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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.
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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.
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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.
Russia ‘moves troops, helicopters and armoured vehicles’ to its border with North Korea
‘New weapons’ displayed during military parade in North Korea to celebrate Kim Il SungA symphony orchestra played as one of Kim’s missiles hurtled into the US and revealed a smouldering Stars and Stripes flag.
Military figures watched on gleefully as uniformed troops from the Korean State Merited Chorus belted out a series of tuneless numbers.
And in a verse unlikely to make its way onto Broadway any time soon, one warbled: “Our proud Hwasong rocket blasts off” and “it flies as quickly as a flash of lightning to challenge imperialism”.
Others played trumpets as the 90s-style film saw a ballistic missile roar into America.
Accompanying it are the words: “If US imperialists move an inch toward us, we will immediately hit them with nukes.”
The bizarre video was played at the 105th birthday celebration of Kim’s late grandfather Kim Il-Sung at the weekend.
His regime had earlier that day put on a huge military procession to show off the country’s ballistic missile arsenal.
North Korea propaganda video shows US aircraft carrier being blown up
Story 2: Obama’s Iran Nuclear Agreement Legacy Heading Towards The Wastebasket? No. Certification Granted and Sanctions Suspended — All Talk–No Action — Bad Appeasement Deal Stands — Videos —
The Iran Nuclear Deal
How the Iran nuclear deal works, explained in 3 minutes
Iran and the Bomb
Published on May 12, 2014
Many countries have nuclear weapons, and many more want them. Only one, though, has its neighbors and the world terrified. That country is Iran. Why is everyone so concerned? Because the Islamic theocracy has repeatedly threatened to destroy Israel, sponsors global terrorism, and would leverage the deterrence effect of a nuclear weapon to advance their anti-Western and anti-American interests. Bret Stephens, foreign affairs columnist for the Wall Street Journal explains the one thing you really need to know in order to understand why we can’t let Iran get the bomb–they may actually use it.
The Iran Nuclear Deal Explained
The Iran Nuclear Deal Explained
Donald Trump on Iran Nuclear Agreement (C-SPAN)
Trump on Iran: ‘They will know I am not playing games’
Donald Trump on nuke deal: They are laughing at us in Iran
Sec. Rex Tillerson Warns ‘Unchecked’ Iran Could Follow Path Of North Korea | NBC Nightly News
Trump administration certifies Iran compliant with nuclear deal – donald trump news
Tillerson announces NSC will review the Iran nuclear deal
Secretary of State Rex Tillerson says Iran could be the next North Korea
Tillerson Threatens Iran: ‘The Great Destabilizer’?
Trump Shies Away From Striking Down Obama Era Iran Deal: Why It Doesn’t Matter
What’s In The Iran Nuclear Deal?
Implementation of the JCPOA: Is It Working?
Tillerson Toughens Tone on Iran After U.S. Confirms Nuclear Deal Compliance
By GARDINER HARRIS APRIL 19, 2017
President Trump at the White House on Wednesday. During the 2016 campaign, he denounced the nuclear agreement with Iran as “the worst deal ever.”CreditAl Drago/The New York Times
WASHINGTON — Secretary of State Rex W. Tillerson described a landmark Iran nuclear deal as a failure on Wednesday, only hours after the State Department said Tehran was complying with its terms. But the top United States diplomat stopped short of threatening to jettison the 2015 agreement that was brokered by world powers, or saying whether the Trump administration would punish Iran with new sanctions.
The whiplash left Republicans on Capitol Hill, who had universally excoriated the agreement to limit Iran’s nuclear program and voted against its implementation, uncertain of how to respond. Its architects, however, said they were cautiously optimistic that the deal would stay in place.
The nuclear deal “fails to achieve the objective of a non-nuclear Iran,” Mr. Tillerson said. “It only delays their goal of becoming a nuclear state.”
He said that Iran continued to threaten the United States and the rest of the world, and he announced that the Trump administration was reviewing ways to counter challenges posed by Tehran.
It was an attempt to clarify a State Department certification, issued shortly before a midnight deadline on Tuesday, that said Iran was complying with the nuclear agreement that also eased crippling international sanctions against the Islamic republic’s economy. During the 2016 campaign, President Trump denounced the agreement as “the worst deal ever,” and Vice President Pence promised to rip it up.
In a hastily called news conference at the State Department on Wednesday, Mr. Tillerson likened Iran to North Korea, whose nuclear weaponry and burgeoning missile technology is what the administration now believes is the gravest risk to world peace and security. Mr. Pence visited Seoul, South Korea, this week to declare that the United States was united with its allies to stem North Korea’s threat.
The Iran deal “represents the same failed approach to the past that brought us to the current imminent threat that we face from North Korea,” Mr. Tillerson told reporters. “The Trump administration has no intention of passing the buck to a future administration on Iran. The evidence is clear: Iran’s provocative actions threaten the United States, the region and the world.”
Once the National Security Council completes a review of the nuclear deal, Mr. Tillerson said, “we will meet the challenges Iran poses with clarity and conviction.”
Hours earlier, late on Tuesday night, Mr. Tillerson sent a terse letter to Speaker Paul D. Ryan pledging to evaluate whether earlier suspension of sanctions against Iran, as required under the terms of the nuclear agreement, “is vital to the national security interests of the United States.”
A man of few words, Mr. Tillerson has sometimes found that his cryptic remarks create more confusion than clarity among allies, friends and even adversaries. Earlier on Wednesday, Sean Spicer, the White House press secretary, offered little additional information about the Iran certification. He refused to say whether the Trump administration would add the Iran deal to a series of other stunning foreign policy reversals it has made by deciding to retain it instead of ripping it up or renegotiating the agreement as promised.
“I think part of the review, the interagency process, is to determine where Iran is in compliance with the deal and to make recommendations to the president on the path forward,” Mr. Spicer said.
The enigmatic remarks left top Republicans on Capitol Hill nonplused. Senator Tom Cotton, the Arkansas Republican who led congressional opposition to the Iran deal, said in a statement that the administration’s “certification is shaky, and it doesn’t mean that the intentions behind Iran’s nuclear program are benign.”
Senator Bob Corker, Republican of Tennessee and chairman of the Foreign Relations Committee, said the Trump administration appeared to be preparing a tougher line against Iran.
“Secretary Tillerson made clear that regardless of Iran’s technical compliance with the nuclear deal, the administration is under no illusion about the continued threat from Tehran and is prepared to work closely with Congress to push back,” Mr. Corker said in a statement on Wednesday.
Tuesday’s certification extends sanctions relief for Iran in exchange for continued constraints on its nuclear program. American sanctions, as approved by Congress, were suspended instead of revoked; they can be reimposed with the stroke of a presidential pen.
The Trump administration has given itself 90 days to complete its review, but it will need to make a series of decisions in coming weeks about whether to continue its support of the deal, which was also brokered with Britain, China, France, Germany and Russia. Those governments, along with representatives of the United States and Iran, will meet next week in Vienna to review the pact’s progress.
Mr. Trump faces a mid-May deadline, as imposed by Congress, to decide whether to continue the suspension of sanctions.
Backing away from the agreement would spur enormous consternation across Europe and in Moscow.
In their first congratulatory phone calls to Mr. Trump after his electoral victory, both President Vladimir V. Putin of Russia and Chancellor Angela Merkel of Germany emphasized the need to keep the Iran deal in place. And after her first meeting with Mr. Tillerson in February, Federica Mogherini, the European Union’s foreign minister, said the Trump administration pledged “to stick to the full strict implementation of the agreement in all its parts.”
Analysts and former government officials said it was unlikely the Trump administration would renounce the Iran agreement.
“I’m glad this deal has held up to this point, and I hope it continues to hold up,” said Wendy Sherman, a former under secretary of state who was deeply involved in negotiating terms of the deal during the Obama administration.
Robert Einhorn, a senior fellow at the Brookings Institution who was involved in Iran policy under President Barack Obama, said it was “pretty much a foregone conclusion” that Mr. Trump would keep the nuclear agreement in place.
Still, the administration has sought since its first days in office to ratchet up pressure on Iran. In January, before he resigned, Michael T. Flynn, then the national security adviser, walked into the White House briefing room and declared that the administration was “officially putting Iran on notice” after it launched a ballistic missile.
The Trump administration has returned the United States to closer ties with its traditional Arab friends in the Middle East, including Saudi Arabia and the United Arab Emirates. Part of those ties means supporting those nations, which are overwhelmingly Sunni Muslim, in their intense rivalry with Iran, a Shiite power.
By contrast, by the end of his second term, Mr. Obama had begun to view those sectarian tensions with a jaundiced eye, believing the United States should not intervene in a millennium-old religious struggle.
Earlier on Wednesday, Mr. Tillerson attended a United States-Saudi Arabia chief executive summit meeting where he declared that he was “pleased to be here today to reaffirm the very strong partnership that exists between the United States and the kingdom of Saudi Arabia.”
Mark Dubowitz, chief executive of the Foundation for Defense of Democracies, a group that sought to defeat the Iran deal, said the administration may still walk away from the agreement or renegotiate it. He contended that the administration “should not be bound by arms control agreements that are deeply flawed.”
And even Ms. Sherman shied away from predicting it will remain in place. “I’m taking this one day at a time,” she said.
Formal negotiations toward the Joint Comprehensive Plan of Action on Iran’s nuclear program began with the adoption of the Joint Plan of Action, an interim agreement signed between Iran and the P5+1 countries in November 2013. For the next twenty months, Iran and the P5+1 countries engaged in negotiations, and in April 2015 agreed on an Iran nuclear deal framework for the final agreement and in July 2015, Iran and the P5+1 agreed on the plan.
Under the agreement, Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges for 13 years. For the next 15 years, Iran will only enrich uranium up to 3.67%. Iran also agreed not to build any new heavy-water facilities for the same period of time. Uranium-enrichment activities will be limited to a single facility using first-generation centrifuges for 10 years. Other facilities will be converted to avoid proliferation risks. To monitor and verify Iran’s compliance with the agreement, the International Atomic Energy Agency (IAEA) will have regular access to all Iranian nuclear facilities. The agreement provides that in return for verifiably abiding by its commitments, Iran will receive relief from U.S., European Union, and United Nations Security Council nuclear-related economic sanctions.
In 1979, the Iranian Revolution took place, and Iran’s nuclear program, which had developed some baseline capacity, fell to disarray as “much of Iran’s nuclear talent fled the country in the wake of the Revolution.” Ayatollah Ruhollah Khomeini was initially opposed to nuclear technology; and Iran engaged in a costly war with Iraq from 1980 to 1988.
Starting in the later 1980s, Iran restarted its nuclear program, with assistance from Pakistan (which entered into a bilateral agreement with Iran in 1992), China (which did the same in 1990), and Russia (which did the same in 1992 and 1995), and from the A.Q. Khan network. Iran “began pursuing an indigenous nuclear fuel cycle capability by developing a uranium mining infrastructure and experimenting with uranium conversion and enrichment.” According to the nonpartisan Nuclear Threat Initiative, “U.S. intelligence agencies have long suspected Iran of using its civilian nuclear program as a cover for clandestine weapons development.” Iran, in contrast, “has always insisted that its nuclear work is peaceful”.
In August 2002, the Paris-based National Council of Resistance of Iran, an Iranian dissident group, publicly revealed the existence of two undeclared nuclear facilities, the Arak heavy-water production facility and the Natanz enrichment facility. In February 2003, Iranian President Mohammad Khatami acknowledged the existence of the facilities and asserted that Iran had undertaken “small-scale enrichment experiments” to produce low-enriched uranium for nuclear power plants. In late February, International Atomic Energy Agency (IAEA) inspectors visited Natanz. In May 2003, Iran allowed IAEA inspectors to visit the Kalaye Electric Company, but refused to allow them to take samples, and an IAEA report the following month concluded that Iran had failed to meet its obligations under the previous agreement.
In June 2003, Iran—faced with the prospect of being referred to the UN Security Council—entered into diplomatic negotiations with France, Germany, and the United Kingdom (the EU 3). The United States refused to be involved in these negotiations. In October 2003, the Tehran Declaration was reached between Iran and the EU 3; under this declaration Iran agreed to cooperate fully with the IAEA, sign the Additional Protocol, and temporarily suspend all uranium enrichment. In September and October 2003, the IAEA conducted several facility inspections. This was followed by the Paris Agreement in November 2004, in which Iran agreed to temporarily suspend enrichment and conversion activities, “including the manufacture, installation, testing, and operation of centrifuges, and committed to working with the EU-3 to find a mutually beneficial long-term diplomatic solution”.
In August 2005, Mahmoud Ahmadinejad, a hard-liner, was elected president of Iran. He accused Iranian negotiators who had negotiated the Paris Accords of treason. Over the next two months, the EU 3 agreement fell apart as talks over the EU 3’s proposed Long Term Agreement broke down; the Iranian government “felt that the proposal was heavy on demands, light on incentives, did not incorporate Iran’s proposals, and violated the Paris Agreement”. Iran notified the IAEA that it would resume uranium conversion at Esfahan.
In February 2006, Iran ended its voluntary implementation of the Additional Protocol and resumed enrichment at Natanz, prompting the IAEA Board of Governors to refer Iran to the UN Security Council. After the vote, Iran announced it would resume enrichment of uranium. In April 2006, Ahmadinejad announced that Iran had nuclear technology, but stated that it was purely for power generation and not for producing weapons. In June 2006, the EU 3 joined China, Russia, and the United States, to form the P5+1. The following month, July 2006, the UN Security Council passed its first resolution demanding Iran stop uranium enrichment and processing.Altogether, from 2006 to 2010, the UN Security Council subsequently adopted six resolutions concerning Iran’s nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), 1835 (September 2008), and 1929 (June 2010). The legal authority for the IAEA Board of Governors referral and the Security Council resolutions was derived from the IAEA Statute and the United Nations Charter. The resolutions demanded that Iran cease enrichment activities and imposed sanctions on Iran, including bans on the transfer of nuclear and missile technology to the country and freezes on the assets of certain Iranian individuals and entities, in order to pressure the country. However, in Resolution 1803 and elsewhere the Security Council also acknowledged Iran’s rights under Article IV of the NPT, which provides for “the inalienable right … to develop research, production and use of nuclear energy for peaceful purposes”.[b]
In July 2006, Iran opened the Arak heavy water production plant, which led to one of the Security Council resolutions. In September 2009, U.S. President Barack Obama, revealed the existence of an underground enrichment facility in Fordow, near Qom saying, “Iran’s decision to build yet another nuclear facility without notifying the IAEA represents a direct challenge to the basic compact at the center of the non-proliferation regime.” Israel threatened to take military action against Iran.
In a February 2007 interview with the Financial Times, IAEA director general Mohamed ElBaradei said that military action against Iran “would be catastrophic, counterproductive” and called for negotiations between the international community and Iran over the Iranian nuclear program. ElBaradei specifically proposed a “double, simultaneous suspension, a time out” as “a confidence-building measure”, under which the international sanctions would be suspended and Iran would suspend enrichment. ElBaradei also said, “if I look at it from a weapons perspective there are much more important issues to me than the suspension of [enrichment],” naming his top priorities as preventing Iran from “go[ing] to industrial capacity until the issues are settled”; building confidence, with “full inspection” involving Iranian adoption of the Additional Protocol; and “at all costs” preventing Iran from “moving out of the [treaty-based non-proliferation] system”.
A November 2007 U.S. National Intelligence Estimate assessed that Iran “halted its nuclear weapons program” in 2003; that estimate and subsequent U.S. Intelligence Community statements also assessed that the Iranian government at the time had was “keeping open the ‘option’ to develop nuclear weapons” in the future. A July 2015 Congressional Research Service report said, “statements from the U.S. intelligence community indicate that Iran has the technological and industrial capacity to produce nuclear weapons at some point, but the U.S. government assesses that Tehran has not mastered all of the necessary technologies for building a nuclear weapon.”
In March 2013, the United States began a series of secret bilateral talks with Iranian officials in Oman, led by William Joseph Burns and Jake Sullivan on the American side and Ali Asghar Khaji on the Iranian side. In June 2013, Hassan Rouhani was elected president of Iran. Rouhani has been described as “more moderate, pragmatic and willing to negotiate than Ahmadinejad”. However, in a 2006 nuclear negotiation with European powers, Rouhani said that Iran had used the negotiations to dupe the Europeans, saying that during the negotiations, Iran managed to master the conversion of uranium yellowcake at Isfahan. The conversion of yellowcake is an important step in the nuclear fuel process. In August 2013, three days after his inauguration, Rouhani called for a resumption of serious negotiations with the P5+1 on the Iranian nuclear program. In September 2013, Obama and Rouhani had a telephone conversation, the first high-level contact between U.S. and Iranian leaders since 1979, and U.S. Secretary of State John Kerry had a meeting with Iranian foreign minister Mohammad Javad Zarif, signaling that the two countries had an opening to cooperation.
After several rounds of negotiations, on 24 November 2013, the Joint Plan of Action, an interim agreement on the Iranian nuclear program, was signed between Iran and the P5+1 countries in Geneva, Switzerland. It consisted of a short-term freeze of portions of Iran’s nuclear program in exchange for decreased economic sanctions on Iran, as the countries work towards a long-term agreement. The IAEA began “more intrusive and frequent inspections” under this interim agreement. The agreement was formally activated on 20 January 2014. On that day, the IAEA issued a report stating that Iran was adhering to the terms of the interim agreement, including stopping enrichment of uranium to 20 percent, beginning the dilution process (to reduce half of the stockpile of 20 percent enriched uranium to 3.5 percent), and halting work on the Arak heavy-water reactor.
The agreement between the P5+1+EU and Iran on the Joint Comprehensive Plan of Action (JCPOA) is the culmination of 20 months of “arduous” negotiations.
The agreement followed the Joint Plan of Action (JPA), an interim agreement between the P5+1 powers and Iran that was agreed to on 24 November 2013 at Geneva. The Geneva agreement was an interim deal, in which Iran agreed to roll back parts of its nuclear program in exchange for relief from some sanctions. This went into effect on 20 January 2014. The parties agreed to extend their talks with a first extension deadline on 24 November 2014 and a second extension deadline set to 1 July 2015.
An Iran nuclear deal framework was reached on 2 April 2015. Under this framework Iran agreed tentatively to accept restrictions on its nuclear program, all of which would last for at least a decade and some longer, and to submit to an increased intensity of international inspections under a framework deal. These details were to be negotiated by the end of June 2015. The negotiations toward a Joint Comprehensive Plan of Action were extended several times until the final agreement, the Joint Comprehensive Plan of Action, was finally reached on 14 July 2015. The JCPOA is based on the framework agreement from three months earlier.
Subsequently the negotiations between Iran and the P5+1 continued. In April 2014, a framework deal was reached at Lausanne. Intense marathon negotiations then continued, with the last session in Vienna at the Palais Coburg lasting for seventeen days. At several points, negotiations appeared to be at risk of breaking down, but negotiators managed to come to agreement. As the negotiators neared a deal, U.S. Secretary of State John Kerry directly asked Iranian Foreign Minister Mohammad Javad Zarif to confirm that he was “authorized to actually make a deal, not just by the [Iranian] president, but by the supreme leader?” Zarif gave assurances that he was.
Ultimately, on 14 July 2015, all parties agreed to a landmark comprehensive nuclear agreement. At the time of the announcement, shortly before 11:00 GMT, the agreement was released to the public.
The final agreement’s complexity shows the impact of a public letter written by a bipartisan group of 19 U.S. diplomats, experts, and others in June 2015, written when negotiations were still going on. That letter outlined concerns about the several provisions in the then-unfinished agreement and called for a number of improvements to strengthen the prospective agreement and win their support for it. After the final agreement was reached, one of the signatories, Robert J. Einhorn, a former U.S. Department of State official now at the Brookings Institution, said of the agreement: “Analysts will be pleasantly surprised. The more things are agreed to, the less opportunity there is for implementation difficulties later on.”
The final agreement is based upon (and buttresses) “the rules-based nonproliferation regime created by the Nuclear Non-Proliferation Treaty (NPT) and including especially the IAEA safeguards system.”
Souvenir signatures of lead negotiators on the cover page of the JCPOA document. The Persian handwriting on top left side is a homage by Javad Zarif to his counterparts’ efforts in the negotiations: “[I am] Sincere to Mr. Abbas [Araghchi] and Mr. Majid [Takht-Ravanchi].”
Iran’s current stockpile of low-enriched uranium will be reduced by 98 percent, from 10,000 kg to 300 kg. This reduction will be maintained for fifteen years. For the same fifteen-year period, Iran will be limited to enriching uranium to 3.67%, a percentage sufficient for civilian nuclear power and research, but not for building a nuclear weapon.However, the number of centrifuges is sufficient for a nuclear weapon, but not for nuclear power. This is a “major decline” in Iran’s previous nuclear activity; prior to watering down its stockpile pursuant to the Joint Plan of Action interim agreement, Iran had enriched uranium to near 20% (medium-enriched uranium). These enriched uranium in excess of 300 kg of up to 3.67% will be down blended to natural uranium level or be sold in return for natural uranium, and the uranium enriched to between 5% and 20% will be fabricated into fuel plates for the Tehran Research Reactor or sold or diluted to an enrichment level of 3.67%. The implementation of the commercial contracts will be facilitated by P5+1. After fifteen years, all physical limits on enrichment will be removed, including limits on the type and number of centrifuges, Iran’s stockpile of enriched uranium, and where Iran may have enrichment facilities. According to Belfer, at this point Iran could “expand its nuclear program to create more practical overt and covert nuclear weapons options”.
For ten years, Iran will place over two-thirds of its centrifuges in storage, from its current stockpile of 19,000 centrifuges (of which 10,000 were operational) to no more than 6,104 operational centrifuges, with only 5,060 allowed to enrich uranium, with the enrichment capacity being limited to the Natanz plant. The centrifuges there must be IR-1 centrifuges, the first-generation centrifuge type which is Iran’s oldest and least efficient; Iran will give up its advanced IR-2M centrifuges in this period. The non-operating centrifuges will be stored in Natanz and monitored by IAEA, but may be used to replace failed centrifuges. Iran will not build any new uranium-enrichment facilities for fifteen years.
Iran may continue research and development work on enrichment, but that work will take place only at the Natanz facility and include certain limitations for the first eight years. This is intended to keep the country to a breakout time of one year.
Iran, with cooperation from the “Working Group” (the P5+1 and possibly other countries), will modernise and rebuild the Arak heavy water research reactor based on an agreed design to support its peaceful nuclear research and production needs and purposes, but in such a way to minimise the production of plutonium and not to produce weapons-grade plutonium. The power of the redesigned reactor will not exceed 20 MWth. The P5+1 parties will support and facilitate the timely and safe construction of the Arak complex. All spent fuel will be sent out of the country. All excess heavy water which is beyond Iran’s needs for the redesigned reactor will be made available for export to the international market based on international prices. In exchange, Iran received 130 tons of uranium in 2015 and in late 2016 was approved to receive 130 tons in 2017. For 15 years, Iran will not engage in, or research on, spent fuel reprocessing. Iran will also not build any additional heavy-water reactors or accumulate heavy water for fifteen years.
Iran’s Fordow facility will stop enriching uranium and researching uranium enrichment for at least fifteen years; the facility will be converted into a nuclear physics and technology center. For 15 years, Fordow will maintain no more than 1,044 IR-1 centrifuges in six cascades in one wing of Fordow. “Two of those six cascades will spin without uranium and will be transitioned, including through appropriate infrastructure modification,” for stable radioisotope production for medical, agricultural, industrial, and scientific use. “The other four cascades with all associated infrastructure will remain idle.” Iran will not be permitted to have any fissile material in Fordow.
Iran will implement an Additional Protocol agreement which will continue in perpetuity for as long as Iran remains a party to the Nuclear Non-Proliferation Treaty (NPT). The signing of the Additional Protocol represents a continuation of the monitoring and verification provisions “long after the comprehensive agreement between the P5+1 and Iran is implemented”.
A comprehensive inspections regime will be implemented in order to monitor and confirm that Iran is complying with its obligations and is not diverting any fissile material.[c]
The IAEA will have multilayered oversight “over Iran’s entire nuclear supply chain, from uranium mills to its procurement of nuclear-related technologies“. For declared nuclear sites such as Fordow and Natanz, the IAEA will have “round-the-clock access” to nuclear facilities and will be entitled to maintain continuous monitoring (including via surveillance equipment) at such sites. The agreement authorizes the IAEA to make use of sophisticated monitoring technology, such as fiber-optic seals on equipment that can electronically send information to the IAEA; infrared satellite imagery to detect covert sites, “environmental sensors that can detect minute signs of nuclear particles”; tamper-resistant, radiation-resistant cameras. Other tools include computerized accounting programs to gather information and detect anomalies, and big data sets on Iranian imports, to monitor dual-use items.
The number of IAEA inspectors assigned to Iran will triple, from 50 to 150 inspectors.
If IAEA inspectors have concerns that Iran is developing nuclear capabilities at any non-declared sites, they may request access “to verify the absence of undeclared nuclear materials and activities or activities inconsistent with” the agreement, informing Iran of the basis for their concerns. The inspectors would only come from countries with which Iran has diplomatic relations. Iran may admit the inspectors to such site or propose alternatives to inspection that might satisfy the IAEA’s concerns. If such an agreement cannot be reached, a process running to a maximum of 24 days is triggered. Under this process, Iran and the IAEA have 14 days to resolve disagreements among themselves. If they fail to, the Joint Commission (including all eight parties) would have one week in which to consider the intelligence which initiated the IAEA request. A majority of the Commission (at least five of the eight members) could then inform Iran of the action that it would be required to take within three more days. The majority rule provision “means the United States and its European allies—Britain, France, Germany and the EU—could insist on access or any other steps and that Iran, Russia or China could not veto them”. If Iran did not comply with the decision within three days, sanctions would be automatically reimposed under the snapback provision (see below).
As a result of the above, the “breakout time”—the time in which it would be possible for Iran to make enough material for a single nuclear weapon—will increase from two to three months to one year, according to U.S. officials and U.S. intelligence.[d] An August 2015 report published by a group of experts at Harvard University‘s Belfer Center for Science and International Affairs concurs in these estimates, writing that under the JCPOA, “over the next decade would be extended to roughly a year, from the current estimated breakout time of 2 to 3 months”. The Center for Arms Control and Non-Proliferation also accepts these estimates. By contrast, Alan J. Kuperman, coordinator of the Nuclear Proliferation Prevention Project at the University of Texas at Austin, disputed the one-year assessment, arguing that under the agreement, Iran’s breakout time “would be only about three months, not much longer than it is today”.
The longer breakout time would be in place for at least ten years; after that point, the breakout time would gradually decrease. By the fifteenth year, U.S. officials state that the breakout time would return to the pre-JCPOA status quo of a few months. The Belfer Center report states: “Some contributors to this report believe that breakout time by year 15 could be comparable to what it is today—a few months—while others believe it could be reduced to a few weeks.”
Reuters reported that exemptions were granted to Iran prior to January 16, 2016. The reported purpose of the exemptions was so that sanctions relief and other benefits could start by that date, instead of Iran being in violation. The exemptions included: (a) Iran able to exceed the 300 Kg of 3.5% LEU limit in the agreement; (b) Iran able to exceed the zero Kg of 20% LEU limit in the agreement; (c) Iran to keep operating 19 “hot cells” that exceed the size limit in the agreement; (d) Iran to maintain control of 50 tonnes of heavy water that exceed the 130 tonne limit in the agreement by storing the excess at an Iran-controlled facility in Oman. In December 2016, the IAEA published decisions of the Joint Commission that spell out these clarifications of the JCPOA.
Eight years into the agreement, EU sanctions against a number of Iranian companies, individuals and institutions (such as the Revolutionary Guards) will be lifted.
The United States will “cease” application of its nuclear-related secondary sanctions by presidential action or executive waiver.Secondary sanctions are those that sanction other countries for doing business with Iran. Primary U.S. sanctions, which prohibit U.S. firms from conducting commercial transactions with few exceptions, are not altered by the JCPOA.
This step is not tied to any specific date, but is expected to occur “roughly in the first half of 2016”.
However, all U.S. sanctions against Iran related to alleged human rights abuses, missiles, and support for terrorism are not affected by the agreement and will remain in place. U.S. sanctions are viewed as more stringent, since many have extraterritorial effect (i.e., they apply worldwide). EU sanctions, by contrast, apply only in Europe.
No new UN or EU nuclear-related sanctions or restrictive measures will be imposed.
If Iran violates the agreement, any of the P5+1 can invoke a “snap back” provision, under which the sanctions “snap back” into place (i.e., are reimplemented).
Specifically, the JCPOA establishes the following dispute resolution process: if a party to the JCPOA has reason to believe that another party is not upholding its commitments under the agreement, then the complaining party may refer its complaint to the Joint Commission, a body created under the JCPOA to monitor implementation. If a complaint made by a non-Iran party is not resolved to the satisfaction of the complaining party within thirty-five days of referral, then that party could treat the unresolved issue as grounds to cease performing its commitments under the JCPOA, notify the United Nations Security Council that it believes the issue constitutes significant non-performance, or both. The Security Council would then have thirty days to adopt a resolution to continue the lifting of sanctions. If such a resolution is not adopted within those thirty days, then the sanctions of all of the pre-JCPOA nuclear-related UN Security Council resolutions would automatically be re-imposed. Iran has stated that in such a case, it would cease performing its nuclear obligations under the deal. The effect of this rule is that any permanent member of the Security Council (United States, United Kingdom, China, Russia and France) can veto any ongoing sanctions relief, but no member can veto the re-imposition of sanctions.
Snapback sanctions “would not apply with retroactive effect to contracts signed between any party and Iran or Iranian individuals and entities prior to the date of application, provided that the activities contemplated under and execution of such contracts are consistent with this JCPOA and the previous and current UN Security Council resolutions”.
Ankit Panda of The Diplomat states that this will make impossible any scenario where Iran is non-compliant with the JCPOA yet escapes re-imposition of sanctions. Mark Dubowitz of the Foundation for Defense of Democracies (which opposes the agreement) argues, however, that because the JCPOA provides that Iran could treat reinstatement of sanctions (in part or entirely) as grounds for leaving the agreement, the United States would be reluctant to impose a “snapback” for smaller violations: “The only thing you’ll take to the Security Council are massive Iranian violations, because you’re certainly not going to risk the Iranians walking away from the deal and engaging in nuclear escalation over smaller violations.”
Pictured here, Iranian foreign affairs minister and U.S. secretary of state shaking hands at the end of negotiations on 14 July 2015, Vienna. They shook hands on 26 September 2013 in the United Nations Headquarters for the first time.
Story 3: Radical Islamic Terrorist Attack In Paris, France Target Police One Officer Killed and One Wounded and One Shooter Killed and One Escaped — Videos —
One Officer Killed, One Wounded In Paris Shooting | NBC News
Trump Says Paris Shooting Looks Like Terror Attack
BREAKING Paris ISLAMIC Terrorist with Machine Gun kills police officer 2nd hurt April 20 2017 News
BREAKING!!! TERROR ATTACK IN PARIS!!!
Paris shooting ‘looks like another terrorist attack’ Trump says: ‘It just never ends’
The U.S. president addressed the assault on two police officers at a news conference Thursday afternoon in the White House’s East Room
French police say the incident involving at least two gunman was probably a ‘terrorist act’
‘We have to be strong, and we have to be vigilant, and I’ve been saying it for a long time,’ Trump said
By Francesca Chambers, White House Correspondent For Dailymail.com
PUBLISHED: 16:23 EDT, 20 April 2017 | UPDATED: 17:26 EDT, 20 April 2017
President Donald Trump says a shooting in Paris today ‘looks like another terrorist attack.’
The U.S. president addressed the assault on two police officers at a news conference Thursday afternoon.
‘It just never ends,’ he said of the terror threat from the White House’s East Room.
French police say the incident involving at least two gunman was probably a ‘terrorist act.’
President Donald Trump says a shooting in Paris today ‘looks like another terrorist attack.’
White House press secretary Sean Spicer said just before the news conference began that Trump had been briefed on the shooting that happened while he was meeting with the Italian prime minister.
‘Condolences from our country to the people for France again. It’s happening it seems,’ Trump said from the podium. ‘I just saw it as I was walking in, so it’s a terrible thing and it’s a very, very terrible thing that’s going on in the world today.’
Trump did not comment on the assault at the top of his remarks but said after he was asked for a reaction, ‘It looks like another terrorist attack, and what can you say? It just never ends.
‘We have to be strong, and we have to be vigilant, and I’ve been saying it for a long time,’ Trump told Fox News’ John Roberts.
France is in the process of holding a national election. The first round of voting begins on April 23.
A gunman wielding an AK-47 killed one police officer and wounded another today on the Champs-Elysees. The assailant was killed in the showdown with police, Paris police have said. Another suspect is believed to have been involved, as well.
Police just two days ago 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 and 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.
‘Stay back, stay back!’ Police warn after shooting in Paris
Police closed off the popular avenue (pictured) after a policeman was killed during a shooting incident in the French capital
A French police officer was tonight shot dead on the Champs Elysees in Paris (pictured) – just as presidential candidates took part in a TV debate nearby
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 Emanuel Macron and National Front (FN) leader Marine Le Pen have been out in front.
Scandal-plagued conservative Francois Fillon and far-left firebrand Jean-Luc Melenchon have closed the gap substantially in the last two weeks.
Opinion polls now show there is a chance that any of the four leading candidates could reach the second-round run-off on May 7 if none of them reach a majority in this weekend’s election.
Footage potentially show s the moments after the Paris shootingPolice say the suspect was from an eastern Paris in suburb, despite ISIS naming him as a Belgian national on their Amaq news agency.
He is thought to have been known to security services for “extremist links”.
The shooter’s house in an eastern Paris suburb and other addresses are being searched by officers, a source told Reuters.
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Cops have said they are hunting a second suspect who may or may not be involved in the incident.
Local police advised people to avoid the area after shots were fired at around 9pm local time.
Witnesses said the attacker pulled up beside a stationery police car and fired through the window.
“He parked just behind the van and he got out with a Kalashnikov and I heard six gunshots,” a witness named Chelloug said.
“I thought they were firecrackers, because we all looked around the road and there was no one.
“In fact, he was hidden behind the van and shooting at the police.
Eyewitness of the Paris shooting says he heard six gun shots between police and the gunman
Two French police officers killed by gunman in Paris ‘terror’ attack”I think he hit a policeman. As soon as the policeman opened the door of the van, he fell, I think.
“As soon as we saw that, we all ran back inside (a building). We hid and I went up to the first floor and we saw them (the policeman) shoot him (the perpetrator).”
He added: ” I was afraid. I have a two year-old girl and I thought I was going to die… He shot straight at the police officer.”
President Francois Hollande said officials are “convinced” the incident is a terror attack.
Paris Prosecutor’s anti-terror office has opened an inquiry.
Eyewitness of the Paris shooting says he heard six gun shots between police and the gunman
ISIS claims it was behind Paris police shootingYvan Assioma of the police union Alliance said: “The exact circumstances are still unclear but I can confirm the tragic death of one of our colleagues. Our thoughts are very much with the family.
“One or several attackers have been shot dead by the police. Some officers were hit but the bullets were stopped by their bulletproof vests, but two were hit.
“Nothing is being ruled out for the time being, terrorism or a criminal act.”
Champs-Elysees in Paris evacuated after two police officers shot dead
French police closes traffic on Champs Elysees after shootingA Government spokesperson said: “An automatic weapon was used against police, a weapon of war.
“The shooting started shortly after 9pm, when a car stopped alongside a stationary police car.
“A man immediately got out and opened fire on the police car, fatally wounding a police officer. He also wounded a second one, it would seem very seriously.”
The shooting happened near the Métro station Franklin D Roosevelt and the Marks and Spencer store on the Champs-Elysées.
It is one of the most famous streets in the world and a busy tourist hub.
Armed police and emergency services have been spotted at the scene.
Armed officers tak e position behind a kiosk on the Champs ElyséesFrance’s President Francois Hollande has scheduled an emergency meeting following the shootings.
French Presidential candidates Marine Le Pen and Francois Fill0n have cancelled their trips tomorrow.
The shooting comes just just days ahead of France’s presidential election.
On Tuesday, 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.
Policeman shot dead and ‘two seriously injured’ on Champs-Élysé, Paris
Police officers evacuate people off the Champs Elysees after ‘terror attack’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.
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.”
Story 4: Republicans Return Repeal Replace Obamacare — Compromise Should Pass House by April 28, 2017 Videos —
House Republicans Close To Obamacare Repeal
Published on Apr 20, 2017
House Freedom Caucus and moderate Republicans are edging closer to a deal on repealing Obamacare. The agreement, brokered by House Freedom Caucus chairman Mark Meadows (R-NC) and Tuesday Group co-chairman Tom MacArthur (R-NJ), would allow states to eliminate Obamacare’s community rating system, a rule that prohibits health insurers from pricing health care plans based on age, gender, or health status. States that repeal Obamacare’s community rating rules would have to join a federal high-risk pool or establish a local high-risk pool to obtain the waiver.
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It’s going to be nearly impossible for Republicans to repeal and replace Obamacare next week
The developing plan from House Republicans to push forward their overhaul of the US healthcare system has one big problem: timing.
A new amendment leaked Wednesday night appears to be a compromise between the leaders of the conservative House Freedom Caucus and moderate Tuesday Group that could produce some movement on the bill in that timeframe.
But Congress faces another looming deadline by April 28: funding the federal government. If no new funding bill is passed by next Friday, parts of the federal government will shut down.
Washington is not known for multitasking, and it could be difficult to get a funding bill passed as the White House and lawmakers push to add policy proposals to the funding bill. Given the political ramifications of the issue, the shutdown fight could consume the calendar.
According to Politico, the White House and Congress are considering passage of a one-week extension on funding in order to hash out a more considered funding bill and possibly give the House time to take up the AHCA, which became colloquially known as “Trumpcare.”
Barring such an extension, however, it would be highly unlikely that the American Health Care Act moves forward before Trump’s 100th day in the Oval Office.
The full text of the proposed amendment, obtained by Politico’s Jake Sherman and Anna Palmer, states that the waiver would be granted by the federal government if the state can prove that it has an alternative to “reduce premium costs, increase the number of persons with healthcare coverage, or advance another benefit to the public interest in the state.”
Essential health benefits require insurers to cover a baseline of health procedures such as prenatal care and emergency room visits. Community rating means that insurers must charge people living in the same area the same price for insurance regardless of things such as age, gender, or preexisting conditions.
“The gist of this is that federal protections for pre-existing conditions and required benefits remain…unless a state doesn’t want them to,” tweeted Larry Levitt, senior vice president at health policy think thank The Kaiser Family Foundation on Thursday.
However, this means that the Trump administration, most likely Secretary of Health and Human Services Tom Price, would have final say on whether or not a waiver is granted.
While the deal was reportedly reached by conservative House Freedom Caucus chair Rep. Mark Meadows and moderate Tuesday Group chair Rep. Tom MacArthur, it also bears similarities to a previous deal that drew the ire of moderates for going too far in pulling back protections.
Additionally, it does not address the concerns of moderates such as the defunding of Medicaid expansion or the estimates that the Affordable Health Care Act could leave up to 24 million fewer people without health coverage over the next 10 years.
The Washington Post’s Robert Costa reported after the amendment’s outline was leaked that the GOP leadership is planning to release the exact language for the amendment later on Thursday and are targeting Wednesday for a vote on the revised bill, but that could change.
The amendment comes the day after reports that the White House was pushing for a deal to be completed by the end of next week in order to show progress during Trump’s first 100 days as president. Additionally, House Speaker Paul Ryan said in London on Wednesday that the GOP was putting the “finishing touches” on an Obamacare deal.
Passing the AHCA, even with the proposed changes, would be difficult in the short-term as Congress must also pass a bill to fund the federal government before parts of it shut down on April 28.
Mnuchin: Most significant tax code change since Reagan 9 Hours Ago | 01:19
The Trump administration is close to bringing forward “major tax reform,” Treasury Secretary Steven Mnuchin said Thursday, days after he tempered expectations for how quickly it will pass.
Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan “very soon.” However, the Trump administration previously missed several of its deadlines for releasing its tax plan.
In terms of timing, he said he hoped passing a tax overhaul will not “take till the end of the year.”
Mnuchin spoke at the Institute of International Finance Washington Policy Summit, where White House chief economic advisor Gary Cohn was set to appear later Thursday.
In a Financial Times interview published Monday, Mnuchin said getting a bill to President Donald Trump‘s desk before August is “highly aggressive to not realistic at this point.” He said in February that he wanted to see “very significant” tax reform passed by Congress’ August recess.
The business community has hoped Republicans can move quickly on overhauling the American tax system, a prospect that partly fueled stock market gains in the months following Trump’s election. However, political realities have tempered expectations for changes to the tax system.
Republicans attempted to pass legislation to replace the Affordable Care Act before moving to a tax reform bill. That effort failed late last month, and Mnuchin said the setback contributed to his assessment that passing a tax overhaul by August could be difficult.
Trump put the pressure back on Tuesday after Mnuchin and Cohn appeared to walk back expectations for how quickly tax reform will happen. He called out Mnuchin by name during a speech at Snap-on headquarters in Wisconsin.
“So we’re in very good shape on tax reform. We have the concept of the plan. We’re going to be announcing it very soon,” Trump said at that time. “But health care, we have to get the health care taken care of, and as soon as health care takes care of we are going to march very quickly. You’re going to watch. We’re going to surprise you. Right, Steve Mnuchin? Right?”
Even though the president sounded optimistic Tuesday, the Trump administration has set deadlines for tax policy before that have not come to pass. In late February, Trump said the tax plan was “very well finalized,” only a day after press secretary Sean Spicer said it would be released “in the next couple weeks.
Republicans have refocused on resurrecting the effort to repeal the ACA, better known as Obamacare, as they get set to return from a recess next week. House GOP leaders are trying to balance the concerns of the both the party’s conservative and moderate wings as they try to follow through on a major campaign pledge.
Mnuchin said Thursday that “whether health care gets done or health care doesn’t get done, we’re going to get tax reform done.”
The Bonner group/A Super PAC and fundraiser for Hillary & DNC. The Campaign against Bill OReily is orchestrated by MM & BG. #Smearproof
Glenn Beck ✔ @glennbeck The Bonner group/A Super PAC and fundraiser for Hillary & DNC. The Campaign against Bill OReily is orchestrated by MM & BG. #Smearproof 5:58 AM – 19 Apr 2017 321 321 Retweets 232 232 likes
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Sources: Fox News Has Decided Bill O’Reilly Has to Go
By Gabriel Sherman
The Murdochs have decided Bill O’Reilly’s 21-year run at Fox News will come to an end. According to sources briefed on the discussions, network executives are preparing to announce O’Reilly’s departure before he returns from an Italian vacation on April 24. Now the big questions are how the exit will look and who will replace him.
Wednesday morning, according to sources, executives are holding emergency meetings to discuss how they can sever the relationship with the country’s highest-rated cable-news host without causing collateral damage to the network. The board of Fox News’ parent company, 21st Century Fox, is scheduled to meet on Thursday to discuss the matter.
Sources briefed on the discussions say O’Reilly’s exit negotiations are moving quickly. Right now, a key issue on the table is whether he would be allowed to say good-bye to his audience, perhaps the most loyal in all of cable (O’Reilly’s ratings have ticked up during the sexual-harassment allegations). Fox executives are leaning against allowing him to have a sign-off, sources say. The other main issue on the table is money. O’Reilly recently signed a new multiyear contract worth more than $20 million per year. When Roger Ailes left Fox News last summer, the Murdochs paid out $40 million, the remainder of his contract.
According to sources, Fox News wants the transition to be seamless. Executives are currently debating possible replacement hosts. Names that have been discussed include Eric Bolling, Dana Perino, and Tucker Carlson, who would move from his successful 9 p.m. slot and create a need for a new host at that time. One source said Sean Hannity is happy at 10 p.m. and would not want to move.
The Murdochs’ decision to dump O’Reilly shocked many Fox News staffers I’ve spoken to in recent days. Late last week, the feeling inside the company was that Rupert Murdoch would prevail over his son James, who lobbied to jettison the embattled host. It’s still unclear exactly how the tide turned. According to one source, Lachlan Murdoch’s wife helped convince her husband that O’Reilly needed to go, which moved Lachlan into James’s corner. The source added that senior executives at other divisions within the Murdoch empire have complained that if O’Reilly’s allegations had happened to anyone else at their companies, that person would be gone already.
Spokespersons for 21st Century Fox and Fox News did not respond to requests for comment, nor did O’Reilly’s agent, Carole Cooper.
By EMILY STEEL and MICHAEL S. SCHMIDT APRIL 19, 2017
Bill O’Reilly has been the top-rated host in cable news, serving up defiant commentary with a message that celebrated patriotism and expressed scorn for political correctness.CreditAndrew Hetherington/Redux Pictures
Bill O’Reilly has been forced out of his position as a prime-time host on Fox News, the company said on Wednesday, after the disclosure of multiple settlements involving sexual harassment allegations against him. His ouster brings an abrupt and embarrassing end to his two-decade reign as one of the most popular and influential commentators in television.
“After a thorough and careful review of the allegations, the company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel,” 21st Century Fox, Fox News’s parent company, said in a statement.
Mr. O’Reilly’s departure comes two and a half weeks after an investigation by The New York Times revealed how Fox News and 21st Century Fox had repeatedly stood by Mr. O’Reilly even as sexual harassment allegations piled up against him. The Times found that the company and Mr. O’Reilly reached settlements with five women who had complained about sexual harassment or other inappropriate behavior by him. The agreements totaled about $13 million.
Since then, more than 50 advertisers had abandoned his show, and women’s rights groups called for his ouster. Inside the company, women expressed outrage and questioned whether top executives were serious about maintaining a culture based on “trust and respect,” as they had promised last summer when another sexual harassment scandal forced the ouster of Fox News’s chairman, Roger Ailes.
That put pressure on 21st Century Fox and the Murdoch family that controlled it. After the dismissal of Mr. Ailes, the company struck two settlements involving sexual harassment complaints against Mr. O’Reilly and also extended his contract, even as it was aware of the complaints about his behavior.
Last week, the Murdochs enlisted the law firm Paul, Weiss, Rifkind, Wharton & Garrison to conduct an investigation into Mr. O’Reilly’s behavior after one woman, who had detailed her allegations against Mr. O’Reilly to The Times, called the company’s hotline to report her complaints. Another complaint was reported on Tuesday, according to the lawyer who represents the woman making the allegations.
Mr. O’Reilly has denied the allegations against him.
Mr. O’Reilly, 67, has been an anchor at Fox News since he started at the network in 1996. He was the top-rated host in cable news, serving up defiant commentary every weekday at 8 p.m., with a message that celebrated patriotism and expressed scorn for political correctness. His departure is a significant blow to Fox News’s prime-time lineup, which in January lost another star, Megyn Kelly, from a lineup that dominated the prime-time cable news ratings.
Media Matters President Angelo Carusone: “Even If Bill O’Reilly Stays, His Show Will Never Be As Profitable”
Carusone: Fox News Said It Themselves … ‘If You Have A Television Show And You Have Advertiser Problems, You No Longer Have A Television Show That Is Viable.”
Video ››› April 5, 2017 6:30 PM EDT ››› MEDIA MATTERS STAFF
From the April 5 edition of Cheddar News:
KRISTEN SCHOLER (CO-HOST): We know that you’ve been following the developments in these sexual harassment claims against Fox News’ Bill O’Reilly, and as of right now ABC reporting 22 advertisers pulling out of advertising at least temporarily on his show. How is this going to force Fox News to respond long term? We’ve heard the response short-term which is it’s working with these advertisers, but big picture what do you think this means?
ANGELO CARUSONE: One thing that at the top that I point out is, when we think about the number of advertisers that have dropped, that 22 number is the ones that have given public statements. From just observing the program and his advertisers the last couple of weeks, and then what his advertising looked like last night, and just from my own experience of running and being involved in similar kinds of advertiser efforts, like against Glenn Beck, I suspect that many more advertisers have actually adjusted their ad buys but just haven’t given public statements yet. Because many of the advertisers that had been advertising on the program every single night for the past few weeks did not appear last night after this controversy blew up, and I don’t think they’ll be there tonight.
JON STEINBERG (CO-HOST): Angelo, at what point — because they’re sticking by this guy, because he brings in money. And they basically don’t care; they don’t care how bad it is or what he’s done, he makes them so much money that they’re going to stick with him. At what point is it enough advertisers that the math — the problem is, this looks bad for them, and it could be even worse for them, they could have gotten ahead of this and been like, “this guy’s toxic, we’re done,” right? Instead they paid his settlements, stuck by him, now they’re going to lose money and now they’re going to have to pull the ripcord on him, at which point it looks like they’re just doing it for the money.
CARUSONE: And I think that’s the exact right question, which is at what point does it actually start to affect them? What happens during these kinds of flare-ups is that there’s an assumption on the public’s part that if O’Reilly was to leave the program in a couple of days, that everything was pointless and worth it and Fox News is totally fine and Bill O’Reilly is totally fine. That’s actually just not true, and during the Glenn Beck period, after he lost a wave of advertisers, his advertiser rates never recovered. He limped along for over a year. His advertiser rates were a quarter of what other Fox News programs were even though he had a million viewers than many other Fox News programs, comparable ones, during similar time slots. He was beating the programs around him by a million viewers but his advertiser rates for the same advertisers, and for the same commercials, were sometimes a fifth of what they were on just a program an hour later or an hour earlier. That’s because they fell precipitously after he lost a lot of advertisers. The market addressed that issue; once you started to see there’s a problem buying ads on that show, media buyers weren’t going to pay the same rates anymore, and they never did. So that’s the first thing that I would point out, that no matter what, even if Bill O’Reilly stays, his program will never be as profitable as it was three days ago. That is just a bottom-line fact.
On The O’Reilly Factor and on his former talk-radio program, Bill O’Reilly has focused on news and commentary related to politics and culture. O’Reilly has long said that he does not identify with any political ideology, writing in his book The O’Reilly Factor that the reader “might be wondering if whether I’m conservative, liberal, libertarian, or exactly what…. See, I don’t want to fit any of those labels, because I believe that the truth doesn’t have labels. When I see corruption, I try to expose it. When I see exploitation, I try to fight it. That’s my political position.” On December 6, 2000, the Daily News in New York reported, however, that he had been registered with the Republican Party in the state of New York since 1994. When questioned about this, he said that he was not aware of it and says he registered as an independent after the interview. During a broadcast of The Radio Factor, O’Reilly said that there was no option to register as an independent voter; however, there was in fact a box marked “I do not wish to enroll in party.” Despite being registered as an Independent, many view him as a conservative figure. A Pew Research February 2009 poll found that 66% of his television viewers identify themselves as conservative, 24% moderate, and 3% liberal. A November 2008 poll by Zogby International found that O’Reilly was the second most trusted news personality after Rush Limbaugh.
I’m not a political guy in the sense that I embrace an ideology. To this day I’m an independent thinker, an independent voter, I’m a registered independent… there are certain fundamental things that this country was founded upon that I respect and don’t want changed. That separates me from the secularists who want a complete overhaul of how the country is run.
According to the Newsmax publication, O’Reilly has repeatedly claimed that Clinton had the Internal Revenue Service audit him. O’Reilly says that he was audited three times since his program debuted in 1996.
In 2002, O’Reilly had criticized Democratic Senator Hillary Clinton, stating that she would run for president in 2008. In an interview with Jay Leno on The Tonight Show, he said, “I just feel that Hillary is a socialist, and I’m paying enough tax. Hillary wants to take my money [and] your money… and give it to strangers. There’s something about that that offends me.” He said that she had voted for every single spending bill that year. In the same interview, he accused her of running as a political carpetbagger, and said that she intends to abolish the Electoral College in favor of the popular vote, claiming that it would be done only to give her an advantage in the presidential race.
During the lead up to the 2004 presidential election, O’Reilly said that the Democratic Party has been taken over by the “far-left” in a conversation with former Democratic Congressman Brad Carson. Shortly following the election, O’Reilly ridiculed a message in which Democratic challenger John Kerry thanked his supporters for their support as well as opposing “the attacks from big news organizations such as Fox, Sinclair Broadcasting, and conservative talk radio.” O’Reilly shot back, calling Kerry a “sissy” six times. Kerry himself stated publicly in a 2006 interview that he always felt he’d have a “fair shot” at conveying his views on The O’Reilly Factor and regrets not doing an interview prior to the election.
Although O’Reilly has never officially endorsed any candidate, he did advise his audience not to support Democratic South Dakota senator Tom Daschle in his Senate re-election bid on his radio program, saying that, “[W]ith all due respect to the senator, we don’t have any respect for him at all. And we hope he loses in South Dakota. And I — really, I stay out of all these races, but you guys listening in South Dakota, vote for the other guy.” Daschle would lose the 2004 Senate election in South Dakota to John Thune.
2008 presidential election
In the 2008 Democratic primary, O’Reilly urged his viewers not to vote for a candidate, this time John Edwards, and called Edwards a “phony” regarding his public statements on poverty. O’Reilly has, on many occasions, admitted to “having no respect for him”, and called him “arrogant” for keeping his campaign staffer Amanda Marcotte on after making remarks O’Reilly called offensive to Christians.
O’Reilly has also criticized Republicans. When speaking to Ed Schulz in 2007, O’Reilly said that then-presidential candidate Rudy Giuliani had “terrible character judgement” with Bernard Kerik and felt that “disqualified him from being president.”
“Culture War” and domestic politics
O’Reilly has taken to using the abbreviation “S-P”, for “SecularProgressive“, as a shorthand way of referring to a political category of people who want “drastic change” in the country. O’Reilly classifies the group as “far left”, and almost always refers to the group in a negative manner. However, he says that he is not equating the negative qualities he sees in “SPs” with a “liberal” political ideology, saying the SP camp is far more “libertine” with social values:
Liberal thought, however, can be a good thing. Progressive programs to help the poor, fight injustice and give working people a fair shake are all positive. But libertine actions damage a just society because actions have consequences. Kids who drink and take drugs are likely to hurt themselves and others. But obviously, the SPs do not make judgments like that.
O’Reilly initially supported the invasion of Iraq. Speaking on ABC’s Good Morning America on March 18, 2003, O’Reilly promised that “If the Americans go in and overthrow Saddam Hussein and it’s clean [of weapons of mass destruction]…I will apologize to the nation, and I will not trust the Bush administration again.” In another appearance on the same program on February 10, 2004, O’Reilly responded to repeated requests for him to honor his pledge: “My analysis was wrong and I’m sorry. I was wrong. I’m not pleased about it at all.” With regard to never again trusting the current U.S. government, he said, “I am much more skeptical of the Bush administration now than I was at that time.”
O’Reilly has questioned the U.S. invasion of Iraq in hindsight, in particular the performance of Defense Secretary Donald Rumsfeld. However, he maintains that the United States “did a good thing by trying to liberate a country”. O’Reilly says the war effort should continue as long as progress is being made. He has also said that some anti-war activists are actively rooting for the United States to lose:
Again, I don’t know. With all America has sacrificed in Iraq, though, it seems reasonable to let the end game play out. If things are getting better, don’t derail the train.
But the anti-war crew is now fully invested in defeat. So the struggle at home is becoming even more vicious. Iraq is a shooting war. America’s a political war. Both are driven by hatred.
O’Reilly called the Iraqi people a “prehistoric group”, citing a poll showing that only two percent of them viewed the U.S. Forces as liberators and 55 percent preferred that they leave. “We cannot intervene in the Muslim world ever again”, he said. “What we can do is bomb the living daylights out of them (…) no more ground troops, no more hearts and minds, ain’t going to work.”
You can’t win. No one could. No nation could unless the Iraqi people turn on all the terrorists. And they’re not. They’re not, Tony.
O’Reilly went on to say that the country was corrupt and compared the situation to the American support of South Vietnam during the Vietnam War:
It’s like South Vietnam. It’s the same thing. There were a lot of South Vietnamese helping us. A lot fought and died on our side but there wasn’t enough of them to prevent the communists which were more united.
The cost has been great. We all know that. In suffering and cash. And the Iraqi government is still a mess. But General Petraeus, backed by a brave and professional U.S. military, has restored much order, largely defeated the Iraqi Al Qaeda thugs, and at least given the good people of that country a chance to prosper. General David Petraeus is “The Factor” person of the year by a wide margin.
O’Reilly has endorsed an aggressive War on Terror policy. He supports coercive measures to extract information from detainees at Guantanamo Bay, which he visited on two occasions. He has said that, in comparison to procedures used under the regimes of dictators such as Adolf Hitler and Pol Pot, the U.S.’s tactics are not torture and are beneficial even when involving physical techniques, claiming that “Torture is taking my fingers off, disfiguring me, taking my eye out — not keeping me in a cold room and uncomfortable with blaring rock music.” O’Reilly cites waterboarding as a successful coercive measure that should not be classified as torture, citing that Abu Zubaydah and Khaled Sheikh Mohammed have both given up valuable information after being subjected to the technique:
In my opinion, it is immoral to allow terrorists to kill people when you can stop them. If you capture someone who knows the inner workings of a terror outfit, you make life very uncomfortable for that person within boundaries set by Congress.
But let’s stop the nonsense here. America’s not a bad country because it waterboarded Zubaydah. The Bush administration has done its job. We haven’t been attacked since 9/11.
The liberal press, politicians, the ACLU can’t stop any wrongdoing. They’re all lost in a fog of misguided indignation, crazy with hatred for Bush, but we the people must take a stand here. This isn’t a game. This is life and death. And if you don’t believe it, I know scores of people right here in New York City that will tell you about their dead loved ones.
Waterboarding should be a last resort, but it must be an option.
O’Reilly has said that both political parties in the United States are “playing games” with regards to the war on terrorism:
…both the right and the left are playing games to some extent. Certainly, Al Qaeda remains dangerous, but the only way to hit them is to invade Pakistan. Do the Democrats want to do that?
On the other hand, it would be a tragedy if after all the blood and treasure Americans have sacrificed, Al Qaeda has not been badly damaged.
America should be united in fighting these savages, but we’re not. Ideology has poisoned a reasoned, disciplined approach to defeating the jihadists. America’s great strength, diversity of thought, can also be a weakness. And Al Qaeda knows it.
The old saying goes, “United we stand, divided we fall.” Well, we’re divided.
O’Reilly has accused billionaire businessman, investor and political activist George Soros of trying to influence the 2008 election by donating to causes and organizations that O’Reilly calls the “radical left”, such as moveon.org, which regularly criticizes conservative politicians. O’Reilly said of Soros “If Mike Myers didn’t invent Dr. Evil, some would give Soros that moniker.” O’Reilly also accused Media Matters for America of receiving funds from Soros; although Media Matters denies having any funding directly or indirectly from Soros, he and the group’s founder, David Brock, have raised money together to fund political advertisements challenging John McCain in the 2008 election for what politico.com called “attack ads”. O’Reilly responded to the politico report by labeling Soros, Brock and Paul Begala an “American axis of evil” and saying
This, ladies and gentlemen, is ultra dangerous. Most Americans have no idea who Soros or Brock are. They will only know what they see on TV, smear stuff against McCain. And the pipeline extends directly to NBC News, which will publicize every piece of slime Brock can create. Only one word describes this: despicable.
O’Reilly alleged that PBS personality Bill Moyers oversaw $500,000 worth of money transferred from the Shoeman Center Foundation (a group Soros donated to) to Media Matters.
you know, you’ve got to admire Soros for coming up with this organization. I mean, you know, he’s made billions by doing this in business, by being in Curaçao and Bermuda and France, where he was convicted of a felony. And he knows how to do this. He knows how to move the money around and use it to gain influence. And now he’s set his sights on changing the basic fabric of this country.
O’Reilly alleged hypocrisy on the part of the ACLU for stating that New York City‘s random searches of bags in the public transportation as a breach of personal rights, but requiring people entering their New York headquarters to consent to a bag search.
O’Reilly asserted that the ACLU is now a political organization rather than an advocacy group, taking positions and cases based on politics rather than free speech.
He has come down hard on the organization for its actions on behalf of the North American Man Boy Love Association (NAMBLA) which is currently under suspicion of involvement with the rape and murder of a young boy:
Now many of these people subscribe to a philosophy of relativism. That is a theory which says there’s no absolute right or wrong. All moral values are relative. What’s wrong for you is not wrong for your neighbor if he or she doesn’t think his or her actions are wrong. That’s what the North American Man-Boy Love Association (NAMBLA) is all about. Those loons believe it’s OK to rape kids because they want to.
The ACLU defends NAMBLA’s freedom of speech surrounding their publications and has said that the legal blame in the murder should go to who committed it.
The ACLU has said that they sometimes have to defend “unpopular” speech or speech that they don’t agree with, including the Ku Klux Klan‘s, saying their only “client” is the Bill of Rights. O’Reilly alleges the ACLU “cherry picks” its cases to promote a left wing agenda while not supporting causes of free speech that conservatives support in his criticism of the ACLU defending live sex shows in Oregon.
O’Reilly decried the group’s criticism of The Minutemen, claiming the latter were only engaging in a form of protest, a right the ACLU defends. O’Reilly alleges that the organization is protesting the Minutemen because they are going against the ACLU’s agenda.
O’Reilly criticized the ACLU for suing San Diego County for renting property to the Boy Scouts of America in Balboa Park. The ACLU brought up a law claiming that the Boy Scouts discriminated against gays and atheists. O’Reilly criticized the San Diego City Council for voting 6-2 to vote the Scouts out before a ruling on the lawsuit was made.
It would be impossible for the Boy Scouts (search) or any children’s organization to admit avowed homosexuals because of the potential liability. Say the Scouts put openly gay and straight kids together and some sexual activity occurred. Well, parents could sue for millions, same way parents could sue if the Scouts put boys and girls together and underaged sex occurred. As far as the atheist issue is concerned, the Scouts say no specific belief in God is necessary, only an acknowledgement of a higher power. And that power could be nature. Come on. The whole discrimination thing is bogus.
Part of the Boy Scout Oath begins, “On my honor, I will do my best to do my duty to God and my country” and the final point of the Scout Law reads, “A Scout is reverent,” with the Boy Scouts’ of America official explanation being that “a Scout is reverent toward God. He is faithful in his religious duties. He respects the beliefs of others.” However, the bylaws of the organization specifically state that Scouts must “respect the religious beliefs of others” and “in no case where a unit is connected with a church or other distinctively religious organization shall members of other denominations or faith be required, because of their membership in the unit, to take part in or observe a religious ceremony distinctly unique to that organization or church.”
O’Reilly argues this is a liberal definition of what God may be, allowing diversity for anyone believing in a higher power to join.
Now the ACLU is free to come to your town and sue the heck out of it. And believe me, that organization will. The ACLU doesn’t care about the law or the Constitution or what the people want. It’s a fascist organization that uses lawyers instead of Panzers. It’ll find a way to inflict financial damage on any concern that opposes its secular agenda and its growing in power.
He later went on to criticize the Boy Scout leadership for not standing up to the ACLU.
On October 16, 2006 at Mount Pleasant High School in Michigan, a student stood up publicly in the cafeteria and called the principal of the school “a skank and a tramp.” In addition to this, the student called the school administrators Nazis and questioned the sexuality of the vice-principal. The school suspended the boy for 10 days, an action that brought a lawsuit by the ACLU. O’Reilly criticized the ACLU for defending the remarks as satire when he saw it as hate speech.
O’Reilly strongly condemns doctors who provide legal abortion services. Since 2005, he has repeatedly referred to physician and abortion doctor George Tiller as “Tiller the baby killer” on his Fox News prime time show, claiming that there must be “a special place in hell” for him. In May 2009, Tiller was murdered by anti-abortion gunman Scott Roeder.
O’Reilly has said that there is a lack of leadership among the traditionalists and this has emboldened the secular-progressive cause. He consistently says that using religion to justify public policy is wrong:
Right now, religious people are the ones speaking out for traditional values. But America does not forge public policy based on religion. Thus as soon as God enters the debate, the secularists win.
O’Reilly supports some forms of gun control, such as gun registration.
O’Reilly opposed the nationalizedhealth care plan that filmmaker Michael Moore argues for in his film Sicko, saying it would create huge backlogs. He also said, however, that he thinks the government should perform more oversight functions on health care:
…[G]overnment-run health care would be a disaster, featuring long waits for treatment and an enormous rise in taxation. But there should be government oversight on private insurance companies and strict guidelines about abusing customers. There can be compromise and effective government control of medical care abuse in the USA. It is possible. But if Michael Moore’s plan ever gets traction, pray hard you never get sick.
O’Reilly’s stance on LGBT issues has been evolving.
On October 27, 2004, he was quoted saying: “I’ve been saying that all along, that if you open the door for gay marriage, then you have to have the polygamists and the triads and the commune people and everybody else, right?”
O’Reilly supports civil unions for gay and lesbian couples, but has said that nobody has the “right” to marry; he says that marriage, like driving a car, is a privilege, not a right. He has said that if the government felt marriage was a right, then it would not stop polygamists and incestuous couples from marrying. O’Reilly further explained his position in his book Culture Warrior:
To this culture warrior, gay marriage is not a vital issue. I don’t believe the republic will collapse if Larry marries Brendan. However, it is clear that most Americans want heterosexual marriage to maintain its special place in American society. And as long as gays are not penalized in the civil arena, I think the folks should make the call at the ballot box. Traditional marriage is widely seen as a social stabilizer, and I believe that is true.
On March 26, 2013, O’Reilly stated “I support civil unions, I always have. The gay marriage thing, I don’t feel that strongly about it one way or the other. I think the states should do it.” O’Reilly then said, “The compelling argument is on the side of homosexuals … ‘We’re Americans, we just want to be treated like everybody else.’ That’s a compelling argument, and to deny that you’ve got to have a very strong argument on the other side. And the other side hasn’t been able to do anything but thump the Bible.
O’Reilly discussed a story surrounding around a teenage lesbian couple being elected as the “cutest couple” in their school yearbook. He stated that he believed that this couple was elected by the students to “tweak the adults” and to “cause trouble”. He explains further here:
High school kids, they experiment. They experiment all over the place, they have a chip on their shoulder. They do things just to get a reaction, just to rebel. Parents might say “We don’t want to normalize homosexuality in a public way in an academic setting among minors. We don’t think that reflects how we feel about it”.
O’Reilly is known to favor adoption by a same-sex couple since 2002.
O’Reilly is opposed to the School Success and Opportunity Act (Assembly Bill 1266), which extends gender identity and expression discrimination protection to transgender and gender-nonconforming K-12 students in public schools. O’Reilly described the law as “madness” and “anarchy” on Fox News Channel.
Just before the repeal of the “Don’t Ask, Don’t Tell” law banning homosexuals from serving in the military, he appeared on the Tonight Show and called the law “nonsense” and said he didn’t understand why the President, in his role as commander in chief of the armed forces, simply didn’t sign an executive order rescinding it.
US legal system
He regularly criticizes jurists in controversial cases as “activist judges.” He uses the issue of gay marriage as an example. “The folks decide that by voting and, in the case of gay marriage, the folks have decided. And that decision should be respected.”
He has suggested convicted rapists, mass murderers, terrorists, and other people who commit crimes against humanity be sent to a gulag style prison in Alaska with strict rules and minimal privileges. He has said this would serve as a replacement for the death penalty, to which he is opposed.
O’Reilly has been very critical of the U.S. film industry for producing films featuring violence and human suffering, such as the Saw series. He has compared this to the brutal displays of death in the Colosseums of ancient Rome. O’Reilly has said that films like these are marketed to children and can have consequences on their personal development. He commented on Kill Bill: Volume 1:
It’s the most violent movie ever made, featuring brutal dismemberments and a scalping close-up. And you should see the raves this movie is getting from the pinhead critics. And who’s lining up to see it? Children, that’s who.
O’Reilly severely chastized billionaire Mark Cuban, owner of the Dallas Mavericks, for his support of Brian De Palma‘s film Redacted that portrayed the rape of an Iraqi girl by American soldiers. O’Reilly claimed that the film would be used as a recruiting tool by terrorists.
Every educator that I’ve talked to, and I’ve talked to hundreds, say that the kind of gangsta rap that Ludacris traffics in has debased the culture, made it more difficult for them to teach children and indeed, led children into anti-social behavior.
In 2007, O’Reilly had a dispute with Nas after the rapper was hired to play a concert at Virginia Tech one year after the school had experienced the Virginia Tech massacre. “Having a rapper who trades in violence perform at Virginia Tech insults the victims, the university and the entire commonwealth,” declared Bill O’Reilly.Nas subsequently called Bill O’Reilly a racist, and accused O’Reilly of going to extremes for publicity. He repeated this stance again in July 2008, when a dispute between Nas and O’Reilly led to Nas taking a petition to Fox News, and appearing on both Fox News, and the The Colbert Report. Also in 2008, Nas challenged Bill O’Reilly to a public debate, to which O’Reilly did not accept.
In May 2015, O’Reilly blamed the decline of American religion particularly the declining numbers of American Christians on hip hop music citing the genre as “pernicious entertainment” and an adducing factor for contributing to the decline. O’Reilly remarked that people of faith are being marginalized by a secular media and pernicious entertainment and rap industry often glorifies depraved behavior causing the minds of people who consume the music as the least likely to reject religion.” American rapper Killer Mike subsequently criticized him for his remarks calling O’Reilly “full of s**t than an outhouse” and then mocked him while he was a guest Real Time with Bill Maher.
Several rappers and hip hop producers have appeared on The O’Reilly Factor. Rapper Cam’ron and hip hop entrepreneur Damon Dash appeared on the program to defend their supposed corruption of young people, to which Damon Dash responded:
So, if you know there is negative in something, try to find the positive as opposed to always talking about the negative. That’s the thing I don’t understand, why we’re criticized so hard within hip-hop. No one talks about the jobs we create, no one talks about the things we do within our community, and no one talks about the businesses we’ve done, how we’ve opened the doors and shown people that it’s cool to be smart, it’s cool to be a CEO, and it’s cool to not take advantage but to reap the benefits of all your labor and to do it fairly.
Bill O’Reilly has also interviewed Marilyn Manson on the topic of being a “dangerous” influence on U.S. youth. O’Reilly asked Manson if he thought his work encouraged kids to have sex, homosexuality, use drugs and profanity. He also asked Manson whether his songs encouraged suicide or not. Marilyn Manson answered that in his view the songs were about getting through those feelings, and that ultimately people make their own decisions.
O’Reilly believes the American news media is corrupt and often criticizes it for not reporting topics that hurt the liberal agenda. He has often stated that he is the only one in the media holding people accountable on both sides. In June 2007, Adweek Magazine sponsored a survey that asked participants who they trusted more as a source of political information between ABC News and O’Reilly. According to the poll, 36 percent believe that O’Reilly is a better source than ABC News, while 26 percent believe the opposite. According to the survey, 23 percent of Democrats believed that O’Reilly was a better source while 55 percent of Republicans believed the same.
O’Reilly has criticized the media for not highlighting Rosie O’Donnell‘s controversial remarks saying the United States attacked itself on September 11th while they highlighted Ann Coulter‘s remarks about calling Senator John Edwards a “fag.” O’Reilly said in response to the situation:
Doing the math, Ms. O’Donnell says something 100 times more offensive than Ms. Coulter, in my opinion, yet there’s no coverage about it. But there’s no left wing media bias in this country. Oh no!
O’Reilly has criticized journalists who donate to political parties after a report stated that nine out of 10 journalists donated to Democrats or liberal causes; he has said this has resulted in news media tilting to the left.
O’Reilly says that news coverage about positive improvements for American and Iraqi objectives in Iraq have been largely ignored. He conjectured that the ignoring of the positive news took place to help a Democrat win a presidential election.
O’Reilly has asked his viewers and listeners to not patronize the following media outfits, saying those organizations “have regularly helped distribute defamatory, false or non-newsworthy information supplied by far-left websites”:
In an interview with commentator Bill Maher, former CBS News anchor Dan Rather accused Fox News Channel of receiving “talking points” from the Republican controlledWhite House. O’Reilly criticized Rather heavily, responding that Rather did not offer any evidence to support the claim. O’Reilly cited his defense of Rather during the Memogate incident:
As you may remember, I defended Rather in the Bush National Guard debacle. I said Rather did not intentionally put on a bogus story. He just didn’t check it out, he was too anxious for the story to be true.
Now many of you criticized me for that defense, but I’m a fact-based guy. And there’s no evidence Dan Rather fabricated anything. It was sloppy reporting that did him in.
But now the fabrication word is in play again. If Dan Rather has evidence of White House dictums coming to FOX News employees, he needs to display that evidence. We are awaiting his appearance. We’ll let you know when it is.
O’Reilly has gone after PBS personality Bill Moyers. O’Reilly criticized Moyers for having no balance in his presentations, citing a criticism by PBS’ own ombudsman. He also called Moyers dishonest for making disparaging remarks about O’Reilly to Rolling Stone and then later denying he made the remarks when confronted by one of O’Reilly’s producers.
CNN journalists were prominent among those critical of O’Reilly when he stated that he “couldn’t get over the fact” that a largely African-American crowd at a Harlem restaurant behaved no differently than patrons of a white restaurant and garnered media coverage O’Reilly objected to CNN’s portrayal of his commentary, stating that CNN had been irresponsible in mischaracterizing his remark as racist, when in fact, he said, he was actually speaking against racism.
O’Reilly scolded MSNBC and CNN for not providing coverage of the ceremony that awarded Lieutenant Michael P. Murphy the Medal of Honor during their primetime shows. O’Reilly said that “[O]n their prime-time broadcast last night, CNN and MSNBC just said no to Lieutenant Michael Murphy and his proud family,” that the networks “despise the Bush administration and believe anything positive like American heroes in war zones, detract from their negative assessment of the administration” and that they should not claim to support the troops and ignore their heroism. MSNBC and CNN had covered the events during their daytime programs.
NBC News and MSNBC
O’Reilly has criticized NBC News and their affiliated cable service MSNBC several times for their coverage of the war in Iraq, claiming that it is biased toward the war’s opponents. He later called NBC News the most “anti-military news operation in the country,” when he cited an example of NBC correspondent William Arkin that called American troops “mercenaries.”
He also criticized the network of trying to downplay the War on Terror in the wake of American casualties in Iraq.
Robert Greenwald, who had directed the controversial documentary Outfoxed that criticized O’Reilly and the Fox News Channel, put together an event of homeless veterans criticizing O’Reilly for calling John Edwards dishonest when Edwards asserted that there were about 200,000 homeless veterans. O’Reilly denied Edwards claim, stating “They may be out there, but there are not many of them out there, OK. So if you know where there is a veteran sleeping under a bridge, you call me immediately, and we will make sure that man does not do it.” After government statistics supported Edwards, O’Reilly then said that there was no linkage between the economy and homeless veterans and claims that Veterans Affairs has up to 150,000 beds ready for them every night. O’Reilly felt Greenwald’s event was a “contrived” situation after O’Reilly’s producers had interviewed some of the homeless veterans whom were protesting and found out that some did not actually hear O’Reilly’s comments. O’Reilly blasted NBC’s Steve Capus and the New York Daily News for covering the event and claimed that Capus did not know about the nature of the event.
O’Reilly called NBC hypocritical for putting supporters of legalizing prostitution in the wake of Democratic Governor of New YorkEliot Spitzer resigning his post after allegedly engaging in the act in an effort and felt they would not be as defensive if a Republican had gotten in trouble.
Although he praised the late Meet the Press host Tim Russert in the past, O’Reilly criticized Russert for what he saw as a misinterpretation of what were seen as potentially racially insensitive comments by former President Bill Clinton. In his comments, Russert challenged Senator Hillary Clinton about her husband’s remarks regarding Senator Barack Obama, when Mr. Clinton referred to Obama’s position on Iraq as a “fairy tale.” O’Reilly said that Russert “should have known better” and realized the former President’s comments were regarding Obama’s Iraq policy and not his entire candidacy.
Tape doctoring incidents
O’Reilly would join in the criticism of others when NBC News was found to have doctored tapes on multiple occasions. The first was about accused killer George Zimmerman that portrayed Zimmerman as having a racial motivation. He also criticized veteran news correspondent Andrea Mitchell for her reporting of a doctored tape of Mitt Romney to portray him as out of touch. After the Sandy Hook Shooting, O’Reilly and others criticized MSNBC’s Martin Bashir of dishonesty when Bashir only played a part of the entire tape that portrayed the father of a victim being heckled when the entire tape showed the audience only saying something after he made it clear he was looking for an answer. O’Reilly criticized MSNBC host Rachel Maddow showed a tape of Senator John McCain portraying him as insensitive to the plight of a person who lost a family member to gun violence. Although Maddow did readily admit the tape may have been doctored, O’Reilly criticized her nonetheless for airing it knowing that it could have been edited.
O’Reilly has accused the print press of purposely misquoting him and using their hard news pages to further their editorial points of view. He has said that print media is too liberal and attacks opposing viewpoints.
In 2003, O’Reilly criticized the Los Angeles Times for endorsing then-governor Gray Davis, who was running against Arnold Schwarzenegger and a whole field of different candidates, including Republicans, Democrats and Independents, in a recall election. He said that he “has never seen a newspaper try to destroy someone as aggressively as the Times is doing.” He also criticized The New York Times on the same issue for referring to Schwarzenegger solely as a bodybuilder. He made the claim that Californians have canceled their subscriptions due to the “extreme left-wing bias” of the newspaper.
O’Reilly frequently criticizes The New York Times, accusing them of omitting information that would be damaging to left-wing organizations and causes.
On March 15, 2007, The New York Times ran an editorial titled “Immigration Misery” that had claimed a “screaming baby girl has been forcibly weaned from breast milk and taken dehydrated to an emergency room so that the nation’s borders will be secure.” Upon further investigation, the only two babies admitted to the hospital in the area of Bedford, Massachusetts (where the raid took place) were due to dehydration because of pneumonia and not as a result of being “forcibly weaned.” O’Reilly alleged that the information in the editorial was falsified and claimed The Times wanted to promote illegal immigration in order to make the illegal immigrants into legal US citizens and register them as Democrats.
On June 2, 2007, Homeland Security stopped a plot by four terror suspects thought to be linked to Al Qaeda. Authorities have alleged that the suspects were trying to blow up an oil pipeline in the Howard Beach section of New York City that carries jet fuel to JFK Airport. O’Reilly went on his program and told his listeners that he expected The Times to report it as a featured story on its Sunday edition for June 3, but found that the story was on page 37. A story that occupied the front page talked about brick laying in India. O’Reilly accused the newspaper of burying the story not to highlight a successful foiled terror plot because it contradicts the paper’s editorial point of view. O’Reilly claims that as polls show most Americans feel Republicans would do a better job of handling a terrorist threat than Democrats, The Times intentionally gave the news less exposure in hopes of influencing their readers’ focus away from issues that Democrats tend to poll weaker than Republicans in. O’Reilly has also said that the paper would highlight any terrorist attack if one was to occur so they may criticize the Bush Administration:
So The Times wins both ways. The paper diminishes the War on Terror by putting it on page 37, but if something bad ever happened, it can attack President Bush.
O’Reilly has accused the paper of being deceptive about television ratings for The O’Reilly Factor against that of MSNBC during the same time slot, citing that the paper felt that MSNBC was “competitive” with his program when O’Reilly’s ratings were significantly higher.
O’Reilly has questioned the paper’s interpretation of violence statistics among veterans of the military. His contention is that the paper is out to disparage the military as being overly violent after returning home from deployment in the War on Terror.
O’Reilly criticized the paper for running an article alleging Senator John McCain had an “inappropriate relationship” during the lobbyist controversy story the paper had. O’Reilly raised the question about why the paper had endorsed McCain on January 25, 2008 for the Republican nomination if they had information that alleged an inappropriate relationship.
In May 2009, O’Reilly severely criticized the paper as “corrupt” for dropping a story about a possible violation of campaign laws by ACORN and the Obama campaign. O’Reilly claimed that sworn testimony before Congress by a former ACORN employee, Anita Moncrief corroborated the story. O’Reilly stated:
Strong evidence suggests the paper killed a story linking ACORN to some Obama people. Instead they ran a general piece stating ACORN has a left-wing bias, knowing that story would be largely ignored while the Obama connection would not be.
In response, the New York Times ombudsman, Clark Hoyt stated it “was a normal and reasonable editorial decision” not to run the article. He said the Times had run four other stories on ACORN. The story in question had remained unpublished because Anita Moncrief had not provided independently verifiable proof. In addition, The Times ombudsman stated that Moncrief had not given sworn testimony to Congress as claimed by O’Reilly, and that she had credibility problems, having been fired from Acorn for employee theft.
O’Reilly has accused a few liberal political websites of “distorting the truth” and “engaging in hatred”:
There are no rules. These people will do and say pretty much anything to harm people with whom they disagree politically. The trend started back in the Clinton–Lewinsky days, and now thousands of bloggers are operating, throwing dirt all over the place. Now they’re not all bad. Some of these bloggers are good, accurate watchdogs. But there are plenty of awful ones.
In summer of 2007, O’Reilly said that the entire field of 2008 Democratic Presidential Candidates (aside from Senator Joseph Biden) went to the Yearly Kos convention that was sponsored by the Daily Kos. He has said that sites like the Kos are taking control of the Democratic Party through intimidation:
As we have been reporting, a group of far-left bloggers has succeeded in frightening most of the Democratic presidential candidates and moving the party significantly to the left, at least in the primary season. The lead intimidators are MoveOn, Media Matters and the vicious Daily Kos. These people savagely attack those with whom they disagree. And the politicians don’t want to become smear targets. So most of the Democratic candidates have agreed to speak at the Kos convention this coming weekend, something that is beyond shameful.
O’Reilly has compared the Huffington Post to the Nazis and the KKK. He also called MoveOn.org the “new Klan.” In response, Arianna Huffington wrote that O’Reilly had confused bloggers with anonymous commentors and suggested he enroll in “How to Use the Internet 101.” Huffington alleged that offensive comments are taken down from her site when confronted by one of O’Reilly’s producers. She also noted that offensive comments are posted by users of O’Reilly’s own site, billoreilly.com. O’Reilly alleged that Huffington had no standards of conduct and did not remove comments about wishing Nancy Reagan had died after she fell that were written on her site. “She says it is down, but it is not. She does not tell the truth.” O’Reilly later alleged that Huffington implied Pope Benedict XVI was a Nazi. O’Reilly referred to a satirical article written by comedian Chris Kelly, which mocked O’Reilly on Huffington’s website.
O’Reilly generally supports the notion of a clean environment, although he has said that he is not entirely certain that fossil fuels are the cause of global warming. Nonetheless, he has expressed support for a long-term strategy to curb fossil fuel use. He has said he would not support the Kyoto Treaty for economic reasons, but supports the use of fewer polluting agents, more conservation, and “tons more innovation” such as tax credits for alternative fuels. He has said that renewable energy is a waste of time because “God controls the climate” and that “nobody can control the climate except God, so give a little extra at mass”.
O’Reilly is a frequent critic of government welfare and poverty programs. He is also critical of the estate tax. However, he does not differentiate between the marginal tax rate (46 percent) and the effective tax rate (roughly nine percent ).
O’Reilly has said French unemployment and subsequent riots are the “common effects of socialist thinking”. He claims the French unemployment rate is high because of entitlements sanctioned by the French government, and that these entitlements make employers hesitant to hire young employees for fear that they will be required to give benefits to underperforming workers.
O’Reilly has been critical of companies doing business with countries that are hostile to the United States. O’Reilly criticized General Electric for doing business with Iran. O’Reilly cited how NBC News‘ correspondent John Hockenberry did a report on Dateline highlighting GE’s business relationship with the Bin Laden family and was criticized by the company, who owns NBC, for the Dateline report.
Free markets, profits, and the oil companies
O’Reilly questions the free market by suggesting that the oil companies need an excuse to raise prices thereby overlooking the fact that in a free market, oil companies have the right to increase prices so as to increase profits or for any other reason. Rather than praise oil companies for their record profits, O’Reilly has been critical of oil companies, claiming their record profits are evidence that they have price-gouged Americans with artificially high gas prices. and has said he is personally boycotting products by Exxon-Mobil. It therefore appears that O’Reilly does not recognize profit maximization as a virtue. He has often taken an opposing point of view to conservatives such as fellow Fox News analyst and commentator, Neil Cavuto. During one discussion on The O’Reilly Factor, Cavuto accused O’Reilly of “push[ing] populist nonsense.” He said blocking Brazilian ethanol imports was “awful” and has criticized both the Bush Administration and the Clinton Administration for not doing enough to stem the cost of oil from “foreign predators”.
In a May 8, 2006 article published at the Jewish World Review, O’Reilly said, “There is no question that illegal workers deliver more profit to business than American workers do. A Harvard study says that the employment of illegal foreign workers has driven down wages among American high school dropouts, the lowest labor pool rung, by 7 percent.”
Bill O’Reilly on his show The O’Reilly Factor has expressed the view that “if everybody followed the teachings of Jesus Christ, […] we’d have peace on earth, […] everybody would love one another, and we’d almost be an idyllic civilization.”
O’Reilly claims that the United States is not doing enough to make itself independent of foreign oil, stating that “There’s no way the ethanol industry could be dominated by five mega-companies. I mean corn and sugar cannot be carteled. The oil racket is simple: We control the marketplace, and you have to buy from us. … If Brazil can develop an ethanol industry that makes it completely independent of foreign oil, then the USA can.”
Story 2: Totalitarians of Lying Lunatic Left Attempt to Suppress Speech of Conservatives, Libertarians, and Classical Liberals — Nothing New — Go On Offense And Attack The Collectivist Totalitarians — Battle For Berkeley — Berkeley Protesters Take the Pepsi Challenge — Why the Right Won — Chief of Police Orders Berkeley Police To Stand Down — Videos
Does Free Speech Offend You?
Ben Shapiro on Free Speech, College Campuses, and The Regressive Left
Ben Shapiro – Practical Tactics For Fighting The Left
UC Berkley Must Be Disciplined For Furthering Leftist Violence Against Conservatives
Amid Mounting Controversy, Media Matters Says It’s Time for Bill OReilly to Go | Cheddar
HIDDEN CAM: Media Matters Brags About Sabotaging Roger Stone
Published on Oct 28, 2016
Project Veritas Action has released the sixth video in a multi-part series that is sending shockwaves through the DNC and the Clinton campaign. In a new video released by Project Veritas Action, a PVA journalist exposes how his pay for play with Robert Creamer landed him a meeting with Bradley Beychock, the President of Media Matters For America, an organization that has been attacking James O’Keefe for years.
During the meeting, Beychock gave the PVA journalist a tour of their offices. He also proudly boasted about the Media Matters assault on conservative writer and political consultant Roger Stone.
Battle of Berkeley: Why the Right Won
Published on Apr 17, 2017
Berkeley erupted into political violence on April 15th, 2017, with leftwing radicals attacking the Freedom Rally hosted by Trump supporters. The Antifa thugs were roundly defeated by the Freedom Rally attendees, but where did this violence start? I discuss the events that lead up to this day and uncover the progression of leftwing violence that’s destroying a city that once celebrated free speech.
Lauren Southern And The Madness Behind The Battle Of Berkeley
THE BEAUTIFUL LAUREN SOUTHERN; ProudBoys and Some Ugly Antifa
The Battle of Berkeley in 81 seconds
Berkeley Protesters Take the Pepsi Challenge
Battle of Berkeley 3 FULL DAY[ANTIFA Vs FREE SPEECH PROTESTERS]Patriots Day Rally Ft. Based Stickman
Trump Supporters chase Antifa down the street at FREE SPEECH Rally in Berkeley
Battle of Berkeley 3 as Antifa circled the park
2017 The Battle for Berkeley LARP!
Patriot’s Day Riot in the Streets
UC Berkeley Cancels Coulter Appearance Over Security Concerns
Conservative Commentator Ann Coulter To Speak At UC Berkeley
Ben Shapiro interviews Ann Coulter; Adios America; 7/13/2015; C-Span
UC Berkeley Presses Campus Republicans To Cancel Another Conservative Speaker
WARNING:TRUMP SUPPORTERS ATTACKED AT BERKELEY BY ANTI TRUMP PROTESTERS
Free Speech Battle For Berkeley, California! | Lauren Southern and Stefan Molyneux
Lauren Southern Coverage of Antifa vs Trump Supporters Battle
Berkeley April 15,Based stick man Antifa smashing
ANTIFA VS America Compilation
Antifa Reddit Admits They Lost Berkeley Battle with Trump Supporters
Berkeley April 15,BAMN leader Yvette Felarca assaults patriots
Berkeley Leftists Riot Against Milo (Mini Documentary: Arrest Yvette Felarca Part 2)
Handicap Senior Citizen U.S Military Vet Stands Up & Cucks Antifa
Is It Wrong To Bash Antifa Leftist Scum?
Berkeley Police Refuse To Stop the Riots – When Told People are Being Beaten, Officer Says “…and?”
Steyn: Media annoyed someone has outfaked their fake news
BILL O’REILLY EXPOSES GEORGE SOROS
EXPOSED : George Soros Owned Media Matters Sabotages Pro Trump Media
George Soros Lost Interview Compilation – Left Wing Oligarch
George Soros exposed!
George Soros Warns The World About Fox News And How Dangerous IT Really Is
George Soros, Puppet Master
Mark Levin: Media Matters is “A Criminal Enterprise”!
Andrew Breitbart — Media War
Thomas Sowell — Dismantling America
TAKE IT TO THE LIMITS: Milton Friedman on Libertarianism
Andrew Breitbart Predicted and Warned us about George Soro’s Media Matters Controlling our Media
One World Government & Collectivism – G. Edward Griffin
The Quigley Formula – G. Edward Griffin lecture
The Mainstream Media Are Enemies of Freedom, Agents of Tyranny and Must Be Overthrown
Super rich are in a conspiracy to rule the world – G. Edward Griffin – 2007
Antifa and Conservatives Throw Down At ‘Battle Of Berkeley’…
TEAM CROWDERMONDAY APRIL 17 2017
In the course of history, there have been many great battles. Thermopylae. Gettysburg. Tupac and Biggie. The forces of good and douchebag have long utilized beating the crap out of each other to resolve their grievances. Well, last weekend, yet another battle was had. Conservative and leftist blood alike was shed at what shall henceforth be referred to as the Battle of Berkeley…
For the third time this year, Trump supporters and Antifa clashed on the streets of Berkeley, California. The two forces met Saturday during the pro-Trump Patriot Day rally.
Berkeley Police have arrested at least 15 people this morning and afternoon, after antifascists met Trump supporters at a pro-Trump rally. Police attempted to maintain order with poles and fence mesh, but the barriers did not stop the two sides from violently engaging.
Trump supporters had organized a Patriot Day rally, starring Lauren Southern, a former reporter for conservative Canadian outlet The Rebel Media and Kyle Chapman, a man who achieved internet stardom as “Based Stickman” after assaulting a member of Antifa with a stick at the March 4 scuffle in Berkeley, among others.
Berkeley police have confiscated banned items such as knives, flagpoles, and sticks used as weapons.
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.
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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.