Category Archives: Investing

The “Cannabis State of the Union 2018,” annotated

By Christopher Ingraham

Consultant Angel Martos holds a marijuana leaf at the Canna Pi medical marijuana dispensary in Seattle, Washington, November 27, 2012. REUTERS/Anthony Bolante

Tomorrow is 4/20, an unofficial day of celebration for marijuana users nationwide.

To mark the occasion Congressman Earl Blumenauer (D.-Ore.), founder and co-chair of the Congressional Cannabis Caucus, released what he’s calling the “Cannabis State of the Union 2018.” It’s a reckoning of the state of domestic marijuana policy and a look forward to the debates we’re likely to see in the coming year.

The speech covers a lot of ground, so we’ve annotated it below.

CONGRESSMAN EARL BLUMENAUER: For the two decades after cannabis was listed as a Schedule 1 controlled substance, we were spinning our wheels. While a few states decriminalized marijuana, starting with Oregon in 1973, we were basically overwhelmed by Richard Nixon’s misguided War on Drugs.

In 1996, with California’s vote to legalize medical marijuana—followed shortly thereafter by Arizona and Oregon—we moved into a new period of activism driven by the will of the voters, not the politicians. Victories for medical marijuana and decriminalization began piling up in state after state.

The adult-use victories of 2012 and 2014 in Colorado, Oregon, Washington, Alaska, and the District of Columbia signaled the shift to broader acceptance and increasingly sophisticated campaigns. The wins in eight of nine states’ elections in 2016 cemented the revolution.

The public, and some politicians, finally understood that it was time to end the failed prohibition of cannabis. Whether it was because of the merits of the case for legalization or the power of the politics, or both, people started to get on board.

Last year, I founded the bipartisan Congressional Cannabis Caucus to involve more members of Congress with our efforts. There are now dozens of pieces of legislation to end federal interference with state-legal cannabis, to de-schedule …read more


The Republican plan to tighten food stamp work requirements is advancing — without a single Democrat’s vote

By Caitlin Dewey

Members of the House Agriculture Committee, from left, Rep. Darren Soto (D-Fla.), Rep. Collin C. Peterson (D-Minn.), Rep. Tom O’Halleran (D-Ariz.), Chairman K. Michael Conaway (R-Tex.), and Rep. Al Lawson (D-Fla.) debate a controversial proposal included in the Republican Farm Bill on Wednesday. (J. Scott Applewhite/AP)

House Republicans pushed forward Wednesday with a plan to strengthen work requirements for food stamps, even as Democrats excoriated the proposal as an “ideological crusade” that would hurt the poor, burden state governments and endanger the passage of major food and farming legislation.

The plan, introduced last week as part of the 2018 Farm Bill, would dramatically expand mandatory state workfare programs in the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, and require that most adults between 18 and 59 enroll or work at least part time to receive benefits.

[GOP proposes stricter work requirements for food stamp recipients, a step toward a major overhaul of the social safety net]

In a 26-to-2o vote on party lines, the House Agriculture Committee moved to advance the Farm Bill, with the SNAP proposals, to the House floor. Republicans have pitched it as a common-sense revision that would refocus services on the neediest families while providing opportunities for adults who are work-capable.

But over the course of more than five hours, Democrats on the usually placid committee denounced the Republican plan as “heartless” and “deceitful” and accused Committee Chairman K. Michael Conaway (R-Tex.) of shutting them out of negotiations.

Farm groups have begun to fear the divisions could delay or prevent passage of the 2018 Farm Bill, the $867 billion package that covers the bulk of the country’s agricultural and nutrition programs, including crop insurance, farm credit, trade, conservation, agricultural research and rural development.

“What are we doing here? Is …read more


Eric Holder tells Trevor Noah he’s not trying to ‘gerrymander for Democrats’

By Christopher Ingraham

Former Attorney General Eric Holder is now in charge of a Democratic organization dedicated to overturning Republican gerrymanders, but that doesn’t mean he wants to replace them with districts drawn to favor Democrats, he said Tuesday.

Instead, he told “The Daily Show” host Trevor Noah, he wants to put the parties on an even playing field by drawing fairer, more competitive maps. And as Holder’s National Democratic Redistricting Committee sees it, that requires electing Democrats to statewide office first.

“I wouldn’t have signed up for this if it was an attempt to gerrymander for Democrats,” Holder said, adding that he believed Democrats didn’t need gerrymandering because they are “right on the issues” and have “the support of the people.”

[This is the best explanation of gerrymandering you will ever see]

Holder’s committee says that electing Democrats is one part of its four-part strategy to end gerrymandering, which also includes challenging gerrymanders in court, engaging voters in the redistricting process, and enacting state-level reforms to ensure fairer congressional maps.

It’s that last part — changing laws around redistricting — that independent experts say is key to mitigating gerrymandering. In most states, redistricting is handled like any other piece of legislation, with partisan lawmakers drawing maps that are subject to a governor’s veto.

This creates an incentive for political parties to draw maps that disadvantage their opponents, especially in states where a single party has control over both the legislature and the governor’s mansion.

That’s exactly what happened in 2011: Republicans drew maps in a number of states that gave themselves an overwhelming partisan advantage relative to Democrats. In 2012, for instance, Republican House candidates in Wisconsin won less than 50 percent of the statewide popular House vote, …read more


Lawrence Summers: How to actually help Puerto Rico

By Lawrence H. Summers

People carry a Puerto Rican flag in San Juan last year as they protest looming austerity measures. Even before Hurricane Maria, the island had an economic crisis and crushing debt. (AP Photo/Danica Coto)

Desmond Lachman, Brad Setser and Antonio Weiss have written a strong analysis of the Puerto Rico situation. If ever there was a disconnect between underlying reality and what is happening in financial markets, it is the boom in Puerto Rican debt which has nearly doubled the value of some of its debt securities over the last few months.

Markets are now pricing that close to 20 billion more dollars will come out of Puerto Rico to investors than they were at the end of 2017, following Puerto Rico’s own government, which is inexplicably projecting a substantially greater ability to repay debt today than before the hurricane.

What is going on? True, there may have been some excessive panic and liquidation selling in markets right after the hurricane. And the federal government is infusing more money into Puerto Rico than might have been expected in the immediate aftermath of the hurricane. But there is something profoundly troubling about speculators in Puerto Rican debt reaping windfalls even as estimates of hurricane damage are revised up, tax reform legislation undermines Puerto Rican competitiveness, out-migration increases, political cleavages increase, layoffs from the public sector are set to increase and outside observers become more pessimistic about Puerto Rico’s economic prospects.

The Puerto Rican government’s upward revision of 10 percent in its economic forecast for 2023 over the year since the hurricane is analytically indefensible. In all likelihood, last year’s forecast should have been revised downward, not upward. If the Oversight Board is to maintain its credibility, it will reject the government’s forecasts.

Credibility is important. My experience with crises is that they are never resolved until …read more


Trump’s top economic adviser: ‘Never believe the CBO … never believe them’

By Jeff Stein

Conservative commentator Larry Kudlow, now leading President Trump’s National Economic Council, took aim at the Congressional Budget Office on April 17. (Bryan R. Smith/AFP/Getty Images)

President Trump’s top economist blasted the Congressional Budget Office on Tuesday, dismissing the scorekeeper’s recent projections that the Republican tax law would push the nation’s annual deficit over $1 trillion.

“Never believe the CBO. Very important: Never believe them,” Larry Kudlow, director of Trump’s National Economic Council, said during an interview on “Fox & Friends.” “They’re always wrong, especially with regard to tax cuts, which they never score properly.”

Trump reportedly watches “Fox & Friends” regularly and often reacts to the programming either on Twitter or with proposals for action.

Kudlow’s remarks reflect a widespread belief in the Republican Party that the CBO has failed to adequately account for higher economic growth when estimating the tax law’s effect on the deficit. The CBO said the tax law will cut government revenue by $1.8 trillion over the next 10 years, or by $1.3 trillion when factoring in potentially higher growth spurred by the law.

Kudlow, a longtime television commentator who was tapped last month to lead the economic council, said CBO’s estimates of growth under the law should be much higher. He argued that the tax law will create far greater economic growth than most nonpartisan forecasters estimate.

Although some in Congress and the White House have questioned CBO employees’ integrity and accused them of being partisan, Kudlow clarified that he meant his statement as a critique of their methodology — not their motives.

“The CBO people are professionals. This is not a personal attack,” he said. “But their record on tax cuts is not good.”

Several other nonpartisan studies, as well as Wall Street analysts, also have disputed Republicans’ contention that the tax law will pay for itself. The Joint Committee on Taxation …read more


Hours after tweeting about interest rates, Trump nominates two people to Federal Reserve

By Heather Long

A security guard walks in front of an image of the Federal Reserve. (Kevin Lamarque/Reuters).

President Trump nominated two more people Monday to serve on the board of the Federal Reserve, the institution that sets interest rates and plays a large role in steering the U.S. economy and banking system.

Trump nominated Richard Clarida, a Columbia University economics professor and longtime adviser to one of the world’s largest bond firms, to be vice chairman at the Fed serving under Chairman Jerome H. Powell. The Fed has indicated it intends to raise interest rates at least three times this year and another three times in 2019. If that path holds, interest rates would probably be over 2 percent by the end of this year and near 3 percent by the end of the following year.

The president also nominated Michelle Bowman, the current bank commissioner in Kansas, to be a Fed board member. She is Trump’s first female choice for the Fed out of the five people he has nominated so far. Clarida and Bowman’s positions require Senate hearings and confirmation before they can take the jobs, much like the process for Supreme Court justices.

Just hours before announcing the nominees, Trump tweeted that U.S. interest rates were rising, and he left it unclear whether he wanted that to continue. His nominees appear unlikely to push for raising rates any faster than the pace Powell has laid out since he took over as chairman in February.

[Trump contradicts his Treasury Department, accuses China and Russia of currency cheating]

Most presidents get to nominate a few people to the Fed, but Trump has an unusually large opportunity to shape America’s central bank for years to come because there were so many openings on the Fed’s board when he …read more


There’s a ‘tsunami’ of companies applying for relief from Trump’s steel and aluminum tariffs

By Heather Long

President Trump speaks to a crowd gathered at a union and apprentice training center in Ohio. (Jeff Swensen/Getty Images)

The fight over how far President Trump will go to protect America’s steel and aluminum industries now rests largely in the hands of Commerce Department officials, who face a flood of applications from American companies seeking exemptions from Trump’s newly imposed tariffs.

Commerce Secretary Wilbur Ross and his team must determine which U.S. companies get a waiver and which ones have to pay the boarder taxes to bring in metals from countries as diverse as Switzerland, Japan, Turkey, Russia and China.

More than 1,200 applications for waivers from the steel tariffs and 125 requests for exemptions from the aluminum tariffs have come in so far, the Commerce Department confirmed Friday to The Washington Post, an early indication of pressure building on Trump to back off on additional tariffs and lower the import taxes currently in place. The tariffs have only been in place for three weeks, and many lawyers and business leaders involved in the steel industry say this is just the beginning of the push for greater exemptions.

“A tsunami is coming,” said Kevin Dempsey, general counsel at the American Iron and Steel Institute. “I anticipate there will be several thousand exclusion requests filed.”

[Trump contradicts his Treasury Department, accuses China and Russia of currency cheating]

Each exemption provides relief to a U.S. business, but it also waters down the effectiveness of the tariffs, which Trump said are necessary to protect and rebuild America’s steel and aluminum industries.

Trump put tariffs of 25 percent on steel imports and 10 percent on aluminum imports, but he quickly excluded several countries from the tariffs, significantly weakening the impact. If the Commerce Department grants hundreds — or even thousands — …read more


Kentucky’s tax cut for the top 5 percent survives despite governor’s veto

By Jeff Stein

Republican lawmakers in Kentucky capped weeks of feuding with the state’s GOP governor by overturning his veto of their tax package. (Jenny Sevcik/The Messenger-Inquirer/AP)

Republicans in Kentucky’s state legislature overturned Gov. Matt Bevin’s (R) vetoes of their tax overhaul and budget plan Friday, capping a dramatic confrontation between members of the same party that has also seen thousands of teachers descend on the state Capitol in protests for better pay.

The impasse between the governor and the Republican lawmakers kicked off earlier this month, when the state legislature unveiled a tax package to dramatically cut income and business taxes in the state. The plan aimed to pay for those cuts by dramatically increasing sales taxes, leading one analysis to project that it would wind up raising taxes on all but the wealthiest 5 percent of state residents.

[Kentucky legislators send tax cuts for wealthy, tax hikes for the other 95 percent to governor’s desk]

Meanwhile, the state’s legislature separately approved a budget that raised the state’s per-pupil funding to $4,000, from $3,700, amid intense pressure from teachers who demonstrated at the Capitol and throughout the state after Bevin vetoed both measures.

Republicans in the state legislature defended the tax measure, in part, as necessary to avoid deeper cuts to education and to fund teachers’ pensions, with nonpartisan staff in Kentucky’s House of Representatives saying that the tax package would generate an additional $239 million in state revenue in 2019 and an extra $248 million in 2020.

But the state’s budget director said later that those numbers were inaccurate and that the tax package would actually cost Kentucky $50 million over the next two years.

“We want to come up with a smart, thoughtful, more balanced approach,” Bevin said at a news conference where he …read more


Senators have more money now. Will they finally pay their interns?

By Danielle Paquette

Congressional aides and interns wait for a tram on Capitol Hill. (AP Photo/J. Scott Applewhite)

The $1.3 trillion spending bill that President Trump signed last month contained a subtle yet dramatic shift for U.S. senators.

The budget for “Senate operations,” the pocket of money members use for staffing, grew from roughly $871 million last year to $920 million for 2018 — a bigger raise (6 percent) than from 2014 to 2017 (1.4 percent).

Carlos Mark Vera, founder of advocacy group Pay Our Interns, saw the extra cash as an opportunity to pressure the country’s leaders into changing a norm he says is troubling.

Most congressional interns aren’t paid at all. So, he said, college students who nab the positions rely on funds from parents or work part-time jobs on top of their hectic Washington schedules.

“I was fighting not to fall asleep,” Vera said of interning for former Rep. Joe Baca (D-Calif.) without pay in 2012 and simultaneously working as a front-desk assistant at American University.

Plus, he said, he was one of the only Latinos around. Four-fifths of voting members in the House and Senate are white, according to the latest numbers from the Pew Research Center.

“Something I vividly remember,” he said, “was walking down the hallways of Congress and realizing no one looked like me but the janitors.”

On Thursday, Vera started sending letters to senators of both parties who do not offer paid internships, urging them to consider the rising cost of living in the District, where the median monthly rent for a one-bedroom apartment is about $2,000.

“I write to encourage your office to take action and use some of the surplus funds to launch a paid internship program,” he wrote, “so that, once again, opportunities on Capitol Hill are open to all young people, and not just those …read more


Sen. Bob Corker says the GOP tax law may be one of his ‘worst votes’ if new report is correct

By Jeff Stein

Sen. Bob Corker (R-Tenn.) has tried reconciling his vote for the Republican tax law with his fears about the U.S. deficit. (Joshua Roberts/Reuters)

Sen. Bob Corker (R-Tenn.) is expressing alarm about new projections of the Republican tax law’s effect on the national deficit, saying that if they prove true, he may have made a mistake supporting the bill.

The latest estimates from the Congressional Budget Office are similar to other estimates that were available to Corker both when he voted for the final version of the bill and when he voted against an earlier version because of its effect on the deficit.

“If it ends up costing what has been laid out here, it could well be one of the worst votes I’ve made,” Corker said at a hearing of the Senate Budget Committee on Wednesday, in comments first reported by The Hill’s Niv Elis. He added in an interview with The Washington Post: “If this is accurate, obviously it’s a terrible vote.”

[Deficit to top $1 trillion per year by 2020, CBO says]

Earlier this week, the CBO said the new tax law would cost the United States $1.8 trillion over the next decade, in part because of its significant reduction in the tax rate paid by corporations. When factoring in extra growth created by the tax overhaul, the law is projected to cost at least $1.3 trillion, the analysis showed.

The Joint Committee on Taxation (JTC), Congress’s official scorekeeper, estimated in December that the tax law would cost $1.4 trillion over 10 years, or about $1 trillion when accounting for the effects of higher growth. The nonpartisan agency also said in late November that the tax plan would increase the deficit by $1.4 trillion, or by a little more than $1 …read more