.
In Rouen, Normandy, a gunman shot and wounded another man but the incident was classified as ‘non-terror related’.
Two other polling station, in Saint Omer, northern France, were evacuated because of a suspicious vehicle with Dutch number plates.
Ballots were cast in the wake of took place after a series of devastating terror attacks across France, but despite that armed police and soldiers are outlawed from protecting 67,000 French polling stations.
There had been a serious concern that groups including Islamic State would target the election.
However the 50,000 policemen and gendarmes that were only standby along with 7,000 soldiers were not required as the day went on.
The presidential poll is the first to be held during a state of emergency, put in place since the Paris attacks of November 2015.
A Femen activists wearing the mask of Marine le Pen is detained as they demonstrate in Henin Beaumont, northern France
TOPLESS demonstrators protests outside French polling station
Voters are choosing between 11 candidates in the most unpredictable contest in decades, and the poll conducted by RTBF suggests just that.
Topless demonstrators from the Femen activist group caused a commotion as they staged a stunt against Le Pen outside a polling station where the far-right presidential candidate was heading to vote.
Around six activists were detained Sunday morning after jumping out of an SUV limo wearing masks of Le Pen and United States President Donald Trump.
Police and security forces quickly forced them into police vans, confiscating their signs.
Le Pen voted at the station shortly after without further disruption.
After nine hours of voting, turnout was 69.4 percent, one of the highest levels in 40 years.
While down slightly on the same point in the 2012 election, an extra hour of voting in smaller towns was expected to take turnout to around 78 to 81 percent.
A Femen activist wearing the mask of U.S President Donald Trump is taken away from the scene near a scrum of photographers
People line up before casting their vote for the first-round presidential election at a polling station in Paris, Sunday, April 23, 2017
Outgoing French president Francois Hollande casts his ballot at a polling station in Tulle (left) as Marine Le Pen emerges from a booth (right)
Outgoing French president Francois Hollande picks up ballot papers before casting his vote at a polling station in Tulle, central France, on April 23, 2017, during the first round of the Presidential election
Former French President and former Head of Les Republicains right wing Party Nicolas Sarkozy (centre) and his wife, the singer Carla Bruni Sarkozy (left) vote in the first round of the 2017 French Presidential Election at the Jean de la Fontaine High School in the 16th arrondissement on April 23, 2017 in Paris, France
Former French President and former Head of Les Republicains right wing Party Nicolas Sarkozy sweeps the curtain aside as he leaves a voting booth
Marine Le Pen was today poised for a historic breakthrough in France’s nail-biting presidential race
Her campaign has been dominated by anti-Islam and anti-immigration rhetoric and critics said she has used the violence to stoke further hostility.
Defiant voters proclaimed the Paris terrorist attack would not alter their political loyalties in the French presidential elections today, although many feared a surge in support for the National Front.
As citizens flocked to polling stations across the country Parisians told how they would ‘vote with their hearts’ to reject extremist ideas, in the first round of voting to decide the new leader of France.
Mother-of-one Marie-Noelle Liesse told MailOnline she voted for independent centrist Emmanuel Macron to stop Marine Le Pen.
She said: ‘I voted with my heart to stop the extremists, the National Front, from getting into power.
‘The terrorist attack on the Champs Elysee has not affected the way I voted, but I fear it may have influenced some people.
‘I voted for Macron. I believe he is the right candidate to lead France.’
Mrs Liesse, 45, a communications executive, brought her five-year-old son Amant, to the polling station in the central Marais district of Paris.
Marine Le Pen casts her vote in the French presidential elections
French presidential election candidate for the far-right Front National (FN) party, Marine Le Pen casts her ballot in the first round of the French presidential elections in Henin-Beaumont, Northern France, shortly after the commotion
Centrist candidate Emmanuel Macron waves supporters after casting his vote in the first round of the French presidential election, in le Touquet, northern France, Sunday April 23, 2017
People line up before casting their vote for the first-round presidential election at a polling station in Paris, Sunday, April 23, 2017
Young professional couple Max Nivoix and Mariam Guedra voted for independent centrist Emmanuel Macron for said they feared the terrorist attack would galvanise support for Marine Le Pen’s National Front.
Mr Nivoix, 28, an industrial products buyer, told MailOnline: ‘I have voted for Macron. I think he is the best candidate to lead France.
‘The terrorist attack last week has not influenced the way I voted. But I fear that people outside of Paris will turn to Le Pen because of it.’
French nationals in the UK casting their votes
Among the 60,000 polling stations to open their doors was the French Consulate in South Kensington, where the bulk of the UK’s French nationals are expected to cast their votes.
According to figures from 2014, there are 400,000 French people living in London, which prompted Boris Johnson to call it France’s sixth biggest city.
At the end of 2013, the Foreign Ministry recorded 1.6million French expats living in the UK, according to The Independent.
Outside of the capital, there are polling stations in Ashford, Brighton, Belfast, Birmingham, Bristol, Leeds, Manchester, Aberdeen, Edinburgh and Glasgow.
His partner Ms Guedra, 28, an engineer, added: ‘I voted for Emmanuel Macron too. He has the best policies for young people and for the time we live in now.
‘But we are both educated and from the city. I know that old people and people in the countryside are more in favour of Le Pen.’
Flight attendant Baptiste Laurent said he voted for communist-backed firebrand Jean-Luc Melonchon he feared National Front candidate Marine Le Pen could come top in the poll.
Mr Laurent, 39, told MailOnline: ‘I voted for Melonchon because I voted for what I believe in – a more equal society.
‘But I fear that Le Pen could be the biggest winner today.’
Mr Laurent came to the polling station with his 14-month-old daughter Romy.
A primary school teacher also backed communist-backed firebrand Jean-Luc Melonchon but feared a surge of support for Le Pen’s National Front.
Alexandre, 42, told MailOnline: ‘I voted for Melonchon because I support his programme and his socialist policies.
‘But Le Pen will do well in the polls today. She has a strong base of support. And after the terrorist attack she will get more votes. I think she will get through to the second round of voting.’
The second round of voting between the two front runners of today’s poll will take place on Sunday 7 May.
She is locked in a duel with centrist front-runner Emmanuel Macron, 39, a staunch defender of the single market who has told Theresa May he favours a ‘hard Brexit’.
If, as expected, Le Pen and Macron are successful in the first round of voting today, they will face each other in the run-off on May 7.
People line up to vote at a polling station in the first round of 2017 French presidential election in Vaulx-en-Velin, France, April 23, 2017
Brigitte Trogneux casts her ballot next to her husband, French presidential election candidate for the En Marche movement Emmanuel Macron during the first round of the Presidential election at a polling station in Le Touquet
But analysts say the battle for the Élysée Palace is by no means a two-horse race.
Le Pen has moved from 22 per cent to 23 per cent in the latest opinion poll while her three rivals have all lost half a percentage point of support.
Macron dropped back to 24.5 per cent, while republican candidate François Fillon and leftist candidate Jean-Luc Mélenchon were back on 19 per cent.
The far-Right leader is confident her chances of winning the election’s first round have been strengthened by last week’s terrorist murder of a police officer on the Champs-Élysées
Experts said a Le Pen victory in the first round could mean cheaper holidays for Brits heading to Europe.
Kathleen Brooks, of City Index Direct, said: ‘I think if Le Pen wins today by a wide enough margin, then the euro will fall significantly, possibly to the lowest levels we’ve seen this year. And a weak euro will initially be great for us as everything will be much cheaper in Europe.’
Le Pen’s father, the convicted racist Jean-Marie Le Pen, caused shockwaves around the world in 2002 when he came second in the first round. He then went on to lose to Jacques Chirac by a landslide of more than 80 per cent.
But Marine Le Pen is convinced she can go one better by positioning herself as the candidate who is toughest on terror.
She had pledged to ‘immediately reinstate border checks’, to expel foreigners and to ban all immigration, whether illegal or not. Supporters include Donald Trump who said the Paris attack would ‘have a big effect on the presidential election’ because the French people ‘will not take much more of this’.
But Prime Minister Cazeneuve accused Le Pen of ‘shamelessly seeking to exploit fear and emotion for exclusively political ends’. Mr Cazeneuve pointed out that Karim Cheurfi, the 39-year-old responsible for the murder of traffic officer Xavier Jugelé, 37, was a born and bred Frenchman.
Le Pen has called for negotiation with Brussels on a new EU, followed by a referendum; extremist mosques closed and priority to French nationals in social housing; and retirement age fixed at 60.
Macron forged a reputation with his ‘Macron Law’, a controversial reform bill that allowed shops to open more often on Sundays. On security, he has said France is paying for the intelligence jobs cuts made when Fillon was PM between 2007 and 2012.
For the French establishment, Sunday’s presidential election came close to a near-death experience. As the Duke of Wellington said of Waterloo, it was a “damn near-run thing.”
Neither candidate of the two major parties that have ruled France since Charles De Gaulle even made it into the runoff, an astonishing repudiation of France’s national elite.
Marine Le Pen of the National Front ran second with 21.5 percent of the vote. Emmanuel Macron of the new party En Marche! won 23.8 percent.
Macron is a heavy favorite on May 7. The Republicans’ Francois Fillon, who got 20 percent, and the Socialists’ Benoit Hamon, who got less than 7 percent, both have urged their supporters to save France by backing Macron.
Ominously for U.S. ties, 61 percent of French voters chose Le Pen, Fillon or radical Socialist Jean-Luc Melenchon. All favor looser ties to America and repairing relations with Vladimir Putin’s Russia.
Le Pen has a mountain to climb to win, but she is clearly the favorite of the president of Russia, and perhaps of the president of the United States. Last week, Donald Trump volunteered:
“She’s the strongest on borders, and she’s the strongest on what’s been going on in France. … Whoever is the toughest on radical Islamic terrorism, and whoever is the toughest at the borders, will do well in the election.”
As an indicator of historic trends in France, Le Pen seems likely to win twice the 18 percent her father, Jean-Marie Le Pen, won in 2002, when he lost in the runoff to Jacques Chirac.
The campaign between now and May 7, however, could make the Trump-Clinton race look like an altarpiece of democratic decorum.
Not only are the differences between the candidates stark, Le Pen has every incentive to attack to solidify her base and lay down a predicate for the future failure of a Macron government.
And Macron is vulnerable. He won because he is fresh, young, 39, and appealed to French youth as the anti-Le Pen. A personification of Robert Redford in “The Candidate.”
But he has no established party behind him to take over the government, and he is an ex-Rothschild banker in a populist environment where bankers are as welcome as hedge-fund managers at a Bernie Sanders rally.
He is a pro-EU, open-borders transnationalist who welcomes new immigrants and suggests that acts of Islamist terrorism may be the price France must pay for a multi-ethnic and multicultural society.
Macron was for a year economic minister to President Francois Hollande who has presided over a 10 percent unemployment rate and a growth rate that is among the most anemic in the entire European Union.
He is offering corporate tax cuts and a reduction in the size of a government that consumes 56 percent of GDP, and presents himself as the “president of patriots to face the threat of nationalists.”
His campaign is as much “us vs. them” as Le Pen’s.
And elite enthusiasm for Macron seems less rooted in any anticipation of future greatness than in the desperate hope he can save the French establishment from the dreaded prospect of Marine.
But if Macron is the present, who owns the future?
Across Europe, as in France, center-left and center-right parties that have been on the scene since World War II appear to be emptying out like dying churches. The enthusiasm and energy seem to be in the new parties of left and right, of secessionism and nationalism.
The problem for those who believe the populist movements of Europe have passed their apogee, with losses in Holland, Austria and, soon, France, that the fever has broken, is that the causes of the discontent that spawned these parties are growing stronger.
What are those causes?
A growing desire by peoples everywhere to reclaim their national sovereignty and identity, and remain who they are. And the threats to ethnic and national identity are not receding, but growing.
The tide of refugees from the Middle East and Africa has not abated. Weekly, we read of hundreds drowning in sunken boats that tried to reach Europe. Thousands make it. But the assimilation of Third World peoples in Europe is not proceeding. It seems to have halted.
Second-generation Muslims who have lived all their lives in Europe are turning up among the suicide bombers and terrorists.
Fifteen years ago, al-Qaida seemed confined to Afghanistan. Now it is all over the Middle East, as is ISIS, and calls for Islamists in Europe to murder Europeans inundate social media.
As the numbers of native-born Europeans begin to fall, with their anemic fertility rates, will the aging Europeans become more magnanimous toward destitute newcomers who do not speak the national language or assimilate into the national culture, but consume its benefits?
If a referendum were held across Europe today, asking whether the mass migrations from the former colonies of Africa and the Middle East have on balance made Europe a happier and better place to live in in recent decades, what would that secret ballot reveal?
Like both legislative statutes and regulations promulgated by government agencies, executive orders are subject to judicial review and may be overturned if the orders lack support by statute or the Constitution. Major policy initiatives require approval by the legislative branch, but executive orders have significant influence over the internal affairs of government, deciding how and to what degree legislation will be enforced, dealing with emergencies, waging wars, and in general fine-tuning policy choices in the implementation of broad statutes.
Basis in the United States Constitution
The United States Constitution does have a provision that explicitly permits the use of executive orders. The term executive power in Article II, Section 1, Clause 1 of the Constitution is not entirely clear. The term is mentioned as direction to “take Care that the Laws be faithfully executed” and is part of Article II, Section 3, Clause 5. The consequence of failing to comply possibly being removal from office.
The U.S. Supreme Court has held that all executive orders from the President of the United States must be supported by the Constitution, whether from a clause granting specific power, or by Congress delegating such to the executive branch. Specifically, such orders must be rooted in Article II of the US Constitution or enacted by the congress in statutes. Attempts to block such orders have been successful at times when such orders exceeded the authority of the president or could be better handled through legislation.
Presidential directives are considered a form of executive order issued by the President of the United States with the advice and consent of a major agency or department found within the executive branch of government.Some types of Presidential directives are the following:
With the exception of William Henry Harrison, all presidents beginning with George Washington in 1789 have issued orders that in general terms can be described as executive orders. Initially they took no set form. Consequently, such orders varied as to form and substance.
The first executive order was issued by George Washington on June 8, 1789, addressed to the heads of the federal departments, instructing them “to impress me with a full, precise, and distinct general idea of the affairs of the United States” in their fields.
The most famous executive order was by President Abraham Lincoln when he issued the Emancipation Proclamation on January 1, 1863. Political scientist Brian R. Dirck states:
The Emancipation Proclamation was an executive order, itself a rather unusual thing in those days. Executive orders are simply presidential directives issued to agents of the executive department by its boss.
Until the early 1900s, executive orders went mostly unannounced and undocumented, seen only by the agencies to which they were directed. This changed when the Department of State instituted a numbering scheme in 1907, starting retroactively with United States Executive Order 1 issued on October 20, 1862, by President Abraham Lincoln. The documents that later came to be known as “executive orders” apparently gained their name from this order issued by Lincoln, which was captioned “Executive Order Establishing a Provisional Court in Louisiana”. This court functioned during the military occupation of Louisiana during the American Civil War, and Lincoln also used Executive Order 1 to appoint Charles A. Peabody as judge, and to designate the salaries of the court’s officers.
President Truman’s Executive Order 10340 in Youngstown Sheet & Tube Co. v. Sawyer, 343 US 579 (1952) placed all steel mills in the country under federal control. This was found invalid because it attempted to make law, rather than clarify or act to further a law put forth by the Congress or the Constitution. Presidents since this decision have generally been careful to cite which specific laws they are acting under when issuing new executive orders. Likewise, when presidents believe their authority for issuing an executive order stems from within the powers outlined in the Constitution, the order will simply proclaim “under the authority vested in me by the Constitution” instead.
Wars have been fought upon executive order, including the 1999 Kosovo War during Bill Clinton‘s second term in office. However, all such wars have had authorizing resolutions from Congress. The extent to which the president may exercise military power independently of Congress and the scope of the War Powers Resolution remain unresolved constitutional issues, although all presidents since its passage have complied with the terms of the resolution while maintaining that they are not constitutionally required to do so.
President Truman issued 907 executive orders, with 1,081 orders by Theodore Roosevelt, 1,203 orders by Calvin Coolidge, and 1,803 orders by Woodrow Wilson. Franklin D. Roosevelt has the distinction of making a record 3,522 executive orders.
Prior to 1932, uncontested executive orders had determined such issues as national mourning on the death of a president, and the lowering of flags to half-staff. President Franklin Roosevelt issued the first of his 3,522 executive orders on March 6, 1933, declaring a bank holiday, forbidding banks to release gold coin or bullion. Executive Order 6102 forbade the hoarding of gold coin, bullion and gold certificates. A further executive order required all newly mined domestic gold be delivered to the Treasury.
Executive orders are assigned numbers and published in the federal register, similar to laws passed by Congress, and typically direct members of the executive branch to follow a new policy or directive. Trump has issued 24 orders.
Presidential memoranda do not have to be published or numbered (though they can be), and usually delegate tasks that Congress has already assigned the president to members of the executive branch. Trump has issued 22 memoranda.
Finally, while some proclamations — like President Abraham Lincoln’s emancipation proclamation — have carried enormous weight, most are ceremonial observances of federal holidays or awareness months. Trump has issued 20 proclamations.
Scholars have typically used the number of executive orders per term to measure how much presidents have exercised their power. George Washington only signed eight his entire time in office, according to the American Presidency Project, while FDR penned over 3,700.
In his two terms, President Barack Obama issued 277 executive orders, a total number on par with his modern predecessors, but the lowest per year average in 120 years. Trump, so far, has signed 24 executive orders in 89 days.
Here’s a quick guide to the executive actions Trump has made so far, what they do, and how Americans have reacted to them:
Executive Order, April 18: ‘Buy American, Hire American’
President Donald Trump speaks at Snap-On Tools in Kenosha, Wisconsin on April 18, 2017.Associated Press/Kiichiro Sato
Presidential proclamation, April 14: National Park Week
White House press secretary Sean Spicer gave Interior Secretary Ryan Zinke the first quarter check of Trump’s salary to the National Park Service as Tyrone Brandyburg, Harpers Ferry National Historical Park Superindendant, looked on during the daily press briefing at the White House on April 3, 2017.Mark Wilson/Getty Images
Trump designated April 15-23, 2017 as National Park Week, during which all 417 sites (59 official “parks”) across the country are free to enter, a move many past presidents have made as well.
Presidential memorandum, April 12: Delegating terrorist report request
FBI Director James Comey testifies on Capitol Hill in Washington on Jan. 10, 2017, before the Senate Intelligence Committee hearing on Russian Intelligence Activities.AP Photo/Cliff Owen
The 2017 National Defense Authorization Act directs the president to review “known instances since 2011 in which a person has traveled or attempted to travel to a conflict zone in Iraq or Syria from the United States to join or provide material support or resources to a terrorist organization,” and submit a report to Congress.
Trump delegated this responsibility to FBI Director James Comey.
Presidential memorandum, April 11: Signing letter on including Montenegro in NATO
Montenegro’s PM Djukanovic attends a NATO foreign ministers meeting in Brussels.Thomson Reuters
At the end of March, the US Senate voted to include Montenegro’s in NATO, 97 to 2. While Trump called the alliance “obsolete” as recently as January, he said he no longer feels that way, and didn’t veto the small southern European country’s inclusion.
Presidential memorandum, April 8: Notifying Congress of the US Syria strike
In this image from video provided by the U.S. Navy, the guided-missile destroyer USS Porter (DDG 78) launches a tomahawk land attack missile in the Mediterranean Sea, Friday, April 7, 2017.Mass Communication Specialist 3rd Class Ford Williams/U.S. Navy via AP
“I acted in the vital national security and foreign policy interests of the United States, pursuant to my constitutional authority to conduct foreign relations and as Commander in Chief and Chief Executive,” Trump said in the memo. “I am providing this report as part of my efforts to keep the Congress fully informed, consistent with the War Powers Resolution.”
In the 2017 National Defense Authorization Act, Congress called on the president to outline his principles for reforming the draft. So in his order, Trump told Congress that the US military should recruit a diverse pool of citizens, and offer them training opportunities that will benefit the armed forces as well as their future employment, in order to “prepare to mitigate an unpredictable global security and national emergency environment.”
2 Executive Orders, March 31: Lowering the trade deficit and collecting import duties
Vice President Mike Pence tries to stop President Donald Trump as he leaves before signing executive orders regarding trade in the Oval Office on March 31, 2017.AP Photo/Andrew Harnik
Ahead of Trump’s first meeting with Chinese President Xi Jinping, he signed two orders focused on an issue he decried during the campaign: the US trade deficit.
The first order directs the executive branch to produce a country-by-country, product-by-product report on trade deficits in 90 days, in order to figure out how to reduce the $500 billion trade deficit the US had in 2016.
Business Insider’s Pedro Nicolaci da Costa wrote that the order’s plan for a “90-day ‘investigation’ into why the US had trade deficits with specific countries, [was] a quixotic exercise most economists say shows a deep lack of understanding of the workings of international trade.”
The second order seeks to strengthen the US response to its trade laws preventing counterfeit or illegal imports, citing “$2.3 billion in antidumping and countervailing duties” that the government hasn’t collected.
“On a typical day, CBP screens more than 74,000 truck, rail, and sea cargo containers at 328 U.S. ports of entry — with imported goods worth approximately $6.3 billion,” a Department of Homeland Security press release on the order wrote. “In Fiscal Year 2016, CBP seized more than 31,500 of counterfeit shipments and collected more $40 billion in duties, taxes, and fees, making CBP the U.S. government’s second largest source of revenue.”
Executive Orders, March 31 and February 9: Changing the DOJ order of succession
Attorney General Jeff Sessions speaks after being sworn-in in the Oval Office of the White House on February 9, 2017.REUTERS/Kevin Lamarque
On February 9, Trump signed an order establishing a line of succession to lead the US Department of Justice if the attorney general, deputy attorney general, or associate attorney general die, resign, or are otherwise unable to carry on their duties. In order, the US Attorney for the Eastern District of Virginia, the US Attorney for the Northern District of Illinois, and then the US Attorney for the Western District of Missouri will be next in line.
The action reverses an order Obama signed days before leaving office. After Trump fired acting Attorney General Sally Yates for refusing to enforce his first travel ban, he appointed Dana Boente, US attorney for the Eastern District of Virginia, as acting attorney general in her place. This order elevates his position in the order of succession.
On March 31, Trump signed another order reversing this order. The new order of succession after the AG, deputy AG, and associate AG are as follows: US Attorney for the Eastern District of Virginia, US Attorney for the Eastern District of North Carolina, and then the US Attorney for the Northern District of Texas.
Since Attorney General Jeff Sessions recused himself from the DOJ probe into Trump’s associates contacts with Russian operatives, the order of succession will determine who will oversee that investigation. Trump will have to fill the North Carolina post soon, the Palmer Report points out, possibly allowing the president to influence who leads the Russia investigation.
Read the full text of each proclamation in the links above.
Executive Order, March 29: Combating the opioid crisis
President Donald Trump shakes hands with New Jersey Gov. Chris Christie at a panel discussion on an opioid and drug abuse in the Roosevelt Room of the White House March 29, 2017 in Washington, DC.Shawn Thew-Pool/Getty Images
This order established the President’s Commission on Combating Drug Addiction and the Opioid Crisis. The commission, headed by New Jersey Gov. Chris Christie, is supposed to report to the president strategies to address the epidemic, which is now killing 30,000 Americans a year.
“These people don’t need another damn commission,” an anonymous former Obama administration official who worked on the issue told Politico. “We know what we need to do. … It’s not rocket science.” Business Insider’s Erin Brodwin outlined some strategies that scientists think will work.
Executive Order, March 28: Dismantling Obama’s climate change protections
President Donald Trump, accompanied by Environmental Protection Agency (EPA) Administrator Scott Pruitt, third from left, and Vice President Mike Pence, right, signs an Energy Independence Executive Order, Tuesday, March 28, 2017, at EPA headquarters in Washington with coal and oil executives.AP Photo/Pablo Martinez Monsivais
On the campaign trail, Trump vowed to bring back coal mining jobs and dismantle Obama’s environmental policy, declaring climate change a “hoax.” While coal jobs are unlikely to come back in droves, this executive order makes good on the second promise, directing federal agencies to rescind any existing regulations that “unduly burden the development of domestic energy resources.”
Executive Order, March 27: Revoking Obama’s fair pay and safe workplaces orders
President Barack Obama meets with then-President-elect Donald Trump in the Oval Office of the White House on November 10, 2016.REUTERS/Kevin Lamarque
In 2014, Obama signed an executive order requiring federal government contracts over $500,000 had to go to companies that hadn’t violated labor laws. He signed two more orders making minor clarifications to that original order later that year and in 2016.
Trump’s new order revoking those three orders, and directed federal agencies to review any procedural changes they made because of the orders. When companies bid for federal contracts, they’ll no longer have to disclose if they’ve violated the Fair Labor Standards Act, the Occupational Safety and Health Act, the Migrant and Seasonal Agricultural Worker
Protection Act, or the National Labor Relations Act.
Business titans Gary Cohn (National Economic Council director), Dina Powell (senior counselor to the president for economic initiatives and deputy national security adviser), Chris Liddell (assistant to the president for strategic initiatives), and Reed Cordish (assistant to the president for intragovernmental and technology initiatives) will also be on the team.
2 presidential memoranda, March 23: Declaring an emergency in South Sudan
The same day he signed these memoranda, Trump honked the horn of an 18-wheeler truck while meeting with truckers and CEOs on the South Lawn of the White House, Thursday, March 23, 2017.AP Photo/Andrew Harnik
Trump signed two memoranda declaring a national emergency in South Sudan, and notifying Congress that he did so, extending the emergency Obama declared in 2014. One million people there are on the brink of dying from a lack of food.
Office of Management and Budget Director Mick Mulvaney has said that the president’s proposed budget would “spend less money on people overseas and more money on people back home” and “absolutely” cut programs like those that would aid those starving in South Sudan.
Presidential memorandum, March 20: Delegating to Tillerson
President Donald Trump smiles at Secretary of State Rex Tillerson after he was sworn in in the Oval Office of the White House in Washington, Wednesday, Feb. 1, 2017.Associated Perss/Carolyn Kaster
Trump delegated presidential powers in the National Defense Authorization Act to Secretary of State Rex Tillerson. The law doles out funding “for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths.”
Presidential proclamation, March 17: National Poison Prevention Week
President Donald Trump departs the White House with his grandchildren Arabella and Joseph on March 3, 2017.Win McNamee/Getty Images
Trump proclaimed March 19 through March 25, 2017 National Poison Prevention Week in order to encourage Americans to safeguard their homes and protect children from ingesting common household items that may poison them.
With the written aim of improving the efficiency of the federal government, Trump signed an order to shake up the executive branch, and “eliminate or reorganize unnecessary or redundant federal agencies” identified in a 180-day review.
It directs Office of Management and Budget Director Mick Mulvaney to review agency head’s proposed plans to reorganize or shrink their departments, and submit a plan to Trump by September 2017 outlining how to streamline the government.
Historians expressed skepticism that Trump would be able to effectively shrink the government, since many past presidents have tried and failed to do so. Critics argued that Trump could use the order to dismantle federal agencies that he or his Cabinet members don’t like.
Presidential proclamation, March 6: National Consumer Protection Week
March 5 through March 11, 2017 was National Consumer Protection Week, Trump proclaimed, which “reminds us of the importance of empowering consumers by helping them to more capably identify and report cyber scams, monitor their online privacy and security, and make well-informed decisions.”
President Donald Trump signs a new temporary travel ban in the Oval Office on March 6, 2017.Sean Spicer/Twitter
Trump’s second go at his controversial travel order bans people from Sudan, Iran, Somalia, Yemen, Syria, and Libya from entering the US for 90 days, and bars all refugees from coming into the country for 120 days, starting March 16.
Existing visa holders will not be subjected to the ban, and religious minorities will no longer get preferential treatment — two details critics took particular issue with in the first ban. The new order removed Iraq from the list of countries, and changed excluding just Syrian refugees to preventing all refugees from entering the US.
Democrats denounced the new order, with Senate Minority Leader Chuck Schumer saying the “watered-down ban is still a ban,” and Democratic National Committee Chair Tom Perez saying “Trump’s obsession with religious discrimination is disgusting, un-American, and outright dangerous.”
UPDATE 3/15: US District Judge Derrick Watson put an emergency halt on the revised travelban the day before it would have taken effect, after several states and refugee groups sued in court. Trump vowed to appeal the decision and take the order all the way to the Supreme Court if necessary.
Presidential Memorandum, March 6: Guidance for agencies to implement the new travel ban
Secretary of State Rex Tillerson, Attorney General Jeff Sessions, and Homeland Security Secretary John Kelly make statements on Trump’s new travel ban on March 6, 2017.AP Photo/Susan Walsh
This memo instructs the State Department, the Justice Department, and the Department of Homeland Security how to implement Trump’s new travel ban.
It directs the three department heads to enhance the vetting of visa applicants and other immigrants trying to enter the US as they see fit, to release how many visa applicants there were by country, and to submit a report in 180 days detailing the long-term costs of the United States Refugee Admissions Program.
Executive Order, February 28: Promoting Historically Black Colleges and Universities
Kellyanne Conway, counselor to the president, takes a photo of leaders from Historically Black Colleges and Universities and Trump in the Oval Office.Getty Images
This order established the White House Initiative on Historically Black Colleges and Universities, which will aim to increase private funding of these schools, encourage more students to attend them, and identify ways the executive branch can help these institutions succeed.
Students at some HBCU protested the meeting their leaders attended to witness Trump signing the order, expressing their disapproval of the president in general, and questioning whether the action was “truly a seat at the table” or merely “a photo op.”
Executive Order, February 28: Reviewing the ‘Waters of the United States’ rule
EPA Administrator Scott Pruitt holds up an EPA cap during his first address to the agency.AP Photo/Susan Walsh
The order directed federal agencies to revise the Clean Water Rule, a major regulation Obama issued in 2015 to clarify what areas are federally protected under the Clean Water Act.
Trump’s EPA Administrator Scott Pruitt called the rule “the greatest blow to private property rights the modern era has seen,” in 2015, and led a multi-state lawsuit against it while he was Oklahoma’s attorney general.
David J. Cooper, an ecologist at Colorado State University, cautioned that repealing the rule wouldn’t settle the confusion about what the federal government can protect under the Clean Water Act, or where.
Executive Order, February 24: Enforcing regulatory reform
President Donald Trump meets with union leaders at the White House.Getty Images
This order creates Regulator Reform Officers within each federal agency who will comb through existing regulations and recommend which ones the administration should repeal. It directs the officers to focus on eliminating regulations that prevent job creation, are outdated, unnecessary, or cost too much.
The act doubles down on Trump’s plan to cut government regulations he says are hampering businesses, but opponents insist are necessary to protect people and the environment. Leaders of 137 nonprofit groups sent a letter to the White House on February 28 telling the president that “Americans did not vote to be exposed to more health, safety, environmental and financial dangers.”
Executive Order, February 9: Combating criminal organizations
Recaptured drug lord Joaquin “El Chapo” Guzman is escorted by soldiers at the hangar belonging to the office of the Attorney General in Mexico City, Mexico on January 8, 2016.Reuters/Amanda Macias/Business Insider
The order is intended to “thwart” criminal organizations, including “criminal gangs, cartels, racketeering organizations, and other groups engaged in illicit activities.”
The action directs law enforcement to apprehend and prosecute citizens, and deport non-citizens involved in criminal activities including “the illegal smuggling and trafficking of humans, drugs or other substances, wildlife, and weapons,” “corruption, cybercrime, fraud, financial crimes, and intellectual-property theft,” and money laundering
The Secretary of State, Attorney General, Secretary of Homeland Security, and Director of National Intelligence will co-chair a Threat Mitigation Working Group that will identify ways that local, state, federal, and international law enforcement can work together in order to eradicate organized crime.
It also instructs the co-chairs to present the president with a report within 120 days outlining the penetration of criminal organizations into the United States, and recommendations for how to eradicate them.
President Donald Trump speaks during a meeting with county sheriffs in the Roosevelt Room of the White House in Washington, Tuesday, Feb. 7, 2017.AP Photo/Evan Vucci
Following up on his promise to restore “law and order” in America, Trump signed an executive order intended to reduce violent crime in the US, and “comprehensively address illegal immigration, drug trafficking, and violent crime.”
The action directs Attorney General Jeff Sessions to assemble a task force in order to identify new strategies and laws to reduce crime, and to evaluate how well crime data is being collected and leveraged across the country.
Executive Order, February 9: Protecting law enforcement
Police break up skirmishes between demonstrators and supporters of then-Republican presidential candidate Donald Trump that broke out after it was announced the rally on March 11, 2016 in Chicago, Illinois would be postponed.Scott Olson/Getty Images
The order seeks to create new laws that will protect law enforcement, and increase the penalties for crimes committed against them.
It also directs the attorney general to review existing federal grant funding programs to law enforcement agencies, and recommend changes to the programs if they don’t adequately protect law enforcement.
Executive Order, February 3: Reviewing Wall Street regulations
President Donald Trump signs an executive order rolling back regulations from the 2010 Dodd-Frank law on Wall Street reform on Feb. 3, 2017 in the Oval Office.REUTERS/Kevin Lamarque
Trump signed two actions on Friday that could end up rewriting regulations in the financial industry that Obama and Congress put in place after the 2008 financial crisis.
The executive order sets “Core Principles” of financial regulation declaring that Trump’s administration seeks to empower Americans to make their own financial decisions, prevent taxpayer-funded bailouts, and reduce regulations on Wall Street so US companies can compete globally.
It also directs the Secretary of Treasury to review existing regulations on the financial system, determine whether the Core Principles are being met, and report back to the President in 120 days.
Experts worry that loosening regulations could roll back the Obama administration’s landmark consumer protection reform bill, Dodd-Frank, aimed at reducing risk in the financial system. Sen. Elizabeth Warren, the progressive darling from Massachusetts, led the charge decrying the actions.
Presidential Memorandum, February 3: Reviewing the fiduciary duty rule
President Donald Trump signs an executive action in the White House.AP
The memorandum directs the Labor Secretary to review the “fiduciary rule,” another Obama-era law intended to protect Americans’ retirement money from conflicted advice from financial advisers that has long drawn rebuke from Wall Streeters and was scheduled to go into effect in April.
If the secretary finds the rule conflicts with the administration’s Core Principles, adversely affects the retirement industry, or causes increased litigation, then he should recommend revising or repealing the rule.
Presidential proclamation, February 2: American Heart Month
President Donald Trump and his wife Melania stand for the singing of the National Anthem during his inauguration ceremony at the Capitol on January 20, 2017.REUTERS/Carlos Barria
This ceremonial proclamation invited Americans to wear red on Friday, February 3, 2017 for National Wear Red Day, and followed Congress’ request in 1963 for presidents to annually declare February American Heart Month. The goal is to remember those who have died from heart disease and to improve its prevention, detection, and treatment.
The order requires appointees to every executive agency to sign an ethics pledge saying they will never lobby a foreign government and that they won’t do any other lobbying for five years after they leave government.
Presidential Memorandum, January 28: Reorganizing the National and Homeland Security Councils
Chief White House strategist Steve Bannon.AP Photo/Gerald Herbert
Trump removed the nation’s top military and intelligence advisers as regular attendees of the National Security Council’s Principals Committee, the interagency forum that deals with policy issues affecting national security.
The executive measure established Trump’s chief strategist, Steve Bannon, as a regular attendee, and disinvited the chairman of the Joint Chiefs of Staff and the Director of National Intelligence to attend only when necessary.
Top Republican lawmakers and national security experts roundly criticized the move, expressing their skepticism that Bannon should be present and alarm that the Joint Chiefs of Staff sometimes wouldn’t be.
Protesters assemble at John F. Kennedy International Airport in New York, Saturday, Jan. 28, 2017 after earlier in the day two Iraqi refugees were detained while trying to enter the country.Associated Press/Craig Ruttle
In Trump’s most controversial executive action yet, he temporarily barred people from majority-Muslim Iran, Iraq, Libya, Somalia, Sudan, and Yemen from entering the country for 90 days, and Syrians from entering until he decides otherwise.
Federal judges in several states declared the order unconstitutional, releasing hundreds of people who were stuck at US airports in limbo. The White House continues to defend the action, insisting it was “not about religion” but about “protecting our own citizens and border.”
Presidential Memorandum, January 27: ‘Rebuilding’ the military
Marine General James Mattis.US Marine Corps
This action directed Secretary of Defense James Mattis to conduct a readiness review of the US military and Ballistic Missile Defense System, and submit his recommendations to “rebuild” the armed forces.
Presidential proclamation, January 26: National School Choice Week
Thousands rally in support of charter schools outside the Capitol in Albany, N.Y., on Tuesday, March 4, 2014.AP Images
Trump proclaimed January 22 through January 28, 2017 as National School Choice Week.
The ceremonial move aimed to encourage people to demand school-voucher programs and charter schools, of which Trump’s Secretary of Education nominee Betsy DeVos is a vocal supporter. Meanwhile, opponents argue that the programs weaken public schools and fund private schools at taxpayers’ expense.
Supporters of then-Republican presidential candidate Donald Trump chant, “Build that wall,” before a town hall meeting in Rothschild, Wis. on April 2, 2016.Associated Press/Charles Rex Arbogast
Trump outlined his intentions to build a wall along the US border with Mexico, one of his main campaign promises.
The order also directs the immediate detainment and deportation of illegal immigrants, and requires state and federal agencies tally up how much foreign aid they are sending to Mexico within 30 days, and tells the US Customs and Border Protection to hire 5,000 additional border patrol agents.
While Trump has claimed Mexico will pay for the wall, his administration has since softened this pledge, indicating US taxpayers may have to foot the bill, at least at first.
Executive Order, January 25: Cutting funding for sanctuary cities
Lordes Reboyoso, right, yells at a rally outside of City Hall in San Francisco, Wednesday, Jan. 25, 2017.Associated Press/Jeff Chiu
Trump called “sanctuary cities” to comply with federal immigration law or have their federal funding pulled.
The order has prompted a mixture of resistance and support from local lawmakers and police departments in the sanctuary cities, which typically refuse to honor federal requests to detain people on suspicion of violating immigration law even if they were arrested on unrelated charges. The city of San Francisco is already suing Trump, claiming the order is unconstitutional.
The first two direct agencies to immediately review and approve construction of the Dakota Access Pipeline and the Keystone XL Pipeline, and the third requires all pipeline materials be built in the US.
While pipeline proponents argue that they transport oil and gas more safely than trains or trucks can, environmentalists say pipelines threaten the contamination of drinking water.
Presidential Memorandum, January 23: Reinstating the ‘Mexico City policy’
Hundreds of thousands of protesters march down Pennsylvania avenue during the Women’s March on Washington January 21, 2017 in Washington, DC to protest newly inaugurated President Donald Trump.Aaron P. Bernstein/Getty Image
The move reinstated a global gag rule that bans American non-governmental organizations working abroad from discussing abortion.
Democratic and Republican presidents have taken turns reinstating it and getting rid of it since Ronald Reagan created the gag order in 1984. The rule, while widely expected, dismayed women’s rights and reproductive health advocates, but encouraged antiabortion activists.
UPDATE 4/12: The hiring freeze is lifted, but budget director Mick Mulvaney says many jobs will stay unfilled because the Trump administration wants to reduce the federal workforce. The AP reported that the federal government added 2,000 workers in February and January, despite the freeze.
Presidential Memorandum, January 23: Out of the TPP
This action signaled Trump’s intent to withdraw from the Trans Pacific Partnership, a trade deal that would lower tariffs for 12 countries around the Pacific Rim, including Japan and Mexico but excluding China.
Results were mixed. Sen. Bernie Sanders said he was “glad the Trans-Pacific Partnership is dead and gone,” while Republican Sen. John McCain said withdrawing was a “serious mistake.”
Executive Order, January 20: Declaring Trump’s intention to repeal the Affordable Care Act
Then President-elect Donald Trump meets with Speaker of the House Paul Ryan of Wisconsin on Capitol Hill November 10, 2016.Reuters
One of Trump’s top campaign promises was to repeal and replace the Affordable Care Act, commonly called Obamacare.
His first official act in office was declaring his intention to do so. Congressional Republicans have been working to do just that since their term started January 3, though there was dissent among Republicans over whether or not to complete the repeal process before a replacement plan is finalized and strident Democratic resistance to any repeal of the ACA.
UPDATE 3/28: House Speaker Paul Ryan pulled the bill to repeal and replace the ACA, officially called the American Health Care Act, on March 24 after Republicans didn’t have enough votes to pass it. But some members of the GOP are still working on a way to dismantle Obamacare.
Presidential Memorandum, January 20: Reince’s regulatory freeze
President-elect Donald Trump and Republican National Committee Chairman Reince Priebus on election night.Mark Wilson/Getty Images
Trump’s Chief of Staff Reince Priebus signed this action, directing agency heads not to send new regulations to the Office of the Federal Register until the administration has leaders in place to approve them.
Obama’s Chief of Staff Rahm Emanuel signed a similar memorandum when he took office in 2009, but as Bloomberg notes, Priebus changed the language from a suggestion to a directive.
The action is partly carried out to make sure the new administration wants to implement any pending regulations the old one was considering. Environmentalists worried if this could mean Trump is about to undo many of Obama’s energy regulations.
Story 1: French Confirm Killing of Police Officer By Radical Islamic Terrorist Killer, Karim Cheurfi, Connected To Islamic State, — Videos —
ISIS Reportedly Claims Responsibility For Paris Attack That Left 1 Officer Dead | TODAY
Is Marine Le Pen the Donald Trump of France?
Paris shooting: Gunman was ‘focus of anti-terror’ probe – BBC News
Police search home of shooting suspect in Paris suburb
Raw: Memorial For Officer Killed In Paris Shooting
Geert Wilders message for Europe
Revealed: ISIS terrorist who shot dead cop in Paris attack was arrested TWO MONTHS ago for threatening to kill police and served 15 years for trying to murder two officers
Policeman Xavier Jugele, 37, was killed last night after being ‘targeted’ on the Champs Elysees in central Paris
The attacker was eventually shot dead after French police officers rushed to the scene in the heart of the city
The gunman’s Audi contained a pump action shotgun, knives and ID of known ‘extremist’ Karim Cheurfi
Two other police officers were ‘seriously injured’ and a ‘female foreign tourist’ was wounded in the incident
A note declaring allegiance to ISIS was discovered on the Champs Elysees and is being investigated by police
By Abe Hawken and Amie Gordon and Anthony Joseph and Sam Tonkin In London and Nick Fagge and Peter Allen In Paris for MailOnline
PUBLISHED: 13:42 EDT, 20 April 2017 | UPDATED: 17:21 EDT, 21 April 2017
French security services are today facing troubling questions as to how they failed to prevent an ISIS gunman from slaughtering one policeman and wounding two other officers in Paris when he was arrested as recently as February.
Karim Cheurfi, 39, had served 15 years of a 20-year jail sentence for attempting to kill two officers in 2001, before his release last year.
In February, the terrorist tried to obtain weapons and made threats to kill police officers, but was let go in early March due to lack of evidence.
On Thursday night, the fanatic was killed by police after he got out of his Audi and opened fire at police who had stopped at a red light on Champs Elysees. His car was packed with more weapons, including a pump action shotgun and knives. A copy of the Koran was also found in the vehicle.
Traffic officer Xavier Jugele, 37, died instantly with a shot to the head, while the other two were hurt before Cheurfi himself was gunned down by nearby armed police. A ricocheting bullet fired by the terrorist also wounded a female foreign tourist passing by.
ISIS has claimed responsibility for the attack and nicknamed the attacker ‘Abu Yousuf al-Belgiki’, which translates to ‘the Belgian’ in Arabic – a name which was listed in uncovered documents from the terror group last year.
A note declaring allegiance to ISIS was discovered on the Champs Elysees and is being investigated by police. Its presence and the speed at which ISIS claimed responsibility may suggest the attack was directed by the jihadist group rather than carried out by a lone supporter.
Pictured (left and right) is the suspected ISIS gunman, who has been identified locally as 39-year-old Karim Cheurfi
The alleged ISIS gunman, identified as 39-year-old Karim Cheurfi – who was jailed for 20 years for trying to kill officers in 2001 – parked his Audi and opened fire after police stopped at a red light on the world famous avenue. Pictured is his arrest warrant from last month, when he was detained for trying to obtain weapons ‘to kill police’
Traffic officer Xavier Jugele (pictured), 37, died instantly with a shot to the head, while the other two were hurt before Cheurfi himself was gunned down by nearby armed police
Pictured is armed police crowded two other officers, believed to have been shot in the attack, on Champs Elysees on Thursday night
French police leave the home of ISIS gunman Karim Cheurfi in the suburb of Chelles, in Paris, following last night’s attack
A woman places a flower near the spot on the Champs Elysees where the shooting occurred last night in the French capital
A body is removed from the scene after a traffic officer was killed by an ISIS gunman in central Paris last night
French police officers and forensic teams searched a vehicle which was close to the scene on the Champs Elysees in Paris
A police lorry seized the Audi which the attacker was driving, before he got out and shot at traffic officers last night
A still image from video footage shows police forensic investigators inspect the car used by the attacker in Paris last night
In the latest developments after the attack:
French police have this morning arrested three family members of ISIS gunman Karim Cheurfi
Police are hunting a second suspect, who was brought to their attention by Belgian authorities
A man whose image appeared on social media as ‘second suspect’ handed himself to police in Antwerp claiming he was not linked to the plot. Detectives have said this man had nothing to do with the attack
Far-right presidential candidate Marine Le Pen called for all French terror suspects to be expelled
France’s government has reviewed its already extensive election security measures and says it is ‘fully mobilised’ and nothing will stop Sunday’s presidential vote
US President Donald Trump believes the attack will have a ‘big effect’ on the outcome of the election
British Prime Minister Theresa May has sent condolences to the French president following the latest attack but the pair have not spoken directly since last night
Iran’s foreign secretary Bahram Ghasemi said France was feeling a blowback for its support of rebels in Syria
French officials revealed that Cheurfi was detained in Meaux, 24 miles east of Paris, on February 23 this year, after it emerged he was trying to buy weapons ‘to kill police’.
On Friday night, but prosecutors tonight denied that he was on a security watch list and added the terrorist showed no signs of radicalisation before the attack.
He reportedly used the alias ‘Abu Yousuf the Belgian’ and reportedly made threats to murder officers using the social media app Telegram, an instant messaging service.
Despite having a long list of police-hating convictions, he was able to obtain a Kalashnikov, a pump action shotgun and several knives ahead of last night’s attack.
He had been jailed for 20 years in 2005 for trying to kill two policemen. He opened fire five times with a .38 revolver following a car chase in 2001, leaving the officers and a third victim wounded. All three survived the attack in Roissy-en-Brie, in the Seine-et-Marne department of northern France.
An armed police officer hoists his weapon as they storm the streets of Paris after the latest terror attack to hit the city
Armed police outside a shop in central Paris after an ISIS gunman killed a traffic officer and injured three other people
Armed police officers on the streets of Paris after a gunman killed a traffic cop and seriously injured two others last night
Armed police officers stood guard after they rushed to the scene in the centre of the capital following the incident which left frightened witnesses sprinting for their lives
A team of forensic detectives examine the Audi, which the gunman was driving. ID of Karim Cheurfi was found in the vehicle
Cheurfi, who was born in France, was a recluse who blamed police for ruining his life, a friend of the family revealed today.
OFFICER SHOT DEAD GUARDED BATACLAN AT ITS REOPENING
By Sam Tonkin for MailOnline
The policeman killed by an ISIS gunman on the Champs-Elysees was today named as Xavier Jugelé, a 37-year-old Paris officer who defiantly said ‘no to terrorists’ at the reopening of the Bataclan theatre last November.
He was shot in the head when the terrorist – identified today as French national Karim Cheurfi, 39 – launched his attack on three police officers at around 9pm last night.
Jugelé, who was a proud defender of gay rights, was named as the victim who died by French newspaper Le Parisien.
It has since emerged that Jugelé (pictured left and right) was on duty at the reopening of the Bataclan theatre on November last year – a year on from the Paris attacks which left 130 dead
It has since emerged that Jugelé was on duty at the reopening of the Bataclan theatre on November last year – a year on from the Paris attacks which left 130 dead.
As British singer Sting marked the occasion with a performance at the concert hall, Jugelé defiantly told PEOPLE.com that he was there ‘to say no to terrorists’.
The policeman added: ‘I’m happy to be here. Glad the Bataclan is reopening. It’s symbolic.
‘We’re here tonight as witnesses. Here to defend our civic values. This concert’s to celebrate life. To say no to terrorists.
‘It doesn’t feel strange, it feels important,’ he added. ‘Symbolic.’
He did not attend formal mosque prayer services and became fascinated by jihadist propaganda via the internet, a confident of his mother claimed.
‘Karim did not pray, he drank alcohol and watched jihadist propaganda,’ neighbour Hakim, 50, told MailOnline.
‘He was not a good Muslim, he was a lost soul. He had no friends, no girlfriend, he never went out. He stayed at home all day watching stuff on the internet.’
Another neighbour added: ‘Karim didn’t go to the mosque. He just stayed at home. You never saw him.’
Hakim continued: ‘Karim blamed the police for ruining his life. He fired (a pistol) at police during a burglary and got sentenced to 15 years prison.
‘He was only 20 at the time. He hated the police, he said they had ruined his life. He was ‘anti-cop’. He would swear at officers in the street, call them bastards. He didn’t care.’
Hakim, whose family is close to Cheurfi’s mother, said the gunman had only recently returned to the quiet residential street after spending years behind bars.
Cheurfi lived separately from his mother in a purpose-built apartment in the front of the property.
Hakim added: ‘He lived in the studio in the garden. The mother lived in the big house.’
Cheurfi’s Algerian-born mother had divorced his father and had married a Frenchman with who she had second son. She later divorced her second son.
Another neighbour said: ‘His parents split up but they stayed living at the same property.
‘The father Salat lived in the apartment in the front of the garden and the mother lived in the house at the back of the property.
‘The mother married again, to a Frenchman, and they had a son together but the father stayed living at the property.
‘So it was a bit complicated but that’s life. Karim got on well with his half brother who is called Stephane.
‘But he went to live in the apartment with his father when he got of prison.’
Another neighbor added: ‘The mother is not here. She is in Algeria. She goes there every few months to visit relatives. She’s not been well.’
Officers have been searching the home of Karim in east Paris and arrested three of his family members.
A French government spokesman said the ISIS gunman began firing against police using ‘a weapon of war’.
The fatal incident unfolded as presidential candidates, including National Front party leader Marine Le Pen, debated on a TV show nearby before Sunday’s election.
Paris police search the suspected Champs-Elysee attacker’s house
A French police officer has been shot dead on the Champs Elysees in Paris (pictured) – just days before the French presidential election
People held their hands up as they walked towards officers close to the scene where a policeman was fatally shot in Paris
Police closed off the popular avenue (pictured) after a policeman was killed during a shooting incident in the French capital
Pictured is the scene of a restaurant in Paris when the gunman opened fire on the streets outside. Diners are seen cowering on the ground in fear
An armed policeman speaks to diners in a nearby Parisien restuarant, who cowered to the floor in fear of the ISIS gunman
The gunman has been identified by police but they will not officially reveal his name until investigators determine whether he had accomplices, according to the Paris prosecutor.
Prosecutor Francois Molins said: ‘The identity of the attacker is known and has been checked. I will not give it because investigations with raids are ongoing.
‘The investigators want to be sure whether he had or did not have accomplices.’
The Interior Ministry spokesman said the officers were deliberately targeted and the police union added that the policeman was killed while sat in a car at a red light.
US President Donald Trump said: ‘It looks like another terrorist attack. What can you say? It never ends.’
The attack which took place on the Champs Elysees (pictured) comes just three days before the first round of balloting in France’s tense presidential election
A French police officer stood guard on the Champs Elysees in central Paris following the fatal shooting, which has been described as ‘terrorist related’
Police officers secured the area after a gunman got of an Audi vehicle and targeted officers by firing an automatic gun towards them
A man and a woman put their hands in the air as armed officers stood just yards away from them following the incident in the city
Officers searched the home of the suspected gunman on Thursday evening after they travelled to his home in the east part of the capital
People were seen running away from the area after Thursday night’s attack, which has been described as being ‘terrorist related’
Police officers searched the home of the suspected gunman in east Paris following the attack in the capital on Thursday
The Audi which is believed to belong to the attacker was taken away from the scene on the back of a lorry as police rushed to the popular avenue
Forensic experts and police officers were seen examining evidence from a van on the Champs Elysees in central Paris
‘I heard six gunshots’: Eyewitness tells how Paris attack unfolded
ISIS claimed responsibility for the attack and dramatic video footage showed the immediate aftermath of the incident which left one policeman dead.
Pierre-Henry Brandet, spokesman for the French Interior Ministry, confirmed that both injured officers in hospital were now ‘out of danger’ and ‘stable’, while the female tourist was far less badly hurt.
Mr Brandet did not name any of the victims, but praised the officers for ‘helping to avoid a bloodbath’ by ‘neutralising’ the attacker as quickly as possible.
French President Francois Hollande said the attack was ‘terrorist related’ and scheduled an emergency meeting following the shootings on Thursday evening.
Mr Hollande said a national tribute will be paid to the policeman and added that a ‘passerby was hit’ before the ‘assailant was neutralised’.
Conservative contender Francois Fillon, who has campaigned against ‘Islamic totalitarianism,’ said on France 2 television that he was canceling his planned campaign stops Friday.
Far-right candidate Le Pen, who campaigns against immigration and Islamic fundamentalism, took to Twitter to offer her sympathy for law enforcement officers ‘once again targeted.’
She canceled a minor campaign stop, but scheduled another.
Centrist candidate Emmanuel Macron offered his thoughts to the family of the dead officer.
Socialist Benoit Hamon tweeted his ‘full support’ to police against terrorism.
Le Pen and Francois Fillon announced that they have both cancelled their campaigning on Friday.
Paris gunman’s neighbour speaks out as police raid suspect’s home
French presidential election candidate Jean-Luc Melenchon (pictured) took part in the TV show just days before the election
French presidential candidates, including National Front party leader Marine Le Pen (pictured), took part in a key debate
Mr Brandet said ‘all lines of investigation were being pursued’, while intelligence sources said the dead assailant was a known radical on a so-called S-file, for ‘State-security’.
This means he would have been under surveillance, because he was a known risk to the country.
An eyewitness, called Chelloug, said: ‘It was a terrorist. He came out with a Kalashnikov and started shooting, but he could’ve shot us on the pavement and killed more people with a spray of shots.
‘But he targeted the policemen and fortunately there were the policemen who killed him.’
Another witness said: ‘I saw someone shoot at the police officers. They returned fire, they killed him, he fell on the floor. And then the emergency services came.
‘It took place by Zara and there was a CRS (Republican Security Companies) van parked up and the man shot the police officers. He took out a weapon and shot them.
‘I think the police officer was killed on the spot and his colleagues fired back and killed the individual.’
The attack comes just three days before the first round of balloting in France’s tense presidential election.
A witness, identified only as Ines, told BFM that she heard a shooting, saw a man’s body on the ground and the area was quickly evacuated by police.
It comes just two days after police arrested two men in southern Marseille with weapons and explosives who were suspected of preparing an attack to disrupt the first-round of the presidential election on Sunday.
France is in a state of emergency and at its highest possible level of alert since a string of terror attacks that began in 2015, which have killed over 230 people.
Thousands of troops and armed police have been deployed to guard tourist hotspots such as the Champs Elysees or other potential targets like government buildings and religious sites.
Hollande says they are convinced the attack is of terrorist nature
Police officers quickly secured the area – which is popular with tourists and Parisians – after the attack and the road was on lockdown by 9pm
Police search the car reportedly used in Paris attack
Police officers took positions near the Champs Elysees avenue in Paris after the gunman – who was known to the security services – launched the attack
An armed soldier spoke to a man a told him to leave the area following the fatal shooting close to the Arc de Triomphe (pictured)
French soldiers secure the Champs Elysees Avenue after a police officer was killed when a gunman opened fire in Paris
French police officers searched the area after some of their colleagues were shot in the heart of Paris on Thursday evening
French President Francois Hollande (pictured) said the attack was ‘terrorist related’ and scheduled an emergency meeting following the shootings
‘Stay back, stay back!’ Police warn after shooting in Paris
LE PEN ACCUSED OF ‘EXPLOITING’ ATTACK FOR VOTES
By Thomas Burrows for MailOnline
French Prime Minister Bernard Cazeneuve has accused far-right candidate Marine Le Pen of ‘exploiting’ the Champs-Elysees terror attack to win votes ahead of Sunday’s presidential election.
In the wake of the shooting Le Pen called for foreign terror suspects to be expelled immediately and claimed France needed a ‘presidency which acts and protects us.’
Responding to that, Cazeneuve, a Socialist, said Le Pen’s National Front (FN) ‘after each attack, seeks to exploit it and use it for purely political means.’
Experts believe the shooting last night could boost Le Pen’s chances of getting elected just days before France goes to the polls.
Le Pen today called for foreign terror suspects to be kicked out the country despite the fact the ISIS gunman was French
Voters could flock to far-right candidate Marine Le Pen following the latest terror attack
In last night’s attack a police officer was killed and two more were injured after a gunman opened fire close to the Champs-Elysees.
Le Pen today called for foreign terror suspects to be kicked out the country despite the fact the ISIS gunman was French. The 39-year-old had used the war name ‘Abu Yousuf the Belgian’.
Officials confirmed the homegrown fanatic was a French national despite his nickname.
A manhunt is underway for the second suspect who travelled by train to France from Belgium.
The Champs-Elysees terror attack could boost far-right candidate Marine Le Pen’s chances of getting elected, experts believe
The shooting took place just four days before the French election and experts believe it could bolster Le Pen’s chances of being elected.
Le Pen has made immigration and security the core part of her campaign. She has pledged to tighten French borders controls and build more jails, and claimed authorities were not doing enough to protect citizens from terror attacks.
More than half of police officers in France had already said they were voting for Le Pen because of her strong anti-terror stance, according to an IFOP poll.
Experts believe it could increase her chances of winning Sunday’s election.
Fredrik Erixon, director at the European Centre for International Political Economy, told CNBC: ‘[It could lead to] a greater performance of Marine Le Pen than otherwise would have been the case.
‘It’s difficult to see how this attack will not play into the hands of political forces that want this campaign to be focused only on issues around migration and terrorism.’
Vishnu Varathan, senior economist at Mizuho Bank, added: ‘The Paris gunman attack may well swing support in her favor; and this may not be picked up by the polls in a timely manner.’
Mobile phone footage appears to show officer looking over ‘body’
Armed police officers were quick on the scene and closed the world famous avenue following the incident which shocked the city
The world famous was shut at around 9pm and it is believed police are still searching for a second suspect in relation to the attack
Police officers blocked the access of a street near the Champs Elysees in Paris after the fatal shooting on Thursday, April 20
Officers were wearing vests and helmets as they patrolled the area close to where the fatal shooting took. A 39-year-old man is believed to be responsible for the shooting
The world famous street was put on lockdown by 9pm and officers guarded the area in central Paris (pictured, the Eiffel Tower in the background)
A policeman attended the scene and was armed with a gun following the incident. Police have reportedly issued a warrant for a second attacker
Up until now, polls showed voters more concerned about unemployment and their spending power than terrorism or security, though analysts warned this would change in the event of further bloodshed.
For weeks, centrist former banker Le Pen has been out in front but opinion polls now show there is a chance that any of the four leading candidates could reach the second-round runoff on May 7.
Scandal-plagued conservative Fillon and far-left firebrand Jean-Luc Melenchon have closed the gap substantially in the last two weeks.
A COUNTRY UNDER SIEGE: TIMELINE OF FRANCE TERROR
By Rory Tingle for MailOnline
March, 18, 2017 – Convicted criminal with links to radical Islam shouted ‘I am here to die for Allah, there will be deaths’ seconds before he was shot dead during an attack at Orly airport. The 39-year-old, named locally as career criminal Ziyed Ben Belgacem, was killed after wrestling a soldier’s gun from her and fleeing into a McDonald’s. He sent a text message to his brother and father stating ‘I shot the police’, shortly before he was killed.
February 3, 2017 – A man is shot five times outside the Louvre museum in the heart of Paris after attempting to storm the historic art gallery.
July 14, 2016 – Amid Bastille Day celebrations in the Riviera city of Nice, a large truck is driven into a festive crowd. Some 86 people from a wide variety of countries are killed. The driver is shot dead. Islamic State extremists claim responsibility for the attack. The state of emergency in France is extended and extra protection, including robust barriers to prevent similar attacks, is put in place at major sites in France.
June 13, 2016 – Two French police officers are murdered in their home in front of their 3-year-old son. Islamic State claims responsibility for the slaying, which was carried out by a jihadist with a prior terrorist conviction. He is killed by police on the scene.
Nov. 13, 2015 – Islamic State militants kill 130 people in France’s worst atrocity since World War II. A series of suicide bomb and shooting attacks are launched on crowded sites in central Paris, as well as the northern suburb of Saint-Denis. Most of those killed are in a crowded theater where hostages are taken. Islamic State extremists claim responsibility and say it was in retaliation for French participation in airstrikes on the militant group’s positions in Syria and Iraq. It leads to the declaration of a state of emergency in France. Police powers are expanded.
Jan. 7, 2015 – Two brothers kill 11 people inside the Paris building where the satirical magazine Charlie Hebdo is headquartered in what Islamic State extremists claim is retaliation for the publication of cartoons about the Prophet Muhammad. More are killed subsequently in attacks on a kosher market in eastern Paris and on police. There are 17 victims in all, including two police officers. The attackers are killed.
The UK Foreign Office said: ‘The British Embassy is in contact with local authorities and urgently seeking further information following reports of a shooting incident on the Champs-Elysees in Paris.
‘You should remain vigilant and follow the advice of the local security authorities and/or your tour operator.
‘If you’re in the area and it is safe to do so, contact your friends and family to tell them you are safe.’
were photographed standing on top of a vehicle on the Champs Elysees following an incident which left one officer dead
French police officers reacted after the shooting which left one officer dead and two more seriously injured in Paris
French soldiers were armed with guns (pictured) and stood guard at the Arc de Triomphe near the Champs Elysees in Paris
Heavily armed officers had flooded the area following the gunshots which were heard in a busy part of the French capital
Reports have suggested that two police officers have been killed on the Champs Elysees in central Paris (pictured) this evening
It was originally believed the other officer was seriously wounded while the attacker was killed on the world famous avenue (pictured)
The incident last night comes as France remains in a state of emergency following the Paris attacks in 2015 and the Bastille Day killings in Nice in 2016.
The shooting comes just hours after one of the busiest roads in Paris was closed off by police as officers dealt with a ‘suspicious package’.
Reports suggested that items were discovered by officers as Rue de Rivoli remained shut. Stunned witnesses described seeing a large police presence on the two-mile-long road.
Rue de Rivoli is a busy commercial street just north of the River Seine which is home to some of the most fashionable shops in the world.
CHAMPS-ELYSEES: THE MOST BEAUTIFUL AVENUE IN THE WORLD
By Thomas Burrows for MailOnline
The Champs-Elysees – the scene of Thursday night’s terror attack – is the beating historic heart of Paris.
It has been described as the ‘most beautiful avenue’ in the world and is visited by millions of tourists every year.
Tens of thousands of people daily throng the tree-lined 1.2 mile avenue that is home to luxury stores and chain stores, cafes, cinemas and high-end offices.
A tourist draw as famed as the Eiffel Tower just across the River Seine, the avenue, stretching from the Arc de Triomphe down to Concorde Square, was first laid out in 1670.
Over the decades people have gathered there to mark momentous moments in French history.
During the French Revolution in 1789 an angry mob set off from the avenue to march on Versailles, Louis XVI’s opulent retreat.
It was also the site chosen by General Charles de Gaulle to celebrate the August 25, 1944, liberation of Paris from the Germans during World War Two.
More recently, hundreds of thousands congregated along the avenue to celebrate France’s 1998 World Cup victory (sealed with a 3-0 win over Brazil) on home soil.
The Champs Elysees is famously the finish line for the world’s toughest cycling race, the Tour de France.
Thursday was not the first time violence has been visited on the avenue.
In 1986, it witnessed two attacks – the first, on February 3, seeing one death and eight injured at the Claridge shopping arcade.
A second attack on March 20 at the Point Show arcade killed two and injured 29. Both attacks were linked to Middle East terrorism.
On Bastille Day in 2002, president Jacques Chirac survived an assassination attempt by a right-wing extremist who fired off one shot from a rifle hidden in a guitar case before bystanders wrestled him to the ground.
Story 2: Will Marine Le Pen Win In The First Round of French Presidential Election? First Round –Yes — — Making France Great Again — Second Round –Marine Le Pen May Be First Woman President or Emmanuel Marcon The Youngest President — Videos
“Marine Le Pen will be the next French President” – Christopher Dickey
Dear French People | French Presidential Election 2017
Who will be France’s next leader? | DW English
France’s Presidential Election: What You Need to Know
French election 2017: Who’s who – BBC News
France’s presidential election: A populist front
French Presidential Election 2017 Explained
French presidential candidate Marine Le Pen and Europe’s far-right movement
Le Pen vs Macron
RT – Why Marine Le Pen is The Only Way to Save Europe #Frexit #EndEU
Le Pen destroys Merkel
Marine Le Pen will not put up with any nonsense from BBC reporter
Marine Le Pen gets poll boost after Paris attack as Donald Trump says her chances of victory have improved
“Whoever is the toughest on radical Islamic terrorism, and whoever is the toughest at the borders, will do well in the election,” he said.
US presidents typically avoid weighing in on specific candidates running in overseas election. But Mr Trump suggested his opinion was no different from an average observer, saying: “Everybody is making predictions on who is going to win. I’m no different than you.”
Xavier Jugelé, 37, a policeman who had been deployed in the 2015 Bataclan attack, was killed in the shooting.
Ms Le Pen, the far-Right candidate, blasted the mainstream “naive” Left and Right for failing to get tough on Islamism, calling for France to instantly reinstate border checks and expel foreigners who are on the watch lists of intelligence services.
François Fillon, the mainstream conservative candidate, pledged an “iron fist” in the fight against “Islamist totalitarianism” – his priority if elected. “We are at war, it’s either us or them,” said the conservative, whose campaign has been weighed down by allegations he gave his British wife a “fake job”.
Meanwhile, Emmanuel Macron, the independent centrist, whom critics dismiss as a soft touch, hit back at claims shutting borders and filling French prisons would solve the problem, saying: “There’s no such thing as zero risk. Anyone who pretends (otherwise) is both irresponsible and deceitful.”
Sticking to his campaign agenda, far-Left candidate Jean-Luc Mélenchon told everyone to keep a “cool head” as he took part in a giant picnic.
A last-minute Odoxa poll taken after the attack suggested that Mr Macron was still on course to come first in Sunday’s first round, with Ms Le Pen just behind and through to the May 7 runoff.
However, Mr Fillon and Mr Mélenchon were still snapping at their heels.
The government on Friday announced elite units would join 50,000 police and troops to guard polling booths on Sunday in France’s first presidential election to be held in a state of emergency.
Matthieu Croissandeau, editor of Nouvel Obs magazine, said the French are now thicker-skinned after two years of bloodshed. “The French are unfortunately getting used to terror attacks on home soil and I don’t think this latest one created the shock and awe that might have made a significant difference,” he said.
Ms Le Pen has struggled to get the campaign to focus on her party’s pet issues of security, Islam and immigration. By contrast, she has been thrown on the defensive over her position to pull out of the eurozone.
After the attack, she called on the “notoriously feeble” socialist, President François Hollande, to instantly reinstate border checks and expel foreigners who are on the watch lists of intelligence services. She said: “We cannot afford to lose this war. But for the past 10 years, Left-wing and Right-wing governments have done everything they can for us to lose it.
“We need a presidency which acts and protects us,” she said from her Paris campaign headquarters. Elected French president, I would immediately, and with no hesitation, carry out the battle plan against Islamist terrorism and against judicial laxity.”
Marine Le Pen reacts to the terror attack in Paris
But Ms Le Pen was not the only one to issue stern pledges. Mr Fillon, who also talks tough on security, said the fight against “Islamist totalitarianism” should be the next president’s priority.
“It will require an unyielding determination and a cool head,” the former prime minister said. “We are at war, there is no alternative, it’s us or them.”
Mr Fillon, though knocked off his initial course towards victory by incessant allegations involving “fake job” payments to his British wife, promised to govern with “an iron fist”.
But the moderate Mr Macron, whom other candidates have portrayed as too inexperienced, took a different tack, warning against any attempts to use the shooting for political gain. “I think we must once and for all have a spirit of responsibility at this extreme time and not give in to panic and not allow it to be exploited, which some might try to do,” he told French radio.
Ms Le Pen’s solutions, he said, were woefully simplistic and “would not protect France”. And he added that to promise a “zero risk” scenario “is both irresponsible and deceitful”.
He also took a swipe at Mr Fillon, saying that intelligence had been depleted on his watch as the prime minister in Nicolas Sarkozy’s presidency.
Meanwhile, Bernard Cazeneuve, the Socialist prime minister, accused Le Pen of “shamelessly seeking to exploit fear and emotion”.
Footage shows moments after suspected terrorist is shot in Paris
Opinion polls have for months forecast that Le Pen would make it through to the run-off, but then lose in the final vote. Given the margin of error, none of the leading four candidates is a sure bet to reach the final. All hope to woo the third of French voters still undecided.
Previous terror attacks ahead of elections – such as the November 2015 attacks in Paris before regional ballots – did not effect those ballots.
Analyst Who Predicted Trump’s Ascendancy Bets on Le Pen Win
by Sid Verma
April 21, 2017, 3:41 AM CDT April 21, 2017, 5:42 AM CDT
Undecided voters bad news for Macron, says GaveKal’s founder
Recommends overweight sterling, large-caps; bond shorts
How Will Markets React to Elections in France?
Don’t bank on a relief rally in the euro area anytime soon.
Markets are underpricing the prospect of Marine Le Pen emerging victorious in the French election as a sea of undecided voters throws into sharp relief pronounced apathy for center-leftist Emmanuel Macron — the front-runner by a whisker — and the backlash against the European Union project.
That’s the conclusion drawn by Charles Gave, founder of Hong-Kong based asset-allocation consultancy GaveKal Research, who predicted the triumph of Donald Trump in the U.S. election, and is now betting on a win for the anti-euro National Front candidate.
“Le Pen’s momentum is a slow-moving reaction against the men of Davos — as we have seen with Brexit and Trump — but markets don’t want to believe it,” he said by phone before the first round of the French poll on April 23.
Given the prospect of a Le Pen victory, Gave, who has been researching tactical asset allocation for more than 40 years, is advising clients to adopt long positioning in the pound as the U.K. would benefit from haven bids, and shorts on inflation-linked German bonds amid the risk of deflation in the euro area.
The French economist also recommends bets on the likely outperformance of publicly-listed European multinationals, given their outsize share of income in foreign currencies. In effect, for investors obliged to invest liquidity in euros, Gave says a basket of high-quality stocks is a safer bet than euro-denominated government bonds.
“The market is talking about the nightmare scenario but it’s not pricing it in” said Mark Tinker, head of AXA Framlington Asia. Tinker’s a GaveKal client, and admirer of Gave’s tail-risk warnings over the past year. “After Sunday, we will have more information to make a considered risk-return wager to trade and hedge, but high-quality European companies and German bonds look like an attractive bet,” Tinker said.
Markets are pining for a scenario that would preserve the status quo: Macron, an independent candidate, defeating Le Pen in the second round on May 7. Thursday saw something of a French relief rally, with strong demand at a government debt auction, while France’s benchmark CAC 40 Index rose 1.5 percent aspolls showed Macron pulling marginally ahead of Le Pen.
The euro held steady on Friday and French bonds gained after a police officer was shot in Paris, which may influence the outcome of the first-round vote, according to some analysts. The CAC 40 dropped for the first time in three days, declining 0.5 percent.
The stars, however, appear to be aligning for the National Front candidate, said Gave. The fact two candidates for the runoff are likely to be determined by voters who have yet to make up their minds — as many as 40 percent — is a bad omen for the centrist contender, he said.
At least half of the far-left and half of the center-right won’t vote for Macron in the second round if he is pitted against Le Pen, believing he is“tainted” by his association with Francois Hollande’s government, and would rather abstain, Gave said.
Supporters of Francois Fillon, a center-right candidate whose momentum has been curtailed by graft charges, and a sizable chunk of Macron’s followers would probably rally to Le Pen’s cause if she were to face leftist Jean-Luc Mélenchon in the final round, according to Gave. He sees only Fillon with a chance to defeat Le Pen in the run-off.
If she emerges victorious, the euro would tank as markets would price in the prospect of its dissolution, rather than focus on Le Pen’s legislative hurdles to exit the single-currency bloc. French and Italian bonds will be “unquotable” given vanishing bids, and the European banking system would be beset by seismic turmoil, he said.
Le Pen waves at the audience after speaking at a rally in Paris on April 17. Christophe Petit Tesson / EPA
COGOLIN, France — Muslims preoccupy Jennifer Troin.
“I’m worried about my nieces having to wear the veil,” said the soft-spoken 29-year-old.
This fear has helped propel the young mother to the far-right of the political spectrum ahead of key presidential elections Sunday — and into the arms of the hard-line National Front party.
Troin sells children’s clothes at a store in Cogolin, a town of 11,000 a few miles from the jet-set resorts of the French Riviera. In 2014, Cogolin became one of a handful of communities nationwide to elect mayors from the National Front, which is also known by the acronym FN.
Jennifer Troin, 29, is a sales assistant in a children’s clothes store in Cogolin, France on April 13, 2017.Saphora Smith / for NBC News
Troin told NBC News that it wasn’t just the FN’s stance on Islam and immigration that attracted her, but also the party’s populist take on the economy.
But most of all, it was the party’s charismatic leader, Marine Le Pen, who captured Troin’s loyalty.
“She fights for women’s rights against Islam,” she said. “I vote because of Marine.”
Troin is part of a quiet army of female National Front supporters, who could well tip the balance of the election and give the presidency to the hard-right.
An FN victory would rewrite the continent’s political playbook, given the party’s pledge to take France out of the European Union. Were it to win, it would not have been an easy ride for a movement that peaked in 2002 when founder Jean Mari Le Pen — Marine Le Pen’s father — reached the second and final round of the presidential election.
French voters flocked to the polls in the runoff to ensure Le Pen did not win, instead electing former President Jacques Chirac with a resounding 78 percent of the vote. Most pollsters expect a similar outcome in May’s second-round vote, predicting moderate voters to rally once again to shut out the FN.
But few doubt that the party’s anti-immigrant and anti-establishment platform is resonating.
The Front’s anti-Islamic message is especially potent in France, whose 4.7 million Muslims make up around 7.5 percent of the population. Islamist militant attacks have killed more than 230 people over two years and plunged the country into a long-term state of emergency.
Marine Le Pen: Mass Immigration Is a Tragedy for France 1:00
This anxiety deepened on the eve of the election after a gunman ambushed three Parisian police officers on the Champs-Elysees late Thursday, killing one and wounding two others. ISIS claimed responsibility for the shooting and French President Francois Hollande said it was likely a terrorist attack.
Meanwhile, the FN’s influence has spread from its heartlands along the Mediterranean coast and in the rust-belt north, into rural “forgotten” France.
‘Marine is different’
Polling institute Elabe recently predicted that 22 percent of women would vote for the National Front in the first round Sunday — almost 5 percent more than in 2012.
With just days to go, polls show the race is tightening. Centrist Emmanuel Macron is edging his way ahead on 24 percent and Le Pen is a fraction behind on 22.5 percent, according to Bloomberg polling.
Just below them, hard-left candidate Jean-Luc Melenchon has enjoyed a late surge and scandal-hit conservative Francois Fillon has hung in there despite a slew of allegations that he paid thousands of euros to his British-born wife for assistance she allegedly did not provide. A third of voters remain undecided.
The FN’s ability to motivate French women could be decisive. Traditionally, it has struggled to attract female voters amid accusations of sexism, racism and anti-Semitism.
In its early years under Jean-Marie Le Pen, the party advocated a traditional image of women, opposed abortion rights and developed a reputation for a macho, strongman culture.
This bias showed. The FN was far less successful at attracting women than men. During Jean-Marie Le Pen’ time in charge, around 12 percent of French women supported the party compared with 17 percent of men, according toSciences Po Cevipof, a political institute based in Paris.
Marine Le Pen changed this.
Since taking over in 2011, she has softened the party’s image, steering the FN away from some of its overtly anti-Semitic and racist rhetoric in an effort to broaden its electoral base. In 2015, she expelled her father after he repeated his view that the Holocaust was a “detail of history.”
In the run up to the this year’s election, Le Pen dropped her last name from campaign handouts, referring to herself simply as Marine.
More recently, she specifically targeted the female vote. She has published special pamphlets and a campaign video that describes her as a woman and a mother and shows her flicking through family photo albums. She has also changed the party’s logo from a flame to a blue rose.
For Troin, the children’s clothes seller in Cogolin, her interest in the National Front has grown with Marine Le Pen’s rise. While immigration, job security and her fear of Islam remained underlying motivators, she was also attracted to the party’s re-brand.
For her, the former leader “was too outspoken, too offensive. He was a Hitler-like figure,” Troin said. “But Marine is different.”
In the last presidential election in 2012 — the first with Marine Le Pen as leader — the party’s gender gap closed to 1.5 percentage points. It’s what Cevipof professor and FN expert Nonna Mayer called the “Marine Le Pen effect.”
The party has long advocated clamping down on immigration and securing borders, and throughout her campaign Le Pen has consistently made the country’s Muslims a target.
“In France we respect women, we don’t beat them, we don’t ask them to hide themselves behind a veil as if they were impure. We drink wine when we want, we can criticize religion and speak freely,” she said during a rally Monday night, comments clearly aimed at Muslims.
During the rally, Le Pen pledged to suspend all visas from non-European migrants hoping to join their families in France — often code for immigrants from mainly Muslim North Africa and the Middle East.
After Thursday night’s attack in Paris, she again singled out what she sees as the threat posed by Islam.
“It is a war in which there can be no retreat because all our population and all our territory are exposed,” she said.
And for all her rebranding, Marine Le Pen can also fall back into the older, harsher style of messaging.
Cathy, a 50-year-old dental assistant who was shopping for groceries in Cogolin, said she was all set to vote FN but was taken aback by Le Pen’s recent comments that the French were not to blame for the anti-Jewish policies of the government during the Nazi occupation in World War II.
Referring to the “Vel d’Hiv” roundup of Jews by French police in July 1942, in which nearly 13,000 were detained and deported to concentration camps, Le Pen told French radio earlier this month she thought France was “not responsible.”
Cathy, who didn’t want to be identified by her second name, said Le Pen’s remarks had made her pause.
“Perhaps she has the same ideas as her father but they’re just hidden behind good PR skills,” she said. “So I’m still thinking.”
Others needed no time to reflect.
“The FN is xenophobic, racist and anti-feminist,” said retired teacher Mireille Escarrat. “For me it feels like the 1930s. We’re going backwards.”
‘I don’t talk politics here’
Many of the National Front supporters interviewed by NBC News were reluctant to admit it, and others were concerned about being named.
“I don’t talk politics here,” a local woman said, having led the way into a backroom of her business in the town. The 60-year-old asked not to be named or for her business to be described because she felt that admitting her loyalty to the FN would damage her reputation.
“I wouldn’t mind if it weren’t for my business,” she added, out of earshot of her customers. “But this is somewhere everyone can come whether you vote communist or for the right.”
Even in this town — where 53 percent of the population voted FN in 2014 — voting Le Pen still carries a social stigma. There’s no telling just how many closet female FN voters there may be.
The party’s marriage of socialist economic policy and right-wing identity politics is working in the town, which sits in the FN’s traditional southern heartland. With the decline of traditional industries and unemployment at 18 percent, locals worry Cogolin is being reduced to a seasonal economy dependent on rich resort communities.
Newly-converted women at the FN’s regional headquarters in neighboring Sainte-Maxime said Sunday’s election would be the first time they voted for the Front in a presidential race.
“We didn’t vote for Jean-Marie Le Pen because he scared us,” said Monique Guckert, 67, a retired shop assistant. “His ideas were too fascist, too racist. It was too much.”
Even the FN mayor of Cogolin, Marc Etienne Lansade, admitted his mother would never have voted for Jean-Marie Le Pen.
“He drove her crazy,” he said. “Women understand Marine Le Pen, she’s divorced, she has three children, she works — she’s a modern woman,” he added, sitting in his second-floor office in the town hall.
Still, not all women appreciate Le Pen’s message. On Monday, a topless protester carrying flowers charged the candidate during a rally northern Paris.
Le Pen does not try to make out that she is a feminist. Of her 144 manifesto pledges, only one addresses women’s issues. In it, she promises to defend women’s rights by fighting against Islam, implementing a plan for equal pay and combating social and job insecurity.
“She’s a fake feminist,” said Camille Froidevaux-Metterie, a political scientist and expert on women in politics at the University of Reims.
Asked if a Le Pen win would be a victory for women, she said that though symbolically “it would not be nothing.” She said it would mean France is ready for a female president but would have elected one on a non-feminist agenda.
Centrist Emmanuel Macron’s lead in France’s presidential election has narrowed though he is still on course to win, two polls casting light on voter intentions following a televised debate between candidates showed.
Macron would win 25 percent of the April 23 first round vote while far right leader Marine Le Pen was seen getting 24 percent, according to a Harris Interactive poll for France Televisions published on Thursday.
Both of their scores were down a percentage point from the last time the poll was conducted on March 23, though they would still comfortably make it into the May 7 runoff.
There Macron was seen winning the presidency 62 percent to Le Pen’s 38 percent, a margin that was down from 65 percent to 35 percent two weeks ago.
The poll was partly taken after Tuesday’s four-hour debate, the second during the campaign, but the first to include all 11 candidates and which saw Le Pen put on the defensive from all sides.
With a second solid performance thanks to his sharp wit, hard-left candidate Jean-Luc Melenchon marked further poll gains, nearly catching up with erstwhile favorite Francois Fillon, a conservative former prime minister.
Melenchon’s score climbed to 17 percent in the first round from 13.5 percent two weeks ago while Fillon, whose campaign has struggled as he faced nepotism allegations, saw his score hold steady at 18 percent.
Emmanuel Macron and Marine Le Pen.Reuters
The results in the Harris poll closely mirrored those in an Elabe poll for BFM TV published late on Wednesday and conducted in full after the debate.
That showed Macron’s first round vote at 23.5 percent, his lowest score in a month and down from 25.5 percent the last time the poll was conducted on March 28-29. Le Pen was also seen at 23.5 percent, down from 24 percent.
Elabe forecast Macron to win the runoff with 62 percent to 38 percent for Le Pen.
Story 3: Trump Administration Rolls Out New Tax Reform Plan and House Votes On Repeal and Replace Compromise Bill — By Day 100 — American People Want The FairTax And Full Repeal of Obamacare and Republican Establishment Wants Partial Repeal of Obamacare and Border Adjustment Tax — Stupid Party? — Video
OMB Director Mulvaney on Tax Plan, Trump’s Priorities
Trump In First 100 Days is DESPERATE For a WIN, “Government SHUTDOWN Is Not A Win”
President Trump :Tax Reform Plan Coming Very Soon – Cavuto
FairTax: Fire Up Our Economic Engine (Official HD)
Freedom from the IRS! – FairTax Explained in Detail
Pence on the Fair Tax
Is America’s Tax System Fair?
What’s Killing the American Dream?
The Trump Effect
JANUARY 2017BY: JOHN HILTON
The Trump Effect
Feeling relieved? You’re not alone in the financial services industry as 2017 dawns with pro-business Republicans controlling Congress and the White House.
That doesn’t mean agents and advisors can relax and ignore what is going on in Washington. President-elect Donald Trump and lawmakers have an agenda that will affect the insurance world in many ways.
How? Let’s look at what is at stake:
Taxes: House Speaker Paul Ryan is determined to push tax reform and he may have his best opportunity. The result would be a significant tax reduction for investors. But can he and Trump come to an agreement?
Fiduciary Rule: Trump has not commented on the Department of Labor rule specifically, but his surrogates have said he is opposed. The path to killing the rule is a little more complicated, but a delay is likely.
Regulation: Other significant regulations promoted by the Obama administration — from the Dodd-Frank Act to DOL overtime rules — are certain to be gutted or killed. In 2012, Trump wrote that “government regulations cost us annually $1.75 trillion. They constitute a stealth tax that is larger than the amount the IRS collects every year.”
ACA: The president-elect said repeatedly on the campaign trail that he would eliminate Obama’s signature health care program. But the practical implications of doing so are not insignificant. What can Republicans realistically accomplish?
Editor’s note: After assessing the issues and variables affecting them, the InsuranceNewsNet editorial team came up with odds that successful reform will result.
THE TIME FOR TAX REFORM?
This is Ryan’s hope, the one issue he has longed to see to completion. With a like-party president and a Senate majority, tax reform should be a slam dunk. Yet, it isn’t.
Comprehensive tax reform is “still a tough, tough nut,” said Michael Lewan, longtime Democratic strategist. “Think about it: We haven’t had significant tax reform since the early days of the Bush administration. Speaker Ryan and Donald Trump are going to have to fashion a coalition of Democrats to get any type of meaningful tax reform done.”
Then there is the personality clash between Trump and Ryan, who refused for months to explicitly endorse the president-elect. Will those hard feelings be left in the past once the curtain comes down on inauguration festivities?
For sure, there is ample promise for harmony between the Speaker and the White House since the two leaders share similar tax-cut plans.
Both would slash the top income tax rate from 39.6 percent to 33 percent. Both would reduce taxes on corporations, in largely similar ways.
Ryan’s entire tax philosophy represents a move away from simply slashing the top income tax rate. Instead, the GOP is focusing on targeted tax cuts and exclusions to benefit high earners with investment income.
The Ryan plan drastically slashes taxes on both corporate income and income from capital gains, dividends and interest. Likewise, it cuts the corporate income tax to 20 percent, and allows taxpayers to exclude 50 percent of their net capital gains, dividends and interest income.
Some of those changes will make many in the insurance industry happy, but they might also be disappointed by the Ryan/Trump treatment of the estate tax. Trump supports full repeal and Ryan voted for the Death Tax Repeal Act of 2015.
The estate tax has an 80 percent probability of being repealed by Trump and the Republican Congress, said Ken Kies, managing director of The Federal Policy Group, a Beltway lobbying firm.
“Our best opportunity to stop this is to convince the Republican leadership that having Trump sign on to an estate tax repeal — something that would benefit his family — would be a disaster from a public relations standpoint,” he said.
Kies predicted that Trump’s top priority would be what he called “one big budget deal” that would encompass repeal of the Affordable Care Act, an infrastructure program and tax reform. “And we think that will be done by the August recess,” he said.
The incoming treasury secretary, Steve Mnuchin, promised 3 to 4 percent growth. The Trump plan to encourage repatriation of the estimated $1 trillion that large U.S. corporations hold in foreign subsidiaries will help offset the loss of revenue, Mnuchin said.
Trump has proposed a special 10 percent rate on overseas funds the companies shift back to the U.S.
Odds of a Tax reform bill: 60%
IS THE FIDUCIARY RULE TOAST?
Trump did not mention the DOL fiduciary rule during the campaign, but Anthony Scaramucci, his top Wall Street advisor, assured the industry that the president-elect will work to defeat it. This is one issue where Trump and Ryan will find agreement.
The Speaker is the top lawmaker to speak out against the DOL rule, which was published in April 2016 and is scheduled to begin taking effect on April 10.
Since the rule is already on the books, however, getting rid of it will not be easy. The simplest thing Trump can do is delay the rule while the administration develops a long-term strategy for it.
“What are Trump’s priorities going to be?” said Scott Kallenbach, research director for LIMRA’s strategic research. “He’s got a lot up in the air right now. You’re seeing stories that he’s going to focus on Dodd-Frank and Obamacare, tax reform, immigration reform, the Iranian nuclear deal. So I think it’s a matter of where does the DOL fit in this list?”
Permanent repeal of the rule, which holds anyone working with retirement funds to a “best interest” standard, can happen three ways:
» Lawsuits. As of early December, opponents were 0-2 via the lawsuit route, with federal judges in the District of Columbia and Kansas rejecting plaintiffs’ requests for a preliminary injunction.
That is not as bad as it sounds. After all, opponents need only to win one case out of the four to cripple the rule, whereas the government needs to win every case.
A third lawsuit filed in Northern District of Texas court appears to be the strongest opposition case. The district, as well as its appeals circuit court, is known for being tough on government agencies. Judge Barbara M.G. Lynn heard the case Nov. 17 in Dallas. A group of plaintiffs are led by the U.S. Chamber of Commerce.
» Legislation. The House Financial Services Committee has legislation ready to go, gutting both the fiduciary rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The Financial CHOICE Act would block the DOL from implementing its fiduciary rule by incorporating it into the Retail Investor Protection Act, which passed the House last year.
Introduced by Rep. Ann Wagner, R-Mo., the RIPA requires the Securities and Exchange Commission to move first on fiduciary rulemaking before the DOL can act.
The bill eliminates several Dodd-Frank provisions, including federal “bailouts” and the Volcker Rule, which restricts trading activities at banks.
Under CHOICE — which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs — the Financial Stability Oversight Council would no longer be able to designate risky non-banks and others as “systemically important financial institutions.”
The FSOC was created by Dodd-Frank to review the systemic risk to the capital markets presented by large, global financial institutions. MetLife has fought the designation, which was considered one of the reasons the company shed its advisor unit.
The FSOC’s authority to break up a large financial institution if the Federal Reserve finds that the firm “poses a grave threat to the financial stability of the United States” would also disappear if the bill is passed.
The bill would also require the Consumer Financial Protection Bureau to be subject to bipartisan oversight and congressional appropriations.
The legislation route will be messy, particularly if Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., opt to filibuster and rally public opinion against the measure. Republicans may not want to spend valuable political capital on such an effort. And that leaves:
» Regulation. Perhaps the most effective route to terminate the fiduciary rule would be for Trump’s new labor secretary to suspend the rule while the agency crafts a new one.
That would mean following the exhaustive process of public notice, supporting studies, public hearings and publication. But it would get rid of the rule without having to rely on getting a set number of votes.
The incoming secretary of labor could direct the agency not to spend any resources to enforce the fiduciary rule. However, that would have no impact on the most severe aspect of the rule: the litigation exposure. Now that the rule is published, if it takes effect on April 10, advisors will be vulnerable to private lawsuits.
Odds of fiduciary rule reform or removal: 75%
INDUSTRY IN FLUX
Trump and the Republicans may have dominated on Election Day, and the DOL rule may well be doomed.
But Main Street advisors such as Taylor Sledge say they need to keep planning for a fiduciary world.
For Sledge, founder of Sledge & Co. in Madison, Miss., that means getting additional licenses and spending more time on compliance issues. The 29-year-old Sledge offers a full array of financial planning services and said his small firm needs to be prepared for whatever regulations come from Washington.
“We take what we are dealing with and we try to use it as positively as possible, but it is not something that I am choosing to view as a hurdle,” he said. “It is a challenge that I will choose to view as an opportunity.”
Even if the DOL rule eventually disappears, the Securities and Exchange Commission is working on its version of a fiduciary standard as well. While the SEC is mired in political squabbling and has two vacant seats, many in the industry feel the agency should take the lead in developing a fiduciary rule.
SEC Chairwoman Mary Jo White has said its fiduciary version is not close to completion. White announced she will resign and forgo the final two years of her term. That means Trump can fill three vacancies and short-circuit any regulation the SEC has in the works.
Still, uncertainty remains, said Howard Schneider, founder and president of the consulting firm Practical Perspectives, Boxford, Mass.
“As we’ve seen with so many things, there’s a lack of clarity with what that policy is going to be as there’s been no stand taken on the DOL fiduciary rule issues yet,” he said weeks after the election.
“Advisors proceed with plans to implement the rule and what changes that means to their home offices and advisor offices, but at the same time the rule might never be implemented, or implemented in a very different way than people anticipated.”
Eszylfie Taylor, president of Taylor Insurance and Financial Services, Pasadena, Calif., has a foot in both worlds as a commission- and fee-based financial advisor.
The DOL rule might be more impactful, but is not much different from many other regulations that constantly change. The advisor world is best focused on making the best of whatever happens, he said.
“Everyone will need insurance, everyone needs estate planning, everyone needs advice,” Taylor said. “No matter what the DOL says, everyone has to plan for retirement. So at the end of the day there’s always a need for the work that we do and there will always be a way to work within the rule to help our clients.”
Should the rule be abolished, “the annuities and commission-based products agents will be pretty ecstatic, I would think,” he said.
But it’s hard to predict anything in the financial services world, he added. Those who predicted a market crash upon Trump’s election were stunned when the opposite happened, Taylor noted.
WILL THE OVERTIME RULE BE FIRED?
Employers gained a bit of clarity in late November when a Texas judge granted a preliminary injunction freezing the Department of Labor overtime rule.
Judge Amos Mazzant of the Eastern District of Texas granted a preliminary injunction to 21 state plaintiffs, led by Nevada. The rule affects an estimated 4.2 million workers who were to be newly eligible for time-and-a-half wages for each hour they worked beyond 40 each week.
The rule would roughly double the $23,660 threshold at which executive, administrative and professional employees are exempt from overtime. The DOL estimates the new rule would affect more than 4 million workers, and 19 percent of all insurance industry workers.
Mazzant ruled that the plaintiffs proved both the likelihood of winning a court case, and irreparable financial harm — two key standards often difficult to achieve to gain an injunction.
The Labor Department could seek an expedited appeal to get the law free of the courts during President Barack Obama’s final weeks. Or the agency could drop the appeal after Republican President-elect Donald Trump takes office Jan. 20.
The DOL has strong grounds for an appeal, said lawyer Erin M. Sweeney of Miller & Chevalier in Washington, D.C., but it might not matter.
“Even with an expedited appeal, it will be the Trump administration that will have the final word,” she added via email.
In August, Trump cited the overtime rule as an example of the type of burdensome business regulations he would seek to roll back as president.
Employment lawyer Don Phin said the insurance industry isn’t the focus of the law. But that doesn’t mean the industry wouldn’t be affected in a significant way. Agencies would need to know the new rules on who is considered exempt because they are considered “administrative,” for example.
Reached after the decision, Phin said it wasn’t “totally surprising” given the opposition and the court venue. He also agreed the overtime rule looks to be dead.
“At the minimum they know they can drag things out to next term and give the Trump administration an opportunity to change the regs,” he said.
Odds of an Overtime Rule Appeal: 90%
PULLING THE PLUG ON THE AFFORDABLE CARE ACT?
The centerpiece of the campaign, and the issue that analysts agree drove much of voter anger, was the Affordable Care Act. Trump vowed to repeal the legislation, and that puts him in complete agreement with GOP leadership in Congress.
As of early December, GOP leaders were touting a plan to repeal the ACA without a replacement. That could give Trump an easy campaign promise to fulfill as early as his first day in office.
But what would the eventual replacement legislation look like?
The president-elect named House Republican Rep. Tom Price of Georgia as his secretary of Health and Human Services. Price helped craft a House GOP plan on health care that was unveiled over the summer, relying on individual tax credits to allow people to buy coverage from private insurers.
The proposal fell far short of a full-scale replacement, leaving key questions unanswered including the size of the tax credits, the overall price tag of the plan, and how many people would be covered.
Since the election, Trump has endorsed keeping certain popular parts of Obamacare, including a provision barring insurers from excluding people with pre-existing conditions from coverage, and another allowing young adults to stay on their parents’ health plans. Ryan endorsed keeping those parts of the law.
But Democrats insist there’s no way to keep the popular parts of the law without the elements people don’t like, including requirements for individuals to carry coverage or face tax penalties.
Insurers have said they can only extend coverage to people with pre-existing conditions by having large groups of customers, including healthy people who don’t cost as much to insure. Carriers would likely raise rates on the riskiest customers, assuming they would be allowed to adjust rates.
Losing the requirement that individuals buy health insurance and a potential loss of subsidies could throw the market into turmoil, according to Marcy Buckner, National Association of Health Underwriters vice president of government affairs.
NAHU is working with Trump’s transition team and favors an approach that would keep consumer costs down while ensuring the marketplace is stable.
“The worst outcome in this would be that subsidies would be repealed,” Buckner said. “This would lead to everybody but the sickest Americans leaving the marketplace and put the marketplace into a death spiral.”
Any changes to the ACA will be modest and will be implemented over a period of time, said Susan Combs, founder and head of Combs & Co., an insurance brokerage firm based in New York City.
“Remember that the GOP needs a supermajority and all 52 GOP and 8 Dems would have to vote on it, and I don’t think they can get it,” she said.
As far as agents are concerned, “we were needed before the ACA, during the transition to the ACA and, yes, we’ll be needed during any changes that will come to the ACA,” Combs added.
The different provisions of the ACA have many tentacles, which makes repealing or changing them a challenge, said Ronnell Nolan, president and CEO of Health Agents for America.
Any changes made to the ACA need to address consumer affordability, Nolan said.
“Until affordability is addressed, consumers can’t afford the coverage and we have nothing to sell them,” she said.
Agent commissions also must be addressed as part of health care reform, Nolan said.
“Commissions could be mandated as they are with Medicare Advantage. Or we could have some kind of a fair compensation act. The biggest issue is going back to affordability — insurance companies saying if they’re not making a profit, they aren’t paying a commission.”
Health care reform needs to start with bringing the right people to the table, Nolan said.
“In passing the original ACA, they didn’t bring the doctors or the insurance companies or the agents to the table,” she said. “I think they will do that differently this time.”
A change to the unlimited maximum benefits is one under-the-radar ACA reform that can give insurance companies relief, said Ryan Siemers, principal with Aegis Risk, a health care consulting firm in Alexandria, Va.
The ACA prohibits setting lifetime limits on benefits in any health plan or insurance policy.
Before the ACA, individual medical expenses would hit the $1 million benefit cap that the employer had in the plan and the claimant would go to Medicaid or become a ward of the state, Siemers explained.
Hospitals and pharmaceutical companies have benefited from the removal of caps, he added, making it difficult to amend that aspect of the ACA.
“There are some deep-pocketed interests in the health care world that would work to stop any move to alter unlimited lifetime benefits,” Siemers said.
From 1992 to 1997, Mulvaney practiced law with the firm James, McElroy & Diehl. Mulvaney joined his family’s homebuilding and real estate business. He participated in the Owners and Presidents Management Program at Harvard Business School. He was a minority shareholder and owner-operator in Salsarita’s Fresh Cantina, a privately held regional restaurant chain.
In 2008 an unexpected retirement created a vacancy in the South Carolina Senate and he campaigned for and won that office in what was widely regarded to be the hardest fought legislative race in South Carolina that year.
While in the State Senate, Mulvaney served on the Judiciary, Labor/Commerce/Industry, Medical Affairs, Agriculture/Natural Resources, and Corrections Committees. The Palmetto Family Council identified him as the Freshman Legislator of the Year in 2006 for his work on the South Carolina ultrasound bill.
In 2010 he was named Legislator of the Year for his work in support of the State’s Emergency Medical Services (EMS). He has received one of the few A+ ratings in the entire legislature from the South Carolina Club for Growth.
Mulvaney, a GOP Young Gun, ran against Democratic incumbent John Spratt for South Carolina’s 5th congressional district. The race was highlighted by Mitt Romney‘s Free and Strong America PAC’s “Take Congress Back: 10 in ’10” initiative as one of the top 10 House challenger races. Mulvaney’s involvement in the now defunct Edenmoor real estate development in Lancaster County, South Carolina became a campaign issue, with Mulvaney’s opponents alleging that he misled the Lancaster County council and taxpayers to provide $30 million in public funding for the real estate development and that once the public funds had been approved, Mulvaney sold his interest in the development to a third party at a $7 million profit. Mulvaney denied the allegations and said that the project’s failure was due to Democratic economic policies. He defeated Spratt, who had held the seat since 1983, with 55% of the vote.
According to the New York Times, Mulvaney took “a hard line on spending during President Obama’s term, vowing not to raise the nation’s debt limit and embracing the term ‘Shutdown Caucus’ because of his willingness to shut the government down instead.” In 2015, Mulvaney voted against a government-funding resolution, which would have prevented a government shutdown, in part because it included funding for Planned Parenthood. Explaining his vote, Mulvaney said, “This is not about women’s health. It’s about trafficking in pieces of dead children.”
Mulvaney supported the Regulatory Improvement Act of 2015, which would have “[created] a commission tasked with eliminating and revising outdated and redundant federal regulations.” According to Andrew Rosenberg, director of the Center for Science and Democracy at UCS, legislation of this kind can be “a smokescreen used to block policy measures protecting public health and the environment.”
Fiscal year 2014 budget
On December 10, 2013, Republican Representative Paul Ryan and Democratic Senator Patty Murray announced that they had negotiated the Bipartisan Budget Act of 2013, a proposed two-year budget deal.The budget deal would cap the federal government’s spending for Fiscal Year 2014 at $1.012 trillion and for Fiscal Year 2015 at $1.014.
The proposed deal would eliminate some of the spending cuts required by the sequester by $45 billion of the cuts scheduled to happen in January and $18 billion of the cuts scheduled to happen in 2015. This does not decrease federal spending; instead, by reducing the amount of spending cuts the government was going to be forced to make by the sequester, it actually increases government spending by $45 billion and $18 billion over what would have been spent had the sequester remained in place. Some Republicans wanted Speaker Boehner to pursue a temporary measure that would cover the rest of Fiscal Year 2014 at the level set by the sequester – $967 billion, rather than pass this budget deal, which would have $45 billion in additional spending.
The deal is supposed to make up for this increase in spending by raising airline fees and changing the pension contribution requirements of new federal workers. According to The Hill, Mulvaney is “spearheading opposition to the new budget bill”. He did not blame Ryan for the budget deal, instead saying that the problem was too few conservatives had been elected to Congress to pass a budget with a greater focus on debt reduction. Mulvaney said that he expected the budget deal to pass because “it was designed to get the support of defense hawks and appropriators and Democrats”, not conservatives.
On April 9, 2014, Mulvaney offered a proposal based on the Obama proposal as a substitute amendment in order to force a vote on the President’s budget request. The President’s proposal failed in a vote of 2–413, although Democrats were urged by their leadership to vote against this “political stunt.”
Mulvaney speaking at a campaign event for Senator Rand Paul in Spartanburg, South Carolina in September 2015.
In his statement to the Senate Budget Committee, Mulvaney admitted that he had failed to pay $15,000 in payroll taxes from 2000-04 for a nanny he had hired to care for his triplets. Mulvaney said he did not pay the taxes because he viewed the woman as a babysitter rather than as a household employee. After filling out a questionnaire from the Trump transition team, he realized the lapse and began the process of paying back taxes and fees. Senate Democrats noted that Republicans had previously insisted that past Democratic nominees’ failure to pay taxes for their household employees was disqualifying, including former Health and Human Services nominee Tom Daschle in 2009.
On February 16, 2017, the Senate confirmed Mulvaney, 51–49. Every Democratic Senator as well as John McCain voted against his nomination. McCain cited Mulvaney’s prior votes to cut the military budget as the reason for his vote 
In March 2017, Mulvaney stated that he believed that “the Obama administration was manipulating the numbers, in terms of the number of people in the workforce, to make the unemployment rate — that percentage rate — look smaller than it actually was,” and that “[w]hat you should really look at is the number of jobs created.” Some outlets have reported that there is no evidence that jobs numbers under the Obama administration were manipulated.FiveThirtyEight‘s Ben Casselman noted that “manipulating the jobs figures… would mean not just messing with one number but rather interfering with an entire ecosystem of statistics.”
In March 2017, Mulvaney stated that the Congressional Budget Office was not capable of assessing the American Health Care Act (the GOP’s replacement plan for the Affordable Care Act), stating that “[i]f the CBO was right about Obamacare to begin with, there’d be 8 million more people on Obamacare today than there actually are.” Others have disagreed with Mulvaney’s statement, including FactCheck.Org, which stated that “[t]he CBO actually nailed the overall impact of the law on the uninsured pretty closely.”
Whilst promoting the Trump administration’s budget proposal in March 2017, Mulvaney stated that, as to taxpayers, the government was “not gonna ask you for your hard-earned money, anymore… unless we can guarantee to you that that money is actually being used in a proper function.” For instance, Mulvaney justified cuts to block grants that go towards spending on Meals on Wheels because it was “just not showing any results.” Others disagree with Mulvaney’s statement, citing research that has “found home-delivered meal programs to significantly improve diet quality, increase nutrient intakes, and reduce food insecurity and nutritional risk among participants. Other beneficial outcomes include increased socialization opportunities, improvement in dietary adherence, and higher quality of life.”
Story 1: Will President Trump Boldly Cut Taxes and Spending? — A Competitive Race Towards Lower Taxes And Less Government Spending: Replace All Income Based Taxes (All Income, Capital Gain and Payroll Taxes) With Broad-Based Consumption Tax With Generous Tax Prebate ( FairTax or Fair Tax Less!) And Real Cuts of 5% Per Year In Government Spending To Balance The Budget In 8 Years Or Less To Pay For Tax Cuts!) — Cut Taxes and Spending — Videos —
Donald Trump: Simplify the Tax Code
Donald Trump: I pay as little as possible in taxes
Is Donald Trump serious about tax reform?
Sean Spicer: Trump wants to get tax reform right
Will tax reform really happen by August?
Dan Mitchell Discussing GOP Tax Plan and Corporate Rate Reduction
What Tax Reform Could Look Like Under Donald Trump | Squawk Box | CNBC
#Eakinomics – 4 Key Questions on Dynamic Scoring
What is Dynamic Scoring?
Trump Pushes ‘Major Border Tax’ to Keep Jobs in U.S.
Ryan Unexpectedly Joins Forces With Bannon on Border Tax
Kudlow: Freedom Caucus & Trump’s base is opposed to Border Adjustment Tax
Sen. Perdue: Border Adjustment Tax would “shutdown economic growth”
Sen. Tom Cotton: “I have serious concerns” w/ Border Adjustment Tax
Americans Need a Progressive Consumption Tax
Sen. Strange: “I would not” vote for a Border Adjustment Tax
Milton Friedman – Why Tax Reform Is Impossible
Milton Friedman – Is tax reform possible?
CNBC: Steve Forbes on Border Adjustment Tax – “Don’t Do It” 2.8.17
Meg Whitman: Border Adjustment Tax Will Not Create Jobs | CNBC
Art Laffer: Border tax is a major mistake
Border Tax Fight Is Economists Vs. Everybody Else | Squawk Box | CNBC
Dan Mitchell Discussing GOP Tax Plan and Corporate Rate Reduction
What is a Border Adjustment?
Border Tax: What You Need to Know
Will a border adjustment tax help American businesses?
Will a border adjustment tax kill free trade?
Border adjustment tax political suicide?
Fox Pol:l 73% Want Tax Reform This Year – Cavuto
Could the border tax debate stall tax reform?
Is A Border Adjustment Tax A Good Idea?
Border Adjustment Tax: Trump’s MAGA Ace
President Donald Trump Begins First Week By Meeting With Top Business Leaders | NBC News
Dan Mitchell Fretting about GOP Border-Adjustable Tax Plan
FairTax: Fire Up Our Economic Engine (Official HD)
Pence on the Fair Tax
Freedom from the IRS! – FairTax Explained in Details
The FairTax: It’s Time
Dan Mitchell explains the fair tax
Six Reasons Why the Capital Gains Tax Should Be Abolished
Is America’s Tax System Fair?
Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor
What’s Killing the American Dream?
Robert Wolf: Border adjustment not going to happen
PUBLISHED: 02:20 EDT, 10 April 2017 | UPDATED: 10:56 EDT, 10 April 2017
President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.
The administration’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.
Some view the search for new options as a result of Trump’s refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
Administration officials say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.
Off plan: Donald Trump is abandoning the tax overhaul he campaigned on
Tough deadline: Steven Mnuchin, the Treasury Secretary who was at the table when Trump was briefed on the Syria missile strikes, had set an the August deadline for tax reform
But the ambitious pace to figure out a plan reflects Trump’s haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.
The White House is trying to learn the lessons from health care. Rather than accepting a bill written by the lawmakers, White House officials are taking a more active role.
Administration officials have signaled that they want to pass tax legislation with only Republican votes, yet they’ve also held listening sessions with House Democrats.
White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live.
But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.
Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.
Brady, a Republican from Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise $1 trillion over 10 years that could fund lower corporate tax rates.
But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules.
Brady has said he intends to amend the blueprint but has not spelled out how he would do so.
Other options are being shopped on Capitol Hill.
One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.
The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses.
This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates.
Those additional revenues could then enable the end of the 12.4 percent payroll tax, split evenly between employers and employees, that funds Social Security, while keeping the health insurance payroll tax in place.
This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to the lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.
Although some billed this as a bipartisan solution, and President Barack Obama did temporarily cut the payroll tax after the Great Recession, others note it probably would run into firm opposition from Democrats who are loathe to be seen as undermining Social Security.
The White House would not comment on the plan, but said a value-added tax based on consumption is not under consideration ‘as of now,’ according to a White House statement.
The lack of detail about how to significantly rewrite tax laws for the first time in 30 years may provide Trump some time to build consensus among Republicans. But without Trump laying down his hand, lawmakers appear reluctant to back a plan that will likely stir controversy.
How will markets react? Stocks rallied after the election on the promise of lower taxes and fewer regulations, but the Dow has dipped 1.2 percent over the past month
Stock markets take a hit after Trump’s healthcare defeat
‘Because there are trade-offs, congressmen need cover from the president to withstand the lobbyists and constituents who are going to complain,’ said Bill Gale, an economist at the Brookings Institution who worked at the White House Council of Economic Advisers during President George H.W. Bush’s administration.
The Trump administration appears to have shut out the economists who helped assemble one of his campaign’s tax overhaul plans, which independent analyses show would have increased the budget deficit.
‘It’s a little frustrating that they feel they have to write a new tax plan when they have a tax plan,’ said Steven Moore, an economist at the conservative Heritage Foundation who helped formulate tax policy for the Trump campaign.
Rob Portman, the Republican senator from Ohio, a member of the Senate Finance Committee, said that all of the trial balloons surfacing in public don’t represent the work that’s being done behind the scenes.
‘It’s not really what’s going on,’ Portman said. ‘What’s going on is they’re working with on various ideas.’
Investors are beginning to show some doubts that Trump can deliver. Stocks rallied after his election on the promise of lower taxes and fewer regulations, but the Dow Jones Industrial Average has dipped 1.2 percent over the past month as the path for health care and tax revisions has become muddied.
‘The White House is going to need its own clear direction, or it’s going to need to defer to Congress, but saying that your plan is forthcoming and then not producing a plan kind of puts everything in stasis,’ said Alan Cole, an economist at the conservative Tax Foundation.
The BAT is a bad idea. There are far better ways to shrink the federal budget deficit.
By GENE EPSTEIN
March 18, 2017
“Anytime I hear border adjustment, I don’t love it,” Donald Trump told The Wall Street Journal shortly before his inauguration, noting that the proposed border adjustment tax was “too complicated.”
Trump isn’t always right when he makes off-the-cuff remarks such as that, but this time he was. The proposed border adjustment tax is so complicated that even its advocates can’t agree on how its disruptive effects on the U.S. economy will play out, and there’s nothing to love about that. The BAT is a bad idea, and it should be scrapped. And while taking it off the table will bring more red ink to the federal budget, there are better ways to stanch the bleeding than subjecting the economy to the trauma of a BAT.
Despite protestations to the contrary, the border adjustment levy is a tax hike embedded in the program of tax reductions that House Republicans put forward last June under the rubric of “A Better Way.” It’s there, presumably, to help offset the effect of the administration’s planned cuts, since the Republicans’ stated aim is to keep those cuts revenue-neutral. Barron’s fully supports the goal of not adding to deficits that, before too long, will be running above $1 trillion a year, given repeated warnings from the nonpartisan Congressional Budget Office about the risk of a financial crisis, due to exploding debt.
The attraction of a BAT is that it could generate an estimated $100 billion a year in revenue. There may be reasons to challenge that estimate, but we’ll accept it for now. There are, however, better ways to slash the fiscal deficit by $100 billion a year than the Better Way plan, and most fall under the heading of spending cuts.
President Trump has spoken about “waste, fraud, and abuse” in “every agency” of the federal government. Indeed, he promised that “we will cut so much, your head will spin.” He should therefore find plenty to love in our proposed reductions in spending. Just for starters, if all corporate welfare were cut from the budget, as much as $100 billion a year could be saved, about matching the total expected from the BAT.
The president also favors slashing the top rate on corporate income to 15% from 35%. Barron’s has proposed a more modest cut, to 22% (“Cut the Top U.S. Corporate Tax Rate to 22%,” Nov. 26, 2016). The Republican package calls for a reduction to 20%, which is close enough to our original proposal and which we believe should boost revenue rather than shrink it.
A list of potential cuts and revenue enhancements, totaling $200 billion, is in the table at the bottom of this page.
THE BETTER WAY PLAN, as noted, would reduce the top federal tax rate on corporate profits to 20% from 35%—which is all to the good. The proposed tax cut would not only be revenue-neutral; it would probably be revenue-enhancing.
In a study released this month by the London-based Centre for Policy Studies, analyst Daniel Mahoney traces the effect on revenue from Britain’s cuts in the corporate tax rate over a 34-year period. According to his calculations, the take from the corporate tax has added three-tenths of a percentage point annually to gross domestic product since rates were slashed.
Similarly, last year, in calling for a maximum U.S. rate of 22%, we traced the significant decline in the average top rate on corporate income for 19 countries in the Organization for Economic Cooperation and Development, which includes the U.S. and the United Kingdom. Over 33 years, their average tax take as a share of GDP rose six-tenths of a percentage point.
While that might not sound like much, every tenth of a percentage point of U.S. nominal GDP is worth $18.9 billion. So if revenue from the corporate tax rises by, say, three-tenths of a percentage point, to 2.5%—a conservative guess—that increase would translate into a bonus of nearly $57 billion a year in revenue. That alone gets us more than halfway to the $100 billion value of a BAT.
The idea of a revenue-enhancing cut in the corporate income tax was put forward in 1978, when economist Arthur Laffer was first cited as arguing that some rate decreases could generate enough added economic growth that the government wouldn’t lose revenue over the long run—and might, in fact, even gain revenue. Laffer also noted that most tax hikes generate less revenue than a conventional “static” analysis indicates, and that most tax cuts lose less.
Laffer’s “dynamic” analysis covered all of the behavioral changes likely to result from a cut. To begin with, if the tax collector claims a lower share of income, there is an incentive to produce more income. Second, a lower rate means there’s less incentive to spend time and effort avoiding the tax.
Corporations don’t pay taxes; only people do. And there is a tendency to forget that if a corporation nets more profits as a result of a lower tax, those funds will soon take the form of salaries, dividends, and capital gains, and will be taxed in those forms.
The second factor, less tax avoidance, applies with special force to a rollback of corporate taxes. As we noted last year, bringing down the top rate to 22% from 35% would dramatically reduce corporate flight to low-tax jurisdictions in the rest of the world.
Following the publication of our article, the CBO released a study confirming that U.S corporate tax rates are among the highest in the world. Among the Group of 20 countries—including Japan, China, Russia, Germany, France, Canada, and the U.K.—the U.S. is No. 1, 3, and 4, respectively, in “top statutory corporate tax rate,” “average corporate tax rate,” and “effective corporate tax rate.” The Better Way plan would narrow this gap significantly and make the U.S. more competitive.
But when it comes to the Better Way plan for cutting tax rates on personal income, Barron’s believes that there would be a loss of revenue even after taking into account behavioral changes. The revenue reduction from the proposed personal income-tax cuts has been estimated, on a static basis, at an average of $98 billion a year. We can assume that dynamic losses would run 10% less, or $88 billion, mainly because lower taxes are likely to encourage people to work.
Still, $88 billion a year is a huge loss of revenue. Barron’s proposes that the Better Way plan consider splitting the difference and going halfway on the tax cut, thus saving $44 billion.
THE REVENUE-ENHANCING corporate tax cut would include a special kicker in the form of the border adjustment tax. The BAT would deny corporations the ability to deduct the cost of imports from their taxable income, while all income earned from exports would be exempt from the 20% levy.
This means that companies selling imported goods in the domestic market would be taxed on the sale’s full proceeds—not just on the profit earned—which could more than offset the gains from the corporate tax reduction. At the same time, as noted, there would be no tax on the sale of exports.
The GOP’s Big Three Key players in the border adjustment tax debate: Senate Majority Leader Mitch McConnell, above, and House Speaker Paul Ryan and President Donald Trump, below. McConnell has said that he hasn’t made up his mind about the levy. Alex Wong/Getty Images
The BAT would bring uncertainty and disruption to the U.S. economy, making it hard to predict whether it really would raise $100 billion annually in revenue. The basic idea is that, because the U.S. imports more than it exports, the export exemption would be more than offset by hitting imports hard. Regardless of how it shakes out, the value of the transactions affected by the BAT is huge.
The U.S. trade deficit—the difference between exports and imports—ran at just 3.4% of real GDP in 2016, much lower than the 5.5% peak of 2005. But the actual gross flows of exports and imports are much larger than the difference between the two flows. Exports last year were valued at $2.2 trillion, or 12.8% of real GDP, and imports at $2.7 trillion, or 16.2% (see chart). Given those magnitudes, the tax plan is likely to require massive readjustments throughout the economy.
That’s why major importers, like Wal-Mart Stores, are objecting—and why exporters are clearly pleased. As you might expect, then, the BAT is pitting exporters against importers, creating needless discord at a time when the country is surely suffering from more discord than it can handle.
THE POSITION PAPER for the Better Way asserts that by “exempting exports and taxing imports,” the BAT does “not” consist of the “addition of a new tax.” But of course, the BAT’s designers know that imports normally exceed exports by about $500 billion a year. Apply a back-of-the-envelope 20% to that $500 billion, and you get the hoped-for $100 billion in revenue. So the maneuver of “exempting exports and taxing imports” certainly looks and sounds like a new tax.
The Better Way statement also argues that there is an imbalance in the tax treatment of imports and exports that the BAT must remedy. “In the absence of border adjustments,” it states, “exports from the United States implicitly bear the cost of the U.S. income tax, while imports do not bear any federal income tax cost. This amounts to a self-imposed unilateral penalty on American exports and a self-imposed unilateral subsidy for U.S. imports.”
Ryan strongly supports the tax. Chip Somodevilla/Getty Images
But all other countries impose this “implicit cost” on exports through their own corporate income tax. And since the Better Way would slash America’s top rate to 20%, this implicit cost would finally become competitive with that of other nations.
Some supporters of the BAT like it precisely because it would help exports and penalize imports. The mercantilist view of economics implicit in that aim was discredited in Adam Smith’s 1776 treatise, The Wealth of Nations. And apart from the massive dislocations that will occur if imports shrink, this calls into question whether the projected $100 billion a year in revenue is realistic. As Alan Greenspan once wisely said, “Whatever you tax, you get less of.”
Then again, whether we really will get fewer imports depends a lot on the exchange value of the dollar. Other supporters of the BAT predict that the dollar will respond by appreciating against other currencies, conforming to the dictates of textbook fundamentals. If the dollar appreciates enough, the advantage to exporters and disadvantage to importers will be nullified. Without getting into the technicalities of how all this would work, we concede that it is all quite possible.
But as currency analysts and traders can tell you, exchange rates are subject to all kinds of forces and can spend long periods flouting textbook fundamentals. So whether the dollar will really strengthen in response to the BAT is anyone’s guess. But even if it does, a much stronger greenback would bring other disruptions. American investors with holdings denominated in foreign currencies would take a huge hit. And America’s tourist industries, which are already hurting from what the Los Angeles Times has called a “Trump slump,” would be hurt even more, as the cost of traveling to the States jumps.
There are other questions. Would the World Trade Organization challenge the BAT? Might our trading partners respond in ways that would be unfavorable to us? The border adjustment tax is an experiment in Rube Goldberg economics that the U.S. can do without.
SINCE REVENUE NEUTRALITY is the goal of the Better Way package, what about making up for the $100 billion a year in revenue that the border adjustment tax is supposed to generate?
Whether this tax really will raise as much as $100 billion depends on how imports and exports respond, which is hard to predict. Also, the reduction in the corporate income tax would probably be revenue-enhancing and could generate more than $50 billion in annual revenue.
The president has declared that “anytime I hear border adjustment, I don’t love it” and has voiced concern that it’s overly complicated. Michael Reynolds/Getty Images
We note that the full title of the House Republican plan is “A Better Way: Our Vision for a Confident America,” which leaves room for a vision that includes cost-cutting, along with tax-cutting.
That discussion revealed much low-hanging fruit. For example, the Medicare system is rife with “improper payments,” which Medicare itself estimates at 11% of its spending in 2016. That’s probably a low estimate, because those who get improperly paid tend to keep these payments hidden. Barron’s calculated that if the improper-payment rate could be halved, it would save more than $400 billion over 10 years.
That would contribute $40 billion a year to the $100 billion shortfall from forgoing the BAT. To that we add $65 billion, and perhaps as much as $100 billion, by eliminating corporate welfare.
The Better Way statement properly criticizes the tax code for being “littered with hundreds of preferences and subsidies that pick winners and losers” and “direct resources to politically favored interests.” Spending on corporate welfare is another form of subsidy that picks winners and losers and directs funds to politically favored interests.
IN A 2012 PAPER, “Corporate Welfare in the Federal Budget,” the Cato Institute identified nearly $100 billion worth of yearly spending on corporate handouts, broadly defined, that could be ended. At Barron’s request, Cato senior fellow Chris Edwards updated the scoring on just 10 of the institute’s 40 categories of corporate welfare and came up with $66 billion in potential cuts.
High on Edwards’ list: farm subsidy programs, which redistribute taxpayer money to relatively rich agribusinesses and landowners. That the farm industry receives subsidies makes about as much sense as channeling funds to the restaurant industry, which could well be riskier than farming, based on its high failure rate. This form of corporate welfare goes back to the Great Depression of the 1930s. But whatever argument might have been made for it then hardly applies today, with the yearly tab currently at $25 billion.
Also on the corporate welfare list: pork-barrel handouts administered by the Department of Housing and Urban Development, totaling $13 billion, which go under the heading of “community development,” and which distribute funds to such recipients as museums, recreational facilities, and parking lots. Whatever one may think about the worthiness of these projects, they are better left to states and localities.
Another $10 billion could be saved by abolishing the Universal Service Fund, through which the Federal Communications Commission subsidizes telecommunications companies, among others. A creation of the Telecommunications Act of 1996, this attempt to pick winners and losers is more unnecessary than ever in this dynamic and competitive industry.
PRESIDENT TRUMP PROMISED to “drain the swamp” of Washington’s special interests. One route toward that admirable goal would be to cut corporate welfare. Trump should repeat his objections to a border adjustment tax that would favor the interests of some businesses over others. He can help make U.S. corporations great again by weaning them off subsidies and reducing their tax burdens.
And there are many other provisions that would reduce penalties on work, saving, investment, and entrepreneurship. No, it’s not quite a flat tax, which is the gold standard of tax reform, but it is a very pro-growth initiative worthy of praise.
That being said, there is a feature of the plan that merits closer inspection. The plan would radically change the structure of business taxation by imposing a 20 percent tax on all imports and providing a special exemption for all export-related income. This approach, known as “border adjustability,” is part of the plan to create a “destination-based cash flow tax” (DBCFT).
When I spoke about the Better Way plan at the Heritage Foundation last month, I highlighted the good features of the plan in the first few minutes of my brief remarks, but raised my concerns about the DBCFT in my final few minutes.
Allow me to elaborate on those comments with five specific worries about the proposal.
Concern #1: Is the DBCFT protectionist?
It certainly sounds protectionist. Here’s how the Financial Timesdescribed the plan.
The border tax adjustment would work by denying US companies their current ability to deduct import costs from their taxable income, meaning companies selling imported products would effectively be taxed on the full value of the sale rather than just the profit. Export revenues, meanwhile, would be excluded from company tax bases, giving net exporters the equivalent of a subsidy that would make them big beneficiaries of the change.
Charles Lane of the Washington Postexplains how it works.
…the DBCFT would impose a flat 20 percent tax only on earnings from sales of output consumed within the United States… It gets complicated, but the upshot is that the cost of imported supplies would no longer be deductible from taxable income, while all revenue from exports would be. This would be a huge incentive to import less and export more, significant change indeed for an economy deeply dependent on global supply chains.
That certainly sounds protectionist as well. A tax on imports and a special exemption for exports.
But proponents say there’s no protectionism because the tax is neutral if the benchmark is where products are consumed rather than where income is earned. Moreover, they claim exchange rates will adjust to offset the impact of the tax changes. Here’s how Lane explains the issue.
…the greenback would have to rise 25 percent to offset what would be a new 20 percent tax on imported inputs — propelling the U.S. currency to its highest level on record. The international consequences of that are unforeseeable, but unlikely to be totally benign for everyone. Bear in mind that many other countries — China comes to mind — can and will manipulate exchange rates to protect their own short-term interests.
For what it’s worth, I accept the argument that the dollar will rise in value, thus blunting the protectionist impact of border adjustability. It would remain to be seen, though, how quickly or how completely the value of the dollar would change.
Concern #2: Is the DBCFT compliant with WTO obligations?
The United States is part of the World Trade Organization (WTO) and we have ratified various agreements designed to liberalize world trade. This is great for the global economy, but it might not be good news for the Better Way plan because WTO rules only allow border adjustability for indirect taxes like a credit-invoice value-added tax. The DBCFT, by contrast, is a version of a corporate income tax, which is a direct tax.
The column by Charles Lane explains one of the specific problems.
Trading partners could also challenge the GOP plan as a discriminatory subsidy at the World Trade Organization. That’s because it includes a deduction for wages paid by U.S.-located firms, importers and exporters alike — a break that would obviously not be available to competitors abroad.
Advocates argue that the DBCFT is a consumption-base tax, like a VAT. And since credit-invoice VATs are border adjustable, they assert their plan also should get the same treatment. But the WTO rules say that only “indirect” taxes are eligible for border adjustability. The New York Timesreports that the WTO therefore would almost surely reject the plan.
Michael Graetz, a tax expert at the Columbia Law School, said he doubted that argument would prevail in Geneva. “W.T.O. lawyers do not take the view that things that look the same economically are acceptable,” Mr. Graetz said.
A story in the Wall Street Journal considers the potential for an adverse ruling from the World Trade Organization.
Even though it’s economically similar to, and probably better than, the value-added taxes (VATs) many other countries use, it may be illegal under World Trade Organization rules. An international clash over taxes is something the world can ill afford when protectionist sentiment is already running high. …The controversy is over whether border adjustability discriminates against trade partners. …the WTO operates not according to economics but trade treaties, which generally treat tax exemptions on exports as illegal unless they are consumption taxes, such as the VAT. …the U.S. has lost similar disputes before. In 1971 it introduced a tax break for exporters that, despite several revamps, the WTO ruled illegal in 2002.
And a Washington Posteditorial is similarly concerned.
Republicans are going to have to figure out how to make such a huge de facto shift in the U.S. tax treatment of imports compliant with international trade law. In its current iteration, the proposal would allow corporations to deduct the costs of wages paid within this country — a nice reward for hiring Americans and paying them well, which for complex reasons could be construed as a discriminatory subsidy under existing World Trade Organization doctrine.
Concern #3: Is the DBCFT a stepping stone to a VAT?
If the plan is adopted, it will be challenged. And if it is challenged, it presumably will be rejected by the WTO. At that point, we would be in uncharted territory.
Would that force the folks in Washington to entirely rewrite the tax system? Would they be more surgical and just repeal border adjustability? Would they ignore the WTO, which would give other nations the right to impose tariffs on American exports?
One worrisome option is that they might simply turn the DBCFT into a subtraction-method value-added tax (VAT) by tweaking the law so that employers no longer could deduct expenses for labor compensation. This change would be seen as more likely to get approval from the WTO since credit-invoice VATs are border adjustable.
This possibility is already being discussed. The Wall Street Journal story about the WTO issue points out that there is a relatively simple way of making the DBCFT fit within America’s trade obligations, and that’s to turn it into a value-added tax.
One way to avoid such a confrontation would be to revise the cash flow tax to make it a de facto VAT.
One tax initiative that should be strangled before it sees the light of day is to give a tax rebate to exporters and to impose taxes on imports. …It’s a bad idea. Why do we want to make American consumers pay more for products while subsidizing foreign buyers? It also could put us on the slippery slope to our own VAT.
And that’s not a slope we want to be on. Unless the income tax is fully repealed (sadly not an option), a VAT would be a recipe for turning America into a European-style welfare state.
Concern #4: Does the DBCFT undermine tax competition and give politicians more ability to increase tax burdens?
Alan Auerbach, an academic from California who previously was an adviser for John Kerry and also worked at the Joint Committee on Taxation when Democrats controlled Capitol Hill, is the main advocate of a DBCFT (the New York Timeswrote that he is the “principal intellectual champion” of the idea).
He wrote a paper several years ago for the Center for American Progress, a hard-left group closely associated with Hillary Clinton. Auerbach explicitly argued that this new tax scheme is good because politicians no longer would feel any pressure to lower tax rates.
This…alternative treatment of international transactions that would relieve the international pressure to reduce rates while attracting foreign business activity to the United States. It addresses concerns about the effect of rising international competition for multinational business operations on the sustainability of the current corporate tax system. With rising international capital flows, multinational corporations, and cross-border investment, countries’ tax rates and tax structures are of increasing importance. Indeed, part of the explanation for declining corporate tax rates abroad is competition among countries for business activity. …my proposed reforms…builds on the [Obama] Administration’s approach…and alleviates the pressure to reduce the corporate tax rate.
This is very troubling. Tax competition is a very valuable liberalizing force in the world economy. It partially offsets the public choice pressures on politicians to over-tax and over-spend. If governments no longer had to worry that taxable activity could escape across national borders, they would boost tax rates and engage in more class warfare.
Concern #5: Does the DBCFT create needless conflict and division among supporters of tax reform?
As I pointed out in my remarks at the Heritage Foundation, there’s normally near-unanimous support from the business community for pro-growth tax reforms.
That’s not the case with the DBCFT.
The Washington Examiner reports on the divisions in the business community.
Major retailers are skeptical of the House Republican plan to revamp the tax code, fearing that the GOP call to border-adjust corporate taxes could harm them even if they win a significant cut to their tax rate. As a result, retailers, oil refiners and other industries that import goods to sell in the U.S. could provide a major obstacle to the Republican effort to reform taxes. …The effect of the border adjustment, retailers fear, would be that the goods they import to sell to consumers would face a 20 percent mark-up, one that would force retailers like Walmart, the Home Depot and Sears…to raise prices and lose customers.
A story from CNBC highlights why retailers are so concerned.
…retailers are nervous. Very nervous. …About 95 percent of clothing and shoes sold in the U.S. are manufactured overseas, which means imports make up a vast majority of many U.S. retailers’ merchandise. …If the GOP plan were adopted as it’s currently laid out, Gap pays 20 percent corporate tax on the $5 profit from the sweater, or $1. Plus, 20 percent tax on the $80 cost it paid for that sweater from the overseas supplier, or $16. That means the tax goes from $1.75 to $17 for that sweater, more than three times the profit on that sweater. Talk about a hit to margins. …Retailers certainly aren’t taking a lot of comfort in the economic theory of dollar appreciation. …the tax reform plan will dilute specialty retailers’ earnings by an average of 132 percent. …Athletic manufacturers could take a 40 percent earnings hit… Gap, Carter’s , Urban Outfitters , Fossil and Under Armour are most at risk under the plan.
And here’s another article from the Washington Examiner that explains why folks in the energy industry are concerned.
…the border adjustment would raise costs for refiners that import oil. In turn, that could raise prices for consumers. The border adjustment would amount to a $10-a-barrel tax on imported crude oil, raising costs for drivers buying gasoline by up to 25 cents a gallon, the energy analyst group PIRA Energy Group warned this week. The report warned of a “potential huge impact across the petroleum industry,” even while noting that the tax reform plan faces many obstacles to passage.
Concern #6: What happens when other nations adopt their versions of a DBCFT?
Advocates of the DBCFT plausibly argue that if the WTO somehow approves their plan, then other nations will almost certainly copy the new American system.
But is also has negative implications for the fight to protect America from a VAT. The main selling point for advocates of the DBCFT is that we need a border-adjustable tax to offset the supposed advantage that other nations have because of border-adjustable VATs (both Paul Krugman and I agree that this is nonsense, but it still manages to be persuasive for some people).
So what happens when other nations turn their corporate income taxes into DBCFTs, which presumably will happen? We’re than back where we started and misguided people will say we need our own VAT to balance out the VATs in other nations.
The bottom line is that a DBCFT is not the answer to America’s wretched business tax system. There are simply too many risks associated with this proposal. I’ll elaborate tomorrow in Part II and also explain some good ways of pursuing tax reform without a DBCFT.
Chairman Brady Acknowledges “Valid Concerns” About the Border Adjustment Tax Harming U.S. Businesses
Post by Freedom Partners
After months of insisting that a trillion-dollar Border Adjustment Tax (BAT) on American consumers is the best and only way to achieve pro-growth tax reform without adding to the deficit, Ways and Means Chairman Kevin Brady acknowledged that importers fearful of the new tax have “valid concerns.”
The proposed BAT from House Republicans would mean a new 20 percent tax on everything imported into the U.S., raising up to $1.2 trillion of new government revenue in the form of higher prices, shouldered by consumers. In effect, the regressive tax could undercut positive economic outcomes from lower rates and a simplified tax code through tax reform.
According to Chairman Brady, House Republicans need to “make sure that we allay the valid concerns of those that are importing today,” CNBC reports.
Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:
“Some of the ‘valid concerns’ that Chairman Brady acknowledges include a devastating new trillion-dollar tax hike, higher costs on everyday goods, fewer jobs, and less economic opportunity. We hope to work with the administration and Congress to get pro-growth tax reform done, but a 20 percent tax hike on all imports would only undermine the point of tax reform – which is to provide much-needed relief for taxpayers and the economy. A massive tax hike on all imports is bad policy, and Americans deserve a better plan that can unite lawmakers in both the House and Senate behind comprehensive tax reform.”
Americans for Prosperity has already identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that ought to be eliminated before any new tax on U.S. consumers. Freedom Partners and its coalition allies support the efforts of Congress and the administration to bring comprehensive tax reform to reality in a way that protects all Americans from a massive tax hike.
U.S. Businesses Facing Massive Tax Increases Under A Border-Adjusted Tax System Have “Valid Concerns”
Wall Street Journal: “Some Retailers And Other Big Importers … Warn Of Tax Bills That Would Exceed Profits, Forcing Them To Pass Costs To Consumers. ”Cody Lusk, president of the American International Automobile Dealers Association, says his members are shocked that a Republican Congress is proposing a 20% tax on imports.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
LUSK: “We view this as a very, very serious potential blow to the auto sector and the economy.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
Financial Times: Border Tax Threatens To Devastate Importers Through Soaring Tax Bills. “Yet for Mr. Woldenberg the hope has turned to horror. Republicans are still promising the most sweeping changes since the Reagan reforms of 1986. But the only firm proposal on the table — from the House of Representatives — threatens to devastate his 150-person business because it includes a 20 per cent tax on imports … The problem for Mr. Woldenberg is that his goods come from China — 98 per cent of the products he sells in the US are imported. US factories could not produce them with the same low costs and specialized skills, he says. So he would have no choice but to pay the import levy. He estimates it would send his tax bill soaring to 165 per cent of earnings.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RICK WOLDENBERG: “To preserve cash flow I [would have to] raise my prices by a third, expect volume to go down by 40 per cent, and fire one out of five people.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RBC Capital Markets: Major Retailers Would Face Tax Bills That Exceed Their Operating Profits. “Major retailers like Wal-Mart, Best Buy, Costco and Dollar Tree would face tax bills that exceed their operating profits under House Republicans’ plans to create a ‘border adjustable’ business tax, RBC Capital Markets said. The investment bank sided with retailers in a debate over the proposal, saying in a research note it would have a ‘seriously adverse’ impact on them. ‘If the US moves to a border-adjusted tax system, most of our retailers would be forced to raise prices (and revenues) or meaningfully change their import/domestic sourcing mix, or their earnings would be materially reduced,’ it said.” (Brian Faler, “RBC Capital Markets: GOP Border-Adjustment Plan Bad For Retailers,” POLITICO Pro, 12/12/16)
POLITICO: “Retailers Fear Massive Tax Increases Under House Republican Tax Plan” “Many retailers fear that, even with Republicans promising to slash the corporate tax rate, they will still face big tax increases that in some cases will exceed their profits. On high alert over the proposal, retailers have begun a big lobbying campaign on the Hill, warning lawmakers and their aides that any tax hikes will get passed on to their constituents in the form of higher prices.” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
The National Retail Federation Warns That A Border Tax Could Shut Businesses Down Completely. “‘Our members have told us that the import tax could be as high as five times their profits,’ said David French, chief lobbyist for the National Retail Federation. ‘I don’t know how viable some retailers would be in the face of this import tax.’” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
POLITICO Pro: “Some Of The Biggest Losers Would Be Retailers Like Walmart, Best Buy And Home Depot That Import Massive Amounts Of Goods And Materials On Which They Would Suddenly Have To Pay Taxes.” “The border adjustment plan would affect individual companies differently, depending in part on how much they import and export. Some of the biggest losers would be retailers like Walmart, Best Buy and Home Depot that import massive amounts of goods and materials on which they would suddenly have to pay taxes.” (Brian Faler, “Some Companies May Never Pay Taxes Under Border-Adjustment Tax Plan,” POLITICO Pro, 1/9/17)
Axios: Cowen Research Released A Study Highlighting Some Of The Big Name Companies That Will Be Hurt By The Border Adjustments High Tax Hikes. “Cowen Research published a report Thursday that estimates the effect of the reform plan, and other planned measures, like eliminating the deductibility of interest and a headline corporate tax cut, on different industries and companies. Here are some of the big-name firms Cowen says will be hurt by reform: 1. Apple: The world’s largest company would see its tax bill jump because it won’t be able to deduct the expense of assembly abroad. 2. Constellation Brands: The largest beer importer in America will not be able to expense the cost of goods it brings across the border, like its Corona brand. 3. Gap: Between 50% and 80% of the retailer’s cost of the goods its sells comes from abroad. Walmart: 4. Walmart’s low margins means that it may not be able to survive a tax hike on imported goods without raising prices. 5. Target: Will suffer from the same conundrum as Walmart, but will be worse off since less of its revenue comes from domestically-sourced groceries. J.C. Penney: The department store has high debt loads, and interest on debt will not be deductible under the Republican plan. (Christopher Matthews, “These Companies Will Be Hit Hardest By GOP Tax Reform,” Axios, 1/27/17)
Border Adjustment Tax Would Result In Higher Costs For Hard-Working Families
Christian Science Monitor: Border Tax Could Raise Car Prices By Thousands Of Dollars. “Michigan-based Baum & Associates says that a border tax–one that applies not only to vehicles imported from factories abroad but also to foreign-made vehicle parts–could increase sticker prices by as much as $17,000 … Most increases would be smaller, but still very substantial. Volvo, for example, would need to up its prices by more than $7,500 to accommodate a border tax. Volkswagen wouldn’t be far behind, with increases of around $6,800. Even Detroit brands would see price upticks: Ford’s would climb $285, and General Motors’ would rise by nearly $1,000. Fiat Chrysler would have to boost prices by closer to $2,000.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
Auto Sales Would Plummet Under A Border Adjustment Tax. “A report from UBS Securities says that the higher car prices would slash U.S. auto sales by about 2 million vehicles per year. That would more than erase the increased capacity and almost certainly result in layoffs.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
More Than A Hundred American Businesses Are Opposing The Republican Border Tax: “Don’t Make Hard-Working Families Pay More On Essential Products.” “Nike, Rite Aid, The Gap, Best Buy and Abercrombie & Fitch have joined a new advocacy group aimed at killing House Republicans’ plans to create a border adjustable business tax. They are some of the more than 100 companies and trade associations behind Americans for Affordable Products, an organization launched today that is pushing lawmakers to dump a plan to begin taxing imports as part of a broader tax-code rewrite. The groups, which rely on imports, fear the House Republican plan will mean huge tax increase even as Republicans promise to simultaneously slash the corporate tax rate … Other well-known companies joining the effort include Target, Walmart, QVC, Petco, AutoZone, Macy’s and Levi Strauss.” (Brian Faler, “Border Adjustment Tax Opponents Launch New Group Targeting GOP Proposal,” Politico, 2/01/17)
“A Sweeping Tax Reform Proposal Meant To Boost U.S. Manufacturing Faces Mounting Pressure From Industries That Rely Heavily On Imported Goods …” “A sweeping tax reform proposal meant to boost U.S. manufacturing faces mounting pressure from industries that rely heavily on imported goods as President-elect Donald Trump and congressional Republicans work to finalize new tax legislation. As Republican members of the House of Representatives tax committee prepared to discuss tax reform this week, the panel received a letter from 81 industry groups rejecting the proposal known as ‘border adjustability.’ A lynchpin of the House Republican ‘Better Way’ agenda and viewed favorably by Trump’s team, the policy would help manufacturers by exempting export revenues from corporate taxes. But it would tax imports, hitting import-dependent industries.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
“Companies That Rely On Global Supply Chains Would Face Huge Business Challenges Caused By Increased Taxes And Increased Cost Of Goods.” “In a Dec. 13 letter to House Ways and Means Chairman Kevin Brady and incoming top Democrat Richard Neal, groups representing the auto and retailing industries, among others, said: ‘Companies that rely on global supply chains would face huge business challenges caused by increased taxes and increased cost of goods.’ They warned of ‘reductions in employment, reduced capital investments and higher prices for consumers’ as potential consequences.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
CNBC: Coach CEO Victor Luis Acknowledged That “Any Border Tax Will Lead To Higher Prices For The Consumer.” “If we see this border adjustment in an economy where 70 percent of GDP is driven by consumption that is driven on imports, any border tax will lead to higher prices for the consumer … That’s just a reality that we’ll have to face if it comes to that.” (Rachel Cao, “Coach CEO: Any Border Tax Will Lead To Higher Prices For The Consumer,” CNBC, 1/31/17)
National Retail Federation: The Border Adjustment Tax Could Cost The Average Family $1,700 In Just The First Year. “The imposition of a ‘border adjustment tax,’ a key provision of a pending House tax reform proposal, would end up seriously harming U.S. consumers. NRF analysis indicates that this plan could cost the average family $1,700 in the first year alone if the border adjustment provision is enacted. While economic theory suggests that trade flow of imports and exports would balance out over the long run due to offsetting exchange rate and price adjustments, there is no consensus as to the degree or the timing of these adjustments. In the near term, consumers would be left to pick up the significant tab while hoping that the economic theory proves out.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
NRF: Annual Family’s Savings Could Be Wiped Out By Nearly A Third. “For the average family, 27 percent of their savings (income after taxes and expenditures) could evaporate with the cost increases caused by the border tax.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
“Unmarried adults without children currently have only $443 left over annually after taxes and expenditures. If the border adjustment tax were enacted, they could see an $836 increase in costs — nearly 200 percent higher than their annual savings.”
“One-parent households, which are already in the red, could see an additional $1,000 added to their debt burden as they do what they can to make ends meet. Their apparel and footwear bills would increase by $271”
“The average family (married with children) could see their apparel costs (including shoes) increase by $437 a year.”
“Single people could see their annual gasoline bills rise by $189, a whopping 43 percent of their annual average savings.”
“Married couples with children could see their annual gasoline bill could increase by over $400.”
CNBC: “The Republicans’ Plan To Enact A Border Adjustment Tax Will Leave Consumers Digging Deeper Into Their Pockets,” Increasing The Price Of Everyday Goods Like Clothes And Shoes By 20 Percent. “It will force consumers to pay as much as 20 percent more for the products they need. Gasoline is estimated to go up as much as 35 cents a gallon,’ said ‘Americans for Affordable Products’ advisor Brian Dodge … ‘Common household goods, apparel, things that people count on every day, pajamas, will cost more and really just so a certain, select group of corporations can avoid paying taxes forever. We think that’s bad policy…” (Michelle Fox, “Consumers Could See 20% Price Hike With Border Adjustment Tax, Retail Group Says,” CNBC, 2//17)
Economists And Analysts Weigh-In Against Border Adjustments
Dan Mitchell, Cato Institute: “I’ve Never Understood Why Politicians Think It’s A Good Idea To Have Higher Taxes On What Americans Consume And Lower Taxes On What Foreigners Consume.” (Dan Mitchell, “A Remarkably Good And Reasonably Bold Tax Reform Plan From House Republicans,” International Liberty, 6/25/16)
President Of The New York Fed Bill Dudley: “… There Could Be A Lot Of Unintended Consequences.” “Another prominent critic of a ‘border adjustment tax’ emerged Tuesday: the president of the New York Federal Reserve. Bill Dudley was asked by Macy’s CEO Terry Lundgren at a meeting of the National Retail Federation trade group what he thinks of the idea of a border adjustment tax, which involves taxing imports at 20 percent, while making U.S. exports tax-free. … ‘I think that it will lead to a lot of changes in the value of the dollar, the price of imported goods in the U.S., and I’m not sure that would all happen very smoothly,’ Dudley said. ‘I also think there could be a lot of unintended consequences.’” (Michelle Caruso-Cabrera, “NY Fed’s Dudley Sees ‘A Lot Of Unintended Consequences’ From Border-Tax Plan,” CNBC, 1/17/17)
Stephen Moore, Heritage Foundation: Border Tax Unlikely To Be Enacted. “A Heritage Foundation economist who advised President Trump’s campaign said he doubts a proposal from House Republicans to tax imports and exempt exports will gain traction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
MOORE: “I think it’s a distraction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
Steve Forbes: Border Adjustment Amounts To “Sneaky, Anti-Consumer Tax.” “This levy will cost American consumers at least a trillion dollars over the next ten years … Prices for everyday items, such as socks, shoes and household appliances, will go up. So will tech devices like the iPad, not to mention automobiles and trucks. Gasoline? Millions of Americans will pay an additional 30 cents or more per gallon at the pump. Lower-income and struggling middle-class Americans will get hit the hardest.” (Steve Forbes, “OMG! House Republicans Are Preparing To Hit Consumers With A Horrible New Tax That Will Harm Trump And Hurt The Economy,” Forbes, 1/11/17)
POLITICO Pro: “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans.” “An economic adviser to President-elect Donald Trump slammed plans to create a so-called border adjustable business tax, and predicted it could kill efforts to overhaul the tax code. The House Republican proposal is overly complicated … said Larry Kudlow, who helped write Trump’s tax-reform plans.” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “That is an exercise in government planning and complexity that I believe is doomed to fail … I think the whole corporate tax reform, which is the most important pro-growth measure, will go down the drain over this … There’s a problem that exists, but this is not the right solution …” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “GOP’s Border Adjustment Tax Is ‘Voodoo Economics” “President-elect Donald Trump is correct to criticize the House Republican plan to tax cross-border trade … said Larry Kudlow, who served as a senior economic adviser to Trump’s campaign…’I hate to say this, but it’s ‘voodoo economics’” (R. Williams, “Larry Kudlow: GOP’s Border Adjustment Tax Is ‘Voodoo Economics,” Newsmax, 1/17/17)
I wrote yesterday to praise the Better Way tax plan put forth by House Republicans, but I added a very important caveat: The “destination-based” nature of the revised corporate income tax could be a poison pill for reform.
I listed five concerns about a so-called destination-based cash flow tax (DBCFT), most notably my concerns that it would undermine tax competition (folks on the left think it creates a “race to the bottom” when governments have to compete with each other) and also that it could (because of international trade treaties) be an inadvertent stepping stone for a government-expanding value-added tax.
Brian Garst of the Center for Freedom and Prosperity has just authored a new study on the DBCFT. Here’s his summary description of the tax.
The DBCFT would be a new type of corporate income tax that disallows any deductions for imports while also exempting export-related revenue from taxation. This mercantilist system is based on the same “destination” principle as European value-added taxes, which means that it is explicitly designed to preclude tax competition.
Since CF&P was created to protect and promote tax competition, you won’t be surprised to learn that the DBCFT’s anti-tax competition structure is a primary objection to this new tax.
First, the DBCFT is likely to grow government in the long-run due to its weakening of international tax competition and the loss of its disciplinary impact on political behavior. … Tax competition works because assets are mobile. This provides pressure on politicians to keep rates from climbing too high. When the tax base shifts heavily toward immobile economic activity, such competition is dramatically weakened. This is cited as a benefit of the tax by those seeking higher and more progressive rates. …Alan Auerbach, touts that the DBCFT “alleviates the pressure to reduce the corporate tax rate,” and that it would “alter fundamentally the terms of international tax competition.” This raises the obvious question—would those businesses and economists that favor the DBCFT at a 20% rate be so supportive at a higher rate?
Brian also shares my concern that the plan may morph into a VAT if the WTO ultimately decides that is violates trade rules.
Second, the DBCFT almost certainly violates World Trade Organization commitments. …Unfortunately, it is quite possible that lawmakers will try to “fix” the tax by making it into an actual value-added tax rather than something that is merely based on the same anti-tax competition principles as European-style VATs. …the close similarity of the VAT and the DBCFT is worrisome… Before VATs were widely adopted, European nations featured similar levels of government spending as the United States… Feeding at least in part off the easy revenue generate by their VATs, European nations grew much more drastically over the last half century than the United States and now feature higher burdens of government spending. The lack of a VAT-like revenue engine in the U.S. constrained efforts to put the United States on a similar trajectory as European nations.
And if you’re wondering why a VAT would be a bad idea, here’s a chart from Brian’s paper showing how the burden of government spending in Europe increased once that tax was imposed.
In the new report, Brian elaborates on the downsides of a VAT.
If the DBCFT turns into a subtraction-method VAT, its costs would be further hidden from taxpayers. Workers would not easily understand that their employers were paying a big VAT withholding tax (in addition to withholding for income tax). This makes it easier for politicians to raise rates in the future. …Keep in mind that European nations have corporate income tax systems in addition to their onerous VAT regimes.
And he points out that those who support the DBCFT for protectionist reasons will be disappointed at the final outcome.
…if other nations were to follow suit and adopt a destination-based system as proponents suggest, it will mean more taxes on U.S. exports. Due to the resulting decline in competitive downward pressure on tax rates, the long-run result would be higher tax burdens across the board and a worse global economic environment.
Brian concludes with some advice for Republicans.
Lawmakers should always consider what is likely to happen once the other side eventually returns to power, especially when they embark upon politically risky endeavors… In this case, left-leaning politicians would see the DBCFT not as something to be undone, but as a jumping off point for new and higher taxes. A highly probable outcome is that the United States’ corporate tax environment becomes more like that of Europe, consisting of both consumption and income taxes. The long-run consequences will thus be the opposite of what today’s lawmakers hope to achieve. Instead of a less destructive tax code, the eventual result could be bigger government, higher taxes, and slower economic growth.
My concern with the DBCFT is partly based on theoretical objections, but what really motivates me is that I don’t want to accidentally or inadvertently help statists expand the size and scope of government. And that will happen if we undermine tax competition and/or set in motion events that could lead to a value-added tax.
Let’s close with three hopefully helpful observations.
Helpful Reminder #1: Congressional supporters want a destination-based system as a “pay for” to help finance pro-growth tax reforms, but they should keep in mind that leftists want a destination-based system for bad reasons.
Based on dozens of conversations, I think it’s fair to say that the supporters of the Better Way plan don’t have strong feelings for destination-based taxation as an economic principle. Instead, they simply chose that approach because it is projected to generate $1.2 trillion of revenue and they want to use that money to “pay for” the good tax cuts in the overall plan.
That’s a legitimate choice. But they also should keep in mind why other people prefer that approach. Folks on the left want a destination-based tax system because they don’t like tax competition. They understand that tax competition restrains the ability of governments to over-tax and over-spend. Governments in Europe chose destination-based value-added taxes to prevent consumers from being able to buy goods and services where VAT rates are lower. In other words, to neuter tax competition. Some state governments with high sales taxes in the United States are pushing a destination-based system for sales taxes because they want to hinder consumers from buying goods and services from states with low (or no) sales taxes. Again, their goal is to cripple tax competition.
Something else to keep in mind is that leftist supporters of the DBCFT also presumably see the plan as being a big step toward achieving a value-added tax, which they support as the most effective way of enabling bigger government in the United States.
Helpful Reminder #2: Choosing the right tax base (i.e., taxing income only one time, otherwise known as a consumption-base system) does not require choosing a destination-based approach.
The proponents of the Better Way plan want a “consumption-base” tax. This is a worthy goal. After all, that principle means a system where economic activity is taxed only one time. But that choice is completely independent of the decision whether the tax system should be “origin-based” or “destination-based.”
The bottom line is that you can have the right tax base with either an origin-based system or a destination-based system.
Helpful Reminder #3: The good reforms of the Better Way plan can be achieved without the downside risks of a destination-based tax system.
The Tax Foundation, even in rare instances when I disagree with its conclusions, always does very good work. And they are the go-to place for estimates of how policy changes will affect tax receipts and the economy. Here is a chart with their estimates of the revenue impact of various changes to business taxation in the Better Way plan. As you can see, the switch to a destination-based system (“border adjustment”) pulls in about $1.2 trillion over 10 years. And you can also see all the good reforms (expensing, rate reduction, etc) that are being financed with the various “pay fors” in the plan.
I am constantly asked how the numbers can work if “border adjustment” is removed from the plan. That’s a very fair question.
But there are lots of potential answers, including:
Make a virtue out of necessity by reducing government revenue by $1.2 trillion.
Reduce the growth of government spending to generate offsetting savings.
Reduce the size of the tax cuts in the Better Way plan by $1.2 trillion.
I’m not pretending that any of these options are politically easy. If they were, the drafters of the Better Way plan probably would have picked them already. But I am suggesting that any of those options would be better than adopting a destination-based system for business taxation.
Ultimately, the debate over the DBCFT is about how different people assess political risks. House Republicans advocating the plan want good things, and they obviously think the downside risks in the future are outweighed by the ability to finance a larger level of good tax reforms today. Skeptics appreciate that those proponents want good policy, but we worry about the long-run consequences of changes that may (especially when the left sooner or late regains control) enable bigger government.
P.S. This is not the first time that advocates of good policy have bickered with each other. During the 2016 nomination battle, Rand Paul and Ted Cruz proposed tax reform plans that fixed many of the bad problems in the tax code. But they financed some of those changes by including value-added taxes in their plans. In the short run, either plan would have been much better than the current system. But I was critical because I worried that the inclusion of VATs would eventually give statists a tool to further increase the burden of government.
THE CORNER THE ONE AND ONLY. Speaker Ryan’s Use of Reporters’ Recorders to Explain His Border Tax Was Cute — But Misleading
Faced with growing opposition to their border-adjustment tax, congressional Republicans are nonetheless on the offensive trying to sell it. I have expressed my many reasons for opposing the tax, including my disbelief that Republicans would support a massive tax increase alongside what is otherwise a pro-growth tax reform. While they oppose tax increases to pay for spending increases in other contexts and usually make the case that spending increases should be paid for by spending cuts, Republicans continue to push for this massive new source of revenue, in spite of the distortions it would introduce.
Until now, supporters of the tax have used many questionable arguments. For instance, they claim we shouldn’t worry about the protectionist aspect of a tax that imposes a 20 percent rate to imports but exempts exports under the hope that the U.S. dollar will adjust fully and quickly. However, there are reasons to believe that while the U.S. currency will adjust, it won’t adjust fully (Federal Reserve Board chairwoman Janet Yellen is only the latest one to stress that point), it won’t adjust as quickly as they claim (especially if the tax is challenged under the World Trade Organization as the Europeans have warned is going to be the case), and it won’t result in unicorns and rainbows.
But the latest misguided statements about the border-adjustment tax comes from House speaker Paul Ryan — who ought to know better. During a press conference last week, he repeated the claim that United States was at a disadvantage because other countries’ exports are exempted from taxes while U.S. goods aren’t. [Ryan] noted that most other countries already border-adjust their taxes and tax goods based on whether they were consumed in their jurisdiction.
That comment is bound to confuse reporters because, as Mr. Ryan must know, no other country border-adjusts their corporate income tax. They border-adjust their Value Added Tax. Conflating the two is misleading, to say the least.
The Speaker picked up two reporters’ recorders to give an example of how goods are taxed currently. He suggested one was American-made and the other was Japanese-made. Early on, he dropped one of the recorders, saying “oops” and receiving laughter from the reporters. “Here’s what Japan does when they make this tape recorder: When they send it for export they take the tax off of it, and then it comes to America and it’s not taxed, and it comes through to compete against our good, which was taxed. Theirs was untaxed twice,” Ryan said. “When America makes something, like a tape recorder, we tax it, and then we send it to Japan. As it enters Japan it’s taxed again, to compete against their tape recorder,” he continued. “So we are doing it to ourselves. We are hurting our manufacturing and jobs. We are putting a bias against making things in America in the tax code. . . . That is why we think this is very important. This is good manufacturing policy.”
Oh boy, where do I begin? First, it is true that U.S. companies are at a disadvantage but it is not because of other countries’ tax codes. It is because our corporate-income-tax system has the highest rate of all OECD countries and because, unlike most of our competitors, it taxes U.S. companies’ profits no matter where they are earned in the world. The solution to this disadvantage is to reduce the rates and move to a territorial system. Oh, and by the way, unlike what Ryan and other proponents of a border-adjustment tax would like you to believe, you do not need to move to an expansive destination-based-cash-flow tax to have a territorial tax.
Now let me address the cute tape-recorder example used by the speaker. It is totally misleading because it conflates foreign countries corporate tax and VAT taxes and it paints a picture that is incorrect. For instance, he claims that Japanese exports are exempt from taxes. No, Japanese products exported to the U.S. are exempt from the Japanese VAT but the Japanese company is still paying U.S. corporate tax on its U.S. profits. And you know what? In that sense, the Japanese export is treated exactly like the U.S. goods sold in the U.S. In other words, the playing field is even! I repeat: Japanese goods in the U.S. are taxed like U.S. goods in the U.S.
How about U.S. exports in Japan? Well, it gets hit by the Japanese VAT in Japan and by the Japanese corporate tax but so are Japanese goods sold in Japan. Again, the only disadvantage faced by U.S. companies selling tape recorders abroad comes from the U.S. tax system, which requires that income earned in Japan be taxed by Uncle Sam at 35 percent after benefiting from a tax credit for tax paid in Japan. If the U.S. company decides to keep its Japanese income outside the U.S., the U.S. rate won’t apply.
Dan Mitchell explains why the VAT doesn’t change the terms of trade in this video.
Finally, economists have debunked the idea implied by the speaker that foreign VATs give an advantage to foreign exports — and therefor boost foreign exports. It is simply not true. It follows that imposing a border-adjustment tax in the U.S. will not boost U.S. exports either. Period.
Let me summarize this for you:
No, other countries do not border-adjust their corporate income tax.
Comparing other countries’ VATs and our corporate tax is problematic to say the least.
No, foreign exports sold in the U.S. do not have an advantage over U.S. goods sold in the U.S. Foreign VATs do not boost foreign exports.
A border tax in the U.S. will not boost our exports but it will hurt consumers and many U.S. retailers.
The disadvantage faced by U.S. companies exporting goods abroad comes from the terrible worldwide tax and high rates of the U.S. tax regime, not from other countries’ tax system.
The way to fix the U.S. disadvantage is not to create a new expansive tax that would penalize imports in the U.S. — including imports for the benefit of U.S. domestic companies — and would penalize U.S. consumers.
The Border Adjustment Tax, a proposal favored by House Speaker Paul Ryan, has aroused serious opposition from Republican senators.
FEB 21, 2017
Donald Trump is feeling good about taxes. In his gonzo press conference last Thursday, he assured Americans that “very historic tax reform” is absolutely on track and is going to be—wait for it!—“big league.” The week before, he told a bunch of airline CEOs that “big league” reform was “way head of schedule” and that his people would be announcing something “phenomenal” in “two or three weeks.” And at his Orlando pep rally this past weekend, he gushed about his idea for a punitive 35 percent border tax on products manufactured overseas. The magic is happening, people. And soon America’s tax code will be the best, most beautiful in the world.
But here’s the thing. What Trump doesn’t know about the legislative process could overflow the pool at Mar-a Lago. And when it comes to tax reform, even minor changes make Congress lose its mind. Weird fault lines appear, and the next thing you know, warring factions have painted their faces blue and vowed to die on the blood-soaked battlefield before allowing this marginal rate to change or that loophole to close.
Such drama has, in fact, already begun over the proposal percolating in the House. At issue: a provision known as the border adjustment tax—let’s call it BAT—which, shrunk to its essence, incentivizes domestic manufacturing by slapping a 20 percent levy on imports, while making U.S. companies’ export-revenues tax deductible.
BAT fans—most notably House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady—pitch the provision as an economically elegant twofer: an America-First measure that discourages companies from moving operations overseas while creating a revenue stream ($1 trillion every decade or so) that allows the overall corporate tax rate to be slashed.
Opponents—most vocally Senators David Perdue and Tom Cotton—argue that a BAT is another grubby government cash grab that will ultimately hurt consumers when, say, Walmart has to jack up the prices of underwear, bananas, and Playstations. In a February 8 letter to colleagues, Perdue, who spent four decades in the business world, charged that the BAT is “regressive, hammers consumers, and shuts down economic growth.”Thus the battle lines are drawn. And, make no mistake, this will not be some bush-league, penny-ante skirmish. Behind the legislative factions are amassing some of the heaviest hitters in corporate America, ready to spend millions to sway debate on behalf of their team.Roughly speaking, companies that do a lot of exporting dig the BAT (think: Boeing, Merck, and Dow Chemical) while import-dependent retailers (including Target, Nike, and, yes, Walmart) fear it will destroy their bottom lines. The oil industry isn’t feeling much BAT love either. The Koch brothers want it dead, like, yesterday.At this point, anti-BATers have an edge. Why? Partly, because the provision is super complicated and almost impossible to explain in terms that don’t sound like something a coven of economists vomited up. Ask BAT fans why the provision won’t, in fact, hurt retailers or consumers, and you’re instantly hip-deep in talk of currency revaluation, purchasing power, and territorial taxation. Last Wednesday, one day after Paul Ryan tried to educate Senate Republicans on the wonders of BAT at their weekly policy lunch, Tom Cotton (who represents Walmart’s home state of Arkansas) snarked on the Senate floor, “Some ideas are so stupid only an intellectual could believe them.”This is in no way to suggest that the pro-BAT arguments are wrong. They simply don’t push the same buttons as anti-BAT warnings that Congress is poised to screw consumers in order to fund big tax cuts for corporations.For the past few weeks, in fact, an anti-BAT coalition called Americans for Affordable Products has been busy hawking this exact message. “This is a consumer tax—a means by which House Republicans are paying for other tax deductions,” asserted AAP member Brian Dodge. “It’s not about America First. It’s not a trade-deficit reduction tool. It is a pay-for.”AAP is lobbying lawmakers and staffers and doing public outreach. Last Wednesday, it dispatched eight CEOs to chat with Trump and Vice President Pence. “We view our job as leading a large education campaign,” said Dodge. “We believe the more that lawmakers understand about this proposal, the less inclined they’ll be to support it.”Of course, BAT fans are gearing up as well and promise to be equally aggressive. The day after the AAP roll out, the American Made Coalition launched, with an eye toward helping Ryan’s office spread the good word. “It takes time to educate both policy makers and businesses on what’s on the table,” said Brian Reardon, an adviser to the group.There is no place for subtlety in this war. Part of BAT supporters’ argument is that, without the provision, tax overhaul will implode altogether. Message: Get on board or kiss your once-in-a-lifetime reform opportunity good-bye.It’s a question of Senate math. To pass with a simple majority (and avoid a filibuster by Democrats), the GOP’s plan must go through under the procedure known as reconciliation. But to qualify for reconciliation, the package–which slashes both corporate and upper-bracket taxes–cannot blow a hole in the long-term budget. Without the $1 trillion in revenues from BAT, say advocates, there’s no way that hole can be plugged.“This is the only way at these rates and keeping things revenue neutral,” insisted a senior Republican aide. There is no other viable option. Period. End of story.But anti-BATers are eyeing a different Senate equation. To amass even a simple majority of votes, the BAT can lose only two of the 52 Republican members. (Unless Democrats cross the aisle, of course.) In addition to Cotton’s and Perdue’s open hostility, Senators John Boozman, Mike Rounds, John Cornyn, Tim Scott, and Mike Lee have all expressed reservations. “I have real concerns that this piece of the House blueprint will cause more disruption than necessary,” Lee said. “Will the dollar suddenly shoot up by 20 percent? Will U.S. manufacturers have to redo their international supply chains? These are all open questions.”
With the provision’s Senate prospects iffy, there’s less incentive for House conservatives to support something that smells even faintly like a tax. Both the current chairman of the Freedom Caucus, Mark Meadows, and the former chairman, Jim Jordan, have said they’d like reform done without a BAT.
“My reasoning is very basic,” Jordan told me. “Why in the world would we want to add another revenue stream?” You can debate the impact on exchange rates and purchasing power all day, said Jordan, but that doesn’t address many conservatives’ core objection. “We come at it from fundamental perspective,” he said. “The idea that you’re going to add an entirely new tax is a big problem.”
(BAT fans, for the record, dispute that this is a new tax. It is, they insist, replacing the existing system with an entirely new, far superior one that must be looked at, as Reardon put it, “holistically.”)
The only thing everyone can agree on is that this will be a long, ugly fight. If Trump drops his tariff idea and embraces BAT, it could boost the cause. But even then, he’d need to do major arm-twisting to get Senate skeptics on board (especially with the likes of Walmart and the Kochs twisting the other arm.) Like it or not, this is what the political big leagues are like: slow, messy, and infuriating.
The up side for Trump: He’ll have time to throw a lot more pep rallies on this topic before anything gets decided.
The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2014, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.
The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.
In 2014, 139.6 million taxpayers reported earning $9.71 trillion in adjusted gross income and paid $1.37 trillion in individual income taxes.
The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).
Reported Income and Taxes Paid Both Increased Significantly in 2014
Taxpayers reported $9.71 trillion in adjusted gross income (AGI) on 139.5 million tax returns in 2014. Total AGI grew by $675 billion from the previous year’s levels. There were 1.2 million more returns filed in 2014 than in 2013, meaning that average AGI rose by $4,252 per return, or 6.5 percent.
Meanwhile, taxpayers paid $1.37 trillion in individual income taxes in 2014, an 11.5 percent increase from taxes paid in the previous year. The average individual income tax rate for all taxpayers rose from 13.64 percent to 14.16 percent. Moreover, the average tax rate increased for all income groups, except for the top 0.1 percent of taxpayers, whose average rate decreased from 27.91 percent to 27.67 percent.
The most likely explanation behind the higher tax rates in 2014 is a phenomenon known as “real bracket creep.”  As incomes rise, households are pushed into higher tax brackets, and are subject to higher overall tax rates on their income. On the other hand, the likely reason why the top 0.1 percent of households saw a slightly lower tax rate in 2014 is because a higher portion of their income consisted of long-term capital gains, which are subject to lower tax rates.
The share of income earned by the top 1 percent rose to 20.58 percent of total AGI, up from 19.04 percent in 2013. The share of the income tax burden for the top 1 percent also rose, from 37.80 percent in 2013 to 39.48 percent in 2014.
Table 1. Summary of Federal Income Tax Data, 2014
Number of Returns
Adjusted Gross Income ($ millions)
Share of Total Adjusted Gross Income
Income Taxes Paid ($ millions)
Share of Total Income Taxes Paid
Income Split Point
Average Tax Rate
Note: Does not include dependent filers
High-Income Americans Paid the Majority of Federal Taxes
In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.
In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $465,626 and above) earned 20.58 percent of all AGI in 2014, but paid 39.48 percent of all federal income taxes.
In 2014, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $543 billion, or 39.48 percent of all income taxes, while the bottom 90 percent paid $400 billion, or 29.12 percent of all income taxes.
High-Income Taxpayers Pay the Highest Average Tax Rates
The 2014 IRS data shows that taxpayers with higher incomes pay much higher average individual income tax rates than lower-income taxpayers.
The bottom 50 percent of taxpayers (taxpayers with AGIs below $38,173) faced an average income tax rate of 3.45 percent. As household income increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($133,445 and $188,996) pay an average rate of 13.7 percent – almost four times the rate paid by those in the bottom 50 percent.
The top 1 percent of taxpayers (AGI of $465,626 and above) paid the highest effective income tax rate, at 27.2 percent, 7.9 times the rate faced by the bottom 50 percent of taxpayers.
Taxpayers at the very top of the income distribution, the top 0.1 percent (with AGIs over $2.14 million), paid an even higher average tax rate, of 27.7 percent.
5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 2. Number of Federal Individual Income Tax Returns Filed 1980–2014 (Thousands)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 3. Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 4. Total Income Tax after Credits, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 5. Adjusted Gross Income Shares, 1980–2014 (percent of total AGI earned by each group)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 6. Total Income Tax Shares, 1980–2014 (percent of federal income tax paid by each group)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Table 7. Dollar Cut-Off, 1980–2014 (Minimum AGI for Tax Returns to Fall into Various Percentiles; Thresholds Not Adjusted for Inflation)
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Source: Internal Revenue Service.
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 8. Average Tax Rate, 1980–2014 (Percent of AGI Paid in Income Taxes)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
For data prior to 2001, all tax returns that have a positive AGI are included, even those that do not have a positive income tax liability. For data from 2001 forward, returns with negative AGI are also included, but dependent returns are excluded.
Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of EITC. If it were included, the tax share of the top income groups would be higher. The refundable portion is classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.
The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.
AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others.
The unit of analysis here is that of the tax return. In the figures prior to 2001, some dependent returns are included. Under other units of analysis (like the Treasury Department’s Family Economic Unit), these returns would likely be paired with parents’ returns.
These figures represent the legal incidence of the income tax. Most distributional tables (such as those from CBO, Tax Policy Center, Citizens for Tax Justice, the Treasury Department, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner.
 There is strong reason to believe that capital gains realizations were unusually depressed in 2013, due to the increase in the top capital gains tax rate from 15 percent to 23.8 percent. In 2013, capital gains accounted for 26.6 percent of the income of taxpayers with over $1 million in AGI received, compared to 31.7 percent in 2014 (these calculations apply for net capital gains reported on Schedule D). Table 1.4, Publication 1304, “Individual Income Tax Returns 2014,” Internal Revenue Service, https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-returns-publication-1304-complete-report.
 Here, “average income tax rate” is defined as income taxes paid divided by adjusted gross income.
Story 2: Stagnating United States Economy — The Great Stagnation — Videos —
American Stasis (Episode 3/5)
Why Governments Create Inflation
Tyler Cowen, “The Complacent Class”
TEDxEast – Tyler Cowen – The Great Stagnation
Tyler Cowen: The Great Stagnation
The American Dream and the Complacent Class
The Complacent Class (Episode 1/5)
The New Era of Segregation (Episode 2/5)
American Stasis (Episode 3/5)
The Missing Men (Episode 4/5)
Tyler Cowen: The Rise and Fall of the Chinese Economy
The Great Stagnation by Tyler Cowen
National Income and Product Accounts
Gross Domestic Product: Fourth Quarter and Annual 2016 (Third Estimate)
Corporate Profits: Fourth Quarter and Annual 2016
Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth quarter of
2016 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the
third quarter of 2016, real GDP increased 3.5 percent.
The GDP estimate released today is based on more complete source data than were available for the
"second" estimate issued last month. In the second estimate, the increase in real GDP was 1.9 percent.
With this third estimate for the fourth quarter, the general picture of economic growth remains largely
the same; personal consumption expenditures (PCE) increased more than previously estimated (see
"Updates to GDP" on page 2).
Real gross domestic income (GDI) increased 1.0 percent in the fourth quarter, compared with an
increase of 5.0 percent in the third. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 1.5 percent in the fourth quarter,
compared with an increase of 4.3 percent in the third quarter (table 1).
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, private
inventory investment, residential fixed investment, nonresidential fixed investment, and state and local
government spending that were partly offset by negative contributions from exports and federal
government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The deceleration in real GDP in the fourth quarter reflected downturns in exports and in federal
government spending, an acceleration in imports, and a deceleration in nonresidential fixed investment
that were partly offset by accelerations in private inventory investment and in PCE, and upturns in
residential fixed investment and in state and local government spending.
Current-dollar GDP increased 4.2 percent, or $194.1 billion, in the fourth quarter to a level of $18,869.4
billion. In the third quarter, current-dollar GDP increased 5.0 percent, or $225.2 billion (table 1 and
The price index for gross domestic purchases increased 2.0 percent in the fourth quarter, compared
with an increase of 1.5 percent in the third quarter (table 4). The PCE price index increased 2.0 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.3 percent, compared with an increase of 1.7 percent (appendix table A).
Updates to GDP
The upward revision to the percent change in real GDP primarily reflected upward revisions to PCE and
to private inventory investment that were partly offset by downward revisions to nonresidential fixed
investment and to exports. Imports, which are a subtraction in the calculation of GDP, were revised
upward. For more information, see the Technical Note. For information on updates to GDP, see the
"Additional Information" section that follows.
Advance Estimate Second Estimate Third Estimate
(Percent change from preceding quarter)
Real GDP 1.9 1.9 2.1
Current-dollar GDP 4.0 3.9 4.2
Real GDI --- --- 1.0
Average of Real GDP and Real GDI --- --- 1.5
Gross domestic purchases price index 2.0 1.9 2.0
PCE price index 2.2 1.9 2.0
Real GDP increased 1.6 percent in 2016 (that is, from the 2015 annual level to the 2016 annual level),
compared with an increase of 2.6 percent in 2015 (table 1).
The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed investment,
state and local government spending, exports, and federal government spending that were partly offset
by negative contributions from private inventory investment and nonresidential fixed investment.
Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The deceleration in real GDP from 2015 to 2016 reflected downturns in private inventory investment
and in nonresidential fixed investment and decelerations in PCE, in residential fixed investment, and in
state and local government spending that were partly offset by a deceleration in imports and
accelerations in federal government spending and in exports.
Current-dollar GDP increased 3.0 percent, or $532.5 billion, in 2016 to a level of $18,569.1 billion,
compared with an increase of 3.7 percent, or $643.5 billion, in 2015 (table 1 and table 3).
Real GDI increased 1.6 percent in 2016, compared with an increase of 2.5 percent in 2015 (table 1).
The price index for gross domestic purchases increased 1.0 percent in 2016, compared with an increase
of 0.4 percent in 2015 (table 4).
During 2016 (that is, measured from the fourth quarter of 2015 to the fourth quarter of 2016), real GDP
increased 2.0 percent, compared with an increase of 1.9 percent during 2015. The price index for gross
domestic purchases increased 1.5 percent during 2016, compared with an increase of 0.4 percent during
2015. Real GDI increased 1.9 percent during 2016, compared with an increase of 1.5 percent during
2015 (table 7).
Corporate Profits (table 12)
Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $11.2 billion in the fourth quarter of 2016, compared with an
increase of $117.8 billion in the third quarter.
Profits of domestic financial corporations increased $26.5 billion in the fourth quarter, compared with
an increase of $50.1 billion in the third. Profits of domestic nonfinancial corporations decreased $60.4
billion, in contrast to an increase of $66.4 billion. The estimate of nonfinancial corporate profits in the
fourth quarter was reduced by a $4.95 billion ($19.8 billion at an annual rate) settlement between a U.S.
subsidiary of Volkswagen and the federal and state governments. For more information, see the FAQ,
"What are the effects of the Volkswagen buyback deal on GDP and the national accounts?”. The
rest-of-the-world component of profits increased $45.1 billion, compared with an increase of $1.3 billion.
This measure is calculated as the difference between receipts from the rest of the world and payments to
the rest of the world. In the fourth quarter, receipts increased $9.1 billion, and payments decreased
In 2016, profits from current production decreased $2.3 billion, compared with a decrease of $64.0
billion in 2015. Profits of domestic financial corporations increased $20.5 billion, compared with an
increase of $8.5 billion. Profits of domestic nonfinancial corporations decreased $47.0 billion, compared
with a decrease of $47.3 billion. The rest-of-the-world component of profits increased $24.3 billion, in
contrast to a decrease of $25.2 billion.
* * *
Next release: April 28, 2017 at 8:30 A.M. EDT
Gross Domestic Product: First Quarter 2017 (Advance Estimate)
Additional Resources available at www.bea.gov:
• Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email
subscription service, or following BEA on Twitter @BEA_News.
• Historical time series for these estimates can be accessed in BEA’s Interactive Data Application.
• Access BEA data by registering for BEA’s Data Application Programming Interface (API).
• For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
• BEA's news release schedule
• NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts
Gross domestic product (GDP) is the value of the goods and services produced by the nation’s economy
less the value of the goods and services used up in production. GDP is also equal to the sum of personal
consumption expenditures, gross private domestic investment, net exports of goods and services, and
government consumption expenditures and gross investment.
Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP.
In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ
because they are constructed using largely independent source data. Real GDI is calculated by deflating
gross domestic income using the GDP price index as the deflator, and is therefore conceptually
equivalent to real GDP.
Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is,
at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.”
Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.
The gross domestic purchases price index measures the prices of final goods and services purchased by
The personal consumption expenditure price index measures the prices paid for the goods and services
purchased by, or on the behalf of, “persons.”
Profits from current production, referred to as corporate profits with inventory valuation adjustment
(IVA) and capital consumption adjustment (CCAdj) in the NIPAs, is a measure of the net income of
corporations before deducting income taxes that is consistent with the value of goods and services
measured in GDP. The IVA and CCAdj are adjustments that convert inventory withdrawals and
depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic
measures used in the national income and product accounts.
For more definitions, see the Glossary: National Income and Product Accounts.
Annual rates. Quarterly values are expressed at seasonally-adjusted annual rates (SAAR), unless
otherwise specified. Dollar changes are calculated as the difference between these SAAR values. For
detail, see the FAQ “Why does BEA publish estimates at annual rates?”
Percent changes in quarterly series are calculated from unrounded data and are displayed at annual
rates, unless otherwise specified. For details, see the FAQ “How is average annual growth calculated?”
Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index
numbers with a specified reference year equal to 100 (currently 2009). Quantity and price indexes are
calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent
periods (quarters for quarterly data and annuals for annual data). “Real” dollar series are calculated by
multiplying the published quantity index by the current dollar value in the reference year (2009) and
then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels
are conceptually the same; any differences are due to rounding.
Chained-dollar values are not additive because the relative weights for a given period differ from those
of the reference year. In tables that display chained-dollar values, a “residual” line shows the difference
between the sum of detailed chained-dollar series and its corresponding aggregate.
Updates to GDP
BEA releases three vintages of the current quarterly estimate for GDP: "Advance" estimates are
released near the end of the first month following the end of the quarter and are based on source data
that are incomplete or subject to further revision by the source agency; “second” and “third” estimates
are released near the end of the second and third months, respectively, and are based on more detailed
and more comprehensive data as they become available.
Annual and comprehensive updates are typically released in late July. Annual updates generally cover at
least the 3 most recent calendar years (and their associated quarters) and incorporate newly available
major annual source data as well as some changes in methods and definitions to improve the accounts.
Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major
periodic source data, as well as major conceptual improvements.
The table below shows the average revisions to the quarterly percent changes in real GDP between
different estimate vintages, without regard to sign.
Vintage Average Revision Without Regard to Sign
(percentage points, annual rates)
Advance to second 0.5
Advance to third 0.6
Second to third 0.2
Advance to latest 1.1
Note - Based on estimates from 1993 through 2015. For more information on GDP updates, see Revision
Information on the BEA Web site.
The larger average revision from the advance to the latest estimate reflects the fact that periodic
comprehensive updates include major statistical and methodological improvements.
Unlike GDP, an advance current quarterly estimate of GDI is not released because data on domestic
profits and on net interest of domestic industries are not available. For fourth quarter estimates, these
data are not available until the third estimate.
Story 1: Good Solid March Jobs Report — U-3 Unemployment Rate 4.7% — U-6 Unemployment Rate 9.2% — Labor Participation Rate 63.0% — Non-Farm Payroll Jobs Created 235,000 — Videos
February Jobs Report A Win For Trump’s First Full Month
Analysis: Strong February Jobs Report
MSNBC’s Eisen: February Report Shows “Healthy Job Growth,” Higher Confidence Translating Into Jobs
MSNBC’s Ali Velshi: February Jobs Report “A Very Big Deal,” Hiring Is Up From 2016
WH: THIS TIME, TRUMP BELIEVES JOBS REPORT IS REAL | CNN NEWSROOM
TRUMP’S FIRST FULL JOBS REPORT BEATS EXPECTATIONS | CNN KATE BOLDUAN
The First Trump-Era Jobs Report Shows Gains, Unemployment Down | CNBC
Media Trump Fatigue and How the Left Blew Its Chance Again
Civilian Labor Force
Labor Force Statistics from the Current Population Survey
Series Id: LNS11000000
Series title: (Seas) Civilian Labor Force Level
Labor force status: Civilian labor force
Type of data: Number in thousands
Age: 16 years and over
1 : Data affected by changes in population controls.
Series Id: LNS12000000
Series title: (Seas) Employment Level
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over
1 : Data affected by changes in population controls.
Series Id: LNS13000000
Series title: (Seas) Unemployment Level
Labor force status: Unemployed
Type of data: Number in thousands
Age: 16 years and over
Not In Labor Force
Series Id: LNS15000000
Series title: (Seas) Not in Labor Force
Labor force status: Not in labor force
Type of data: Number in thousands
Age: 16 years and over
U-3 Unemployment Rate
Series Id: LNS14000000
Series title: (Seas) Unemployment Rate
Labor force status: Unemployment rate
Type of data: Percent or rate
Age: 16 years and over
U-6 Unemployment Rate
Series Id: LNS13327709
Series title: (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status: Aggregated totals unemployed
Type of data: Percent or rate
Age: 16 years and over
Percent/rates: Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached
Civilian Labor Force Participation Rate
Series Id: LNS11300000
Series title: (Seas) Labor Force Participation Rate
Labor force status: Civilian labor force participation rate
Type of data: Percent or rate
Age: 16 years and over
Series Id: LNS12300000
Series title: (Seas) Employment-Population Ratio
Labor force status: Employment-population ratio
Type of data: Percent or rate
Age: 16 years and over
Average Weeks Unemployed
Series Id: LNS13008275
Series title: (Seas) Average Weeks Unemployed
Labor force status: Unemployed
Type of data: Number of weeks
Age: 16 years and over
Median Weeks Unemployed
Series Id: LNS13008276
Series title: (Seas) Median Weeks Unemployed
Labor force status: Unemployed
Type of data: Number of weeks
Age: 16 years and over
Employment Situation Summary
Transmission of material in this release is embargoed until USDL-17-0300
8:30 a.m. (EST) Friday, March 10, 2017
Household data: (202) 691-6378 * email@example.com * www.bls.gov/cps
Establishment data: (202) 691-6555 * firstname.lastname@example.org * www.bls.gov/ces
Media contact: (202) 691-5902 * PressOffice@bls.gov
THE EMPLOYMENT SITUATION -- FEBRUARY 2017
Total nonfarm payroll employment increased by 235,000 in February, and the
unemployment rate was little changed at 4.7 percent, the U.S. Bureau of
Labor Statistics reported today. Employment gains occurred in construction,
private educational services, manufacturing, health care, and mining.
Household Survey Data
The number of unemployed persons, at 7.5 million, changed little in February.
The unemployment rate, at 4.7 percent, was little changed over the month but
was down from 4.9 percent a year earlier. (See table A-1.)
Among the major worker groups, the unemployment rate decreased for Whites to
4.1 percent in February, while the jobless rates for adult men (4.3 percent),
adult women (4.3 percent), teenagers (15.0 percent), Blacks (8.1 percent),
Asians (3.4 percent), and Hispanics (5.6 percent) showed little or no change.
(See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) was
essentially unchanged at 1.8 million in February and accounted for 23.8 percent
of the unemployed. Over the year, the number of long-term unemployed was down
by 358,000. (See table A-12.)
In February, the labor force participation rate, at 63.0 percent, and the
employment-population ratio, at 60.0 percent, showed little change. (See table A-1.)
The number of persons employed part time for economic reasons (sometimes
referred to as involuntary part-time workers) was little changed at 5.7 million
in February. These individuals, who would have preferred full-time employment,
were working part time because their hours had been cut back or because they
were unable to find full-time jobs. (See table A-8.)
In February, 1.7 million persons were marginally attached to the labor force,
little different from a year earlier. (The data are not seasonally adjusted.)
These individuals were not in the labor force, wanted and were available for
work, and had looked for a job sometime in the prior 12 months. They were not
counted as unemployed because they had not searched for work in the 4 weeks
preceding the survey. (See table A-16.)
Among the marginally attached, there were 522,000 discouraged workers in February,
little changed from a year earlier. (The data are not seasonally adjusted.)
Discouraged workers are persons not currently looking for work because they
believe no jobs are available for them. The remaining 1.2 million persons
marginally attached to the labor force in February had not searched for work for
reasons such as school attendance or family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment increased by 235,000 in February. Job gains
occurred in construction, private educational services, manufacturing, health care,
and mining. (See table B-1.)
In February, construction employment increased by 58,000, with gains in specialty
trade contractors (+36,000) and in heavy and civil engineering construction
(+15,000). Construction has added 177,000 jobs over the past 6 months.
Employment in private educational services rose by 29,000 in February, following
little change in the prior month (-5,000). Over the year, employment in the
industry has grown by 105,000.
Manufacturing added 28,000 jobs in February. Employment rose in food manufacturing
(+9,000) and machinery (+7,000) but fell in transportation equipment (-6,000). Over
the past 3 months, manufacturing has added 57,000 jobs.
Health care employment rose by 27,000 in February, with a job gain in ambulatory
health care services (+18,000). Over the year, health care has added an average
of 30,000 jobs per month.
Employment in mining increased by 8,000 in February, with most of the gain occurring
in support activities for mining (+6,000). Mining employment has risen by 20,000
since reaching a recent low in October 2016.
Employment in professional and business services continued to trend up in February
(+37,000). The industry has added 597,000 jobs over the year.
Retail trade employment edged down in February (-26,000), following a gain of 40,000
in the prior month. Over the month, job losses occurred in general merchandise stores
(-19,000); sporting goods, hobby, book, and music stores (-9,000); and electronics
and appliance stores (-8,000).
Employment in other major industries, including wholesale trade, transportation and
warehousing, information, financial activities, leisure and hospitality, and
government, showed little or no change over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at
34.4 hours in February. In manufacturing, the workweek was unchanged at 40.8 hours,
and overtime remained at 3.3 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls has been 33.6 hours since August
2016. (See tables B-2 and B-7.)
In February, average hourly earnings for all employees on private nonfarm payrolls
increased by 6 cents to $26.09, following a 5-cent increase in January. Over the year,
average hourly earnings have risen by 71 cents, or 2.8 percent. In February, average
hourly earnings of private-sector production and nonsupervisory employees increased
by 4 cents to $21.86 in February. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for December was revised down from
+157,000 to +155,000, and the change for January was revised up from +227,000 to
+238,000. With these revisions, employment gains in December and January combined
were 9,000 more than previously reported. Monthly revisions result from additional
reports received from businesses since the last published estimates and from the
recalculation of seasonal factors. Over the past 3 months, job gains have averaged
209,000 per month.
The Employment Situation for March is scheduled to be released on
Friday, April 7, 2017, at 8:30 a.m. (EDT).
Employment Situation Summary Table A. Household data, seasonally adjusted
Summary table A. Household data, seasonally adjusted[Numbers in thousands]
Civilian noninstitutional population
Civilian labor force
Not in labor force
Total, 16 years and over
Adult men (20 years and over)
Adult women (20 years and over)
Teenagers (16 to 19 years)
Black or African American
Hispanic or Latino ethnicity
Total, 25 years and over
Less than a high school diploma
High school graduates, no college
Some college or associate degree
Bachelor’s degree and higher
Reason for unemployment
Job losers and persons who completed temporary jobs
Duration of unemployment
Less than 5 weeks
5 to 14 weeks
15 to 26 weeks
27 weeks and over
Employed persons at work part time
Part time for economic reasons
Slack work or business conditions
Could only find part-time work
Part time for noneconomic reasons
Persons not in the labor force (not seasonally adjusted)
Marginally attached to the labor force
– Over-the-month changes are not displayed for not seasonally adjusted data.
NOTE: Persons whose ethnicity is identified as Hispanic or Latino may be of any race. Detail for the seasonally adjusted data shown in this table will not necessarily add to totals because of the independent seasonal adjustment of the various series. Updated population controls are introduced annually with the release of January data.
Employment Situation Summary Table B. Establishment data, seasonally adjusted
Summary table B. Establishment data, seasonally adjusted
Footnotes (1) Includes other industries, not shown separately. (2) Data relate to production employees in mining and logging and manufacturing, construction employees in construction, and nonsupervisory employees in the service-providing industries. (3) The indexes of aggregate weekly hours are calculated by dividing the current month’s estimates of aggregate hours by the corresponding annual average aggregate hours. (4) The indexes of aggregate weekly payrolls are calculated by dividing the current month’s estimates of aggregate weekly payrolls by the corresponding annual average aggregate weekly payrolls. (5) Figures are the percen of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment. (p) Preliminary
NOTE: Data have been revised to reflect March 2016 benchmark levels and updated seasonal adjustment factors.
America’s Labor Market Is Getting Better by Almost Any Measure
March 10, 2017, 10:27 AM CST March 10, 2017, 11:22 AM CST
Payrolls, wages, workforce participation all show improvement
‘Strong reasons for optimism’ in report, economist says
A Deep Dive Into the February U.S. Jobs Report
America’s labor market might not be as great yet as President Donald Trump wants, but by almost any measure, it’s getting better.
Employers added an above-forecast 235,000 positions in February, while measures of joblessness and underemployment improved, the Labor Department’s monthly report showed on Friday. Wage growth picked up and the share of prime-age Americans in the labor force rose to the highest since 2011, suggesting the economy’s strength is drawing people off the sidelines.
“If you dig a bit deeper, there are three strong reasons for optimism: in the weather-adjusted data, in the wage growth and in the unemployment and participation rate,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics in New York.
Daco estimated that “weather-sensitive sectors” added about 75,000 jobs in February. Construction jobs rose by 58,000, the strongest gain in almost a decade, and followed a 40,000 increase in January.
The report reinforces prospects for two more Fed rate hikes this year following an anticipated move next week, while giving Trump a political boost with numbers that represent his first full month in office. “GREAT AGAIN: +235,000,” Trump posted on his Twitter account in a retweet of a Drudge Report headline and link to a Bloomberg News article on the employment data.
Goods-producing industries, which include mining, construction and manufacturing, added 95,000 jobs in February, the most since 2000. The latest figures are “consistent with the cyclical upturn in industrial activity around year-end” in the U.S. and other developed economies, said Michael Gapen, chief U.S. economist at Barclays Plc in New York.
Consumer and business optimism for the economy have surged since Trump’s election, and that could result in a “modest boost in hiring,” but it will take actual policy changes to drive investment by companies, Gapen said. Such spending has been relatively lackluster over the past year.
“Yes, the sentiment has improved and equity valuations have risen, financial conditions have eased,” said Gapen, who previously worked at the Fed. “The longer that stays around, yes, you’d expect it to matriculate into some hard data, including labor market data. But at some point, you have to have the policies — otherwise that sentiment will reverse.”
Trump, who called the main unemployment rate “phony” during the campaign, can take comfort from improvement in several other gauges of the labor market.
The prime-age participation rate, which covers people ages 25 to 54, is a measure that Trump had previously highlighted as deteriorating under President Barack Obama. That level rose to 81.7 percent in February, up from 80.6 percent in September 2015, which matched the lowest since 1984.
Another measure of labor market slack, the U-5 rate, fell to 5.7 percent from 5.8 percent, matching the lowest level since 2007. Cited as an alternative indicator by Treasury Secretary Steven Mnuchin, the rate includes discouraged workers as well other so-called marginally attached workers, who aren’t working or actively looking for work but want a job.
The U-6, or underemployment rate, fell to 9.2 percent, which matched the lowest figure since 2008. That rate also includes part-time employees who want full-time work.
While not all the February data were strong — retail jobs fell 26,000, reversing part of a gain of almost 40,000 in January — economists saw many encouraging signs in the data, from hiring to the pickup in wages and rising participation.
“We read the report as strong in all categories and expect it will give the Fed more confidence in pursuing three rate hikes this year,” Citigroup Inc.’s Andrew Hollenhorst and Andrew Labelle said in a note.
Trump Points to Drudge’s ‘Great Again’ Praise of New Jobs Report
March 10, 2017, 8:08 AM CST March 10, 2017, 1:25 PM CST
Payrolls grow by 235,000 in first full month of his term
President had disparaged figures showing growth under Obama
A Deep Dive Into the February U.S. Jobs Report
President Donald Trump seized on the first federal jobs report of his presidency to promote a narrative of an invigorated economy that may strengthen his political position as he begins the drive to win passage of legislative priorities including an Obamacare replacement and a tax overhaul.
The president and his staff exalted in a 235,000 net increase in U.S. jobs during February, even making light of doubts Trump previously cast on government data showing employment improvements under President Barack Obama.
“He said to quote him very clearly,” White House press secretary Sean Spicer said Trump had told him, “They may have been phony in the past, but it’s very real now.”
“GREAT AGAIN: +235,000,” Trump posted on his Twitter account in a retweet of a Drudge Report headline on Friday minutes after the Bureau of Labor Statistics released payrolls data.
Gary Cohn, the former Goldman Sachs Group Inc. president who’s now director of the National Economic Council, used the report as validation of Trump’s approach to bolstering the economy, which has included bringing in corporate executives to the White House to press them for hiring commitments and publicly scolding companies over plans to move production abroad.
“We’ve had many big announcements from CEOs,” Cohn said, basking in the “sunny” jobs numbers amid gray skies and rain in Washington. “Remember, those jobs are not in these numbers. Those jobs will come in the future — they’ll come three, six, 12 months from now. So we think there’s enormous demand for American workers built into the system.”
Spicer said the jobs report, in which the unemployment rate declined to 4.7 percent, was “great news.”
“Not a bad way to start day 50 of this Administration,” Spicer tweeted at 8:57 a.m.
With his tweet minutes after the data was released and before markets opened, Spicer may have run afoul of a federal rule barring executive branch employees from publicly commenting on economic indicators in the first hour after the numbers are published.
The rule, which was published in the Federal Register in 1985, says that “employees of the executive branch shall not comment publicly on the data until at least one hour after the official release time.” The White House gets the number before the release. It’s unclear whether Trump’s retweet of Drudge would be considered a comment, but his predecessors observed the rule.
Spicer, at his daily White House briefing, dismissed any concern about potentially violating the rule, which he claimed was instituted to avoid affecting financial markets. He said his and Trump’s tweets simply highlighted good news for the economy that already was being widely reported.
“I don’t think that’s exactly a market disruption,” Spicer said. “I apologize if we were a little excited” about so many Americans getting work.
Jason Furman, chairman of the Council of Economic Advisers during the Obama administration, said previous administrations from both parties abided by the one-hour rule. Obama occasionally changed his schedule to comply with it, he said.
“We would even inconvenience ourselves in the Obama administration,” he said in an email. “There were times that the president’s schedule was shifted, including (small) delays to flights taking off because he had to wait until 9:30 a.m. to comment on the data.”
The payroll increase in February was actually slightly lower than the same month the two prior years — jobs increased by 237,000 in February 2016 and by 238,000 in February 2015.
Yet the numbers were an improvement on 187,000 monthly average during the final year of Obama’s presidency and were greeted as a positive signal by investors, sending U.S. stocks up modestly at the session’s opening. The uptick faded, though, and the benchmark Standard & Poor’s 500 index was up less than 0.1 percent at 12:54 p.m. New York time.
That was enough to reverse the prior skepticism Trump has shown for official federal employment data.
After the New Hampshire presidential primary last year, Trump said, “Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.”
With the release of the jobs data in October 2012, just ahead of Obama’s re-election, Trump said: “I don’t believe the number and neither do any of the other people that have intelligence.”
Trump also released a video praising Exxon Mobil Corp. for announcing a $20 billion building spree that would create 45,000 jobs along the Gulf Coast. While the announcement dates back to plans the company was making as early as 2013, Trump took credit, saying it was a sign his policies were already working.
“I said we’re bringing back jobs,” he said in the March 6 video. “This is one big example of it.”