Senate Republicans Postpone Vote on US Tax Overhaul

Senate Republicans delayed a final vote on an overhaul of the U.S. tax code late Thursday amid furious, behind-the-scenes efforts to fine-tune the legislation to satisfy a small group of fiscal hawks whose support is needed to pass one of President Donald Trump’s core campaign promises.

“Senators will continue to debate the bill tonight,” Majority Leader Mitch McConnell, a Kentucky Republican, said, adding that further votes pertaining to the tax bill would occur later Friday.

Only hours earlier, Republicans appeared poised to pass a massive restructuring of federal taxes and deal a stinging defeat to Democrats. Several wavering Republicans had signaled support for the bill, including John McCain of Arizona.

Late in the day, however, three Republicans, led by Senator Bob Corker of Tennessee, clung to a demand that proposed tax cuts would be pared back if future U.S. economic performance did not meet projections.

Republicans have a two-seat Senate majority. Three defections from their ranks would torpedo the bill, given unified Democratic opposition.

With time needed to rewrite portions of the bill to satisfy the Corker contingent, Republican leaders opted to postpone further votes.

Details of plan

The underlying proposal would permanently cut corporate taxes, temporarily cut taxes on wages and salaries, boost some tax deductions Americans can claim while eliminating others, and increase the U.S. national debt, which currently is more than $20 trillion.

The nonpartisan Joint Committee on Taxation issued a report Thursday estimating the Republican plan would sap federal coffers by more than $1 trillion over a decade, even taking into account more than $400 billion in new revenue generated by a projected increase in economic activity.

“The [JCT] score ends the fantasy about magical growth, about unicorns and growth fairies showing that tax cuts pay for themselves,” Democratic Senator Ron Wyden of Oregon said.

Republicans insisted a vibrant economy was necessary for fiscal health, and that tax cuts would promote growth.

“If this legislation is signed into law, we are going to have a smaller deficit in future years than we are on the path to have now,” Senator Pat Toomey of Pennsylvania said. “The right incentives lead to stronger growth.”

Democrats shot back that the federal deficit and income inequality both expanded after every tax cut enacted in recent decades.

“Trickle-down economics did not work under Ronald Reagan, did not work under George W. Bush,” independent Senator Bernie Sanders of Vermont, who caucuses with Democrats, said. “It is a fraudulent theory.”

“All we are doing is shifting the tax to our kids,” Maine Senator Angus King, another independent who also caucuses with Democrats, said. “If 5-year-olds knew what we were doing and could vote, none of us would have a job.”

Corporate tax rate

The tax plan would cut corporate taxes from a maximum rate of 35 percent to 20 percent.

“Other countries have learned how to use their tax codes to entice U.S. businesses overseas, businesses around the globe, to their country — to move away from the United States to their countries’ more competitive tax code,” Republican Senator Cory Gardner of Colorado said. “That disparity between the U.S. tax code and foreign tax rates has literally chased jobs and wages out of this country.”

Some Democrats agreed that U.S. corporate taxes should be lowered, but insisted the Republican plan goes too far and would eventually trigger painful cuts to federal programs that benefit the poor and elderly in the future.

Massachusetts Senator Ed Markey accused Republicans of mounting a “con game” in which they tout tax breaks but gloss over “their brutal, vicious cuts to programs for the poorest, the sickest, the elderly, neediest in our country.”

In a sign that Republicans were confident of passing the bill, House Speaker Paul Ryan laid the groundwork for creating a bicameral committee to reconcile differences between the Senate’s legislation and a House version that was approved several weeks ago.

A unified tax plan would have to pass both chambers before it could go to the White House for Trump’s signature.

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Venezuelan Airline Barred from European Union Skies

Venezuela’s Avior Airlines has been banned from European Union skies after a commission determined it no longer meets international safety standards, another blow to troubled nation’s already beleaguered flight industry.

The European Commission announced Thursday that Avior had been added to a list of international airlines prohibited from flying within the union because the European Aviation Safety Agency detected “unaddressed safety deficiencies.”

No further details were provided.

The Venezuelan airline is one of a handful still offering international flight destinations as major carriers like United and Delta halt operations in the crisis-ridden nation. Air carriers have cited financial and safety concerns as reasons for suspending service.

An Avior flight made an emergency landing in Ecuador earlier this month after passengers described seeing fire and smelling smoke. Videos posted on social media showed nervous passengers wearing deployed oxygen masks.

“We thought it was our final moments,” one passenger said.

Avior operates flights within Venezuela, throughout Latin America and to Miami, Florida, and lists an office location in Madrid on its website.

The airline is certified under U.S. federal aviation regulations and Venezuela remains in good standing with the International Aviation Safety Assessment, the Federal Aviation Administration’s program to determine whether foreign countries provide sufficient safety and oversight of airlines that fly to the U.S.

Venezuela has grown increasingly isolated as an expanding list of airlines cancel service amid low customer demand and financial distress. The head of the International Air Transport Association has said that Venezuela owes $3.8 billion to several international airlines, a debt it is unexpected to repay anytime soon. The government defaulted on billions of dollars’ worth of bonds earlier this month.

The last United Airlines flight departed Caracas in late June, with crewmembers waving a Venezuelan flag out of the pilot’s window. American Airlines, Air France and Iberia are among the large international carriers that still offer service to the South American nation.

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OPEC Agrees Oil Cut Extension to End of 2018

OPEC agreed on Thursday to extend oil output cuts until the end of 2018 as it tries to finish clearing a global glut of crude while signalling it could exit the deal earlier if the market overheats.

Non-OPEC Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn’t flip into a deficit too soon, prices don’t rally too fast and rival U.S. shale firms don’t boost output further.

The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March.

Two OPEC delegates told Reuters the group had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market.

OPEC also decided to cap the output of Nigeria at around 1.8 million bpd but had yet to agree a cap for Libya. Both countries have been previously exempt from cuts due to unrest and lower-than-normal production.

The Organization of the Petroleum Exporting Countries has yet to meet with non-OPEC producers led by Russia, with the meeting scheduled to begin after 1500 GMT.

Before the earlier, OPEC-only meeting started at the group’s headquarters in Vienna on Thursday, Saudi Energy Minister Khalid al-Falih said it was premature to talk about exiting the cuts at least for a couple of quarters and added that the group would examine progress at its next meeting in June.

“When we get to an exit, we are going to do it very gradually… to make sure we don’t shock the market,” he said.

The Iraqi, Iranian and Angolan oil ministers also said a review of the deal was possible in June in case the market became too tight.

International benchmark Brent crude rose more than 1 percent on Thursday to trade near $64 per barrel.

Capping Nigeria, Libya

With oil prices rising above $60, Russia has expressed concerns that such an extension could prompt a spike in crude production in the United States, which is not participating in the deal.

Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.

“Prices will be well supported in December with a large global stock draw. The market could surprise to the upside with even $70 per barrel for Brent not out of the question if there is an unexpected interruption in supply,” said Gary Ross, a veteran OPEC watcher and founder of Pira consultancy.

The production cuts have been in place since the start of 2017 and helped halve an excess of global oil stocks although those remain at 140 million barrels above the five-year average, according to OPEC.

Russia has signaled it wants to understand better how producers will exit from the cuts as it needs to provide guidance to its private and state energy companies.

“It is important… to work out a strategy which we will follow from April 2018,” Russian Energy Minister Alexander Novak said on Wednesday.

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US Attorney General Meets With House Intelligence Panel

U.S. Attorney General Jeff Sessions met behind closed doors on Thursday with members of the House of Representatives Intelligence Committee as it investigates possible Russian efforts to influence the 2016 U.S. presidential election.

He was expected to spend at least two hours in the interview.

The panel is among several congressional committees, along with the Justice Department’s special counsel Robert Mueller, investigating alleged Russian interference in the campaign and potential collusion by President Donald Trump’s campaign.

Moscow has denied any meddling and Trump has said there was no collusion.

When he was a Republican U.S. senator, Sessions was an early supporter and close adviser to Trump during his run for the White House.

Later on Thursday, the intelligence committee said it was meeting with Erik Prince, who founded the private military contractor Blackwater and also was a supporter of Trump’s presidential campaign.

Reporting by Sarah N. Lynch and Patricia Zengerle; Editing by Bill Trott.

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Trump Could Name CIA’s Pompeo to Replace Top Diplomat Tillerson

U.S. President Donald Trump within the next several weeks could name Central Intelligence Agency Director Mike Pompeo to replace Secretary of State Rex Tillerson, according to media reports quoting senior administration officials on Thursday.

Several U.S. news outlets reported that the shakeup of Trump’s top national security team has been under consideration for some time now, although it was not clear that Trump has made a decision.

In a brief exchange with reporters at the White House, Trump, when asked about Tillerson’s fate, said, “He’s here. Rex is here.” The president made no other comments.

The White House downplayed the reports of Tillerson’s departure.

“As the president just said, ‘Rex is here.’ White House spokesperson Sarah Huckabee Sanders said. “There are no personnel announcements at this time. Secretary Tillerson continues to lead the State Department and the entire cabinet is focused on completing this incredibly successful first year of President Trump’s administration.”

​Reports say under the plan, Arkansas Republican Senator Tom Cotton, a staunch ally of Trump on national security issues, would replace Pompeo as the CIA chief.

Tillerson’s departure from the State Department would end a troubled tenure for the former ExxonMobil chief executive, who has clashed with Trump over dealing with the nuclear threat posed by North Korean leader Kim Jong Un.

Brookings Institution Senior Fellow Thomas Wright told VOA, “The Secretary of State is only influential if he is perceived as close to the president. Now that the White House has told multiple media outlets it intends to replace Rex Tillerson, he has been stripped of any power he enjoyed.”

But Tillerson has given no indication he plans to resign, saying in early October, “There has never been a consideration in my mind to leave. I serve at the appointment of the president and I am here for as long as the president feels I can be useful to achieving his objectives.”

Senator Bob Corker, the chairman of the Senate Foreign Relations Committee, said he spoke with Tillerson on Thursday. “He’s conducting business, as is the norm, and is unaware of anything changing,” Corker told reporters.

Trump routinely has disparaged Kim Jong Un as “Little Rocket Man” and threatened to unleash U.S. military power on North Korea if it attacks the U.S. or its allies. Months ago, Trump told Tillerson in a Twitter comment to stop wasting his time trying to negotiate with the Pyongyang dictator.

“Save your energy Rex, we’ll do what has to be done!” Trump said.

At one point, the 65-year-old Tillerson was quoted as calling Trump a “moron” after a Pentagon meeting.

He did not deny making the disparaging assessment of the U.S. leader’s intellect, instead deflecting questions about the story, saying it was part of Washington political games. “I’m not going to deal with that petty stuff,” he said.

Pompeo, a 53-year-old former three-term congressman from the Midwestern state of Kansas, apparently has won Trump’s favor while giving him the CIA’s daily intelligence briefings in person at the White House, rather than delegating that responsibility to a staff aide.

Senator Cotton is a staunchly conservative lawmaker who has often voiced support for Trump’s policies. He has signaled that he would take the job as CIA director if Trump offers it.

 

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More Than Half the World’s Population Lacks Social Protection

The International Labor Organization says a majority of the world’s population, four billion people, have no social protection, leaving them mired in an endless cycle of poverty. 

The report says 45 percent of the global population is covered by at least one social benefit.  But that leaves 55 percent without any social protection, a situation ILO Director General Guy Ryder calls unacceptable.

“That means that they do not receive any child benefit, any maternity benefit, any unemployment protection, any disability benefit, any old age pension and that they do not actively contribute to social security systems,” Ryder said.

The consequences are severe and tangible.  The report finds the lack of social protection leaves people vulnerable to illness, poverty, inequality and social exclusion.  The ILO regards the situation as a significant obstacle to economic growth and social development.

Ryder tells VOA governments would benefit from considering social protection as an investment in their populations.

“Social protection is a human right and we should be pursuing it because it is a human right,” Ryder said. “But, also, I think there is a great deal of evidence to demonstrate that when social protection systems are in place and where they function well and one can think of the whole cycle of protection from kids right through to old age, then you reap economic benefits from it.” 

The report says the lack of social protection is most acute in Africa, Asia, and the Arab States.  It recommends those regions increase their public expenditure to at least guarantee basic social security coverage to all their people.

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Eurozone Recovery Fueling Jobs But Wages, Prices Lag

The buoyant economic recovery across the 19-country eurozone has pushed unemployment down to its lowest level in nearly nine years but has yet to translate to a sustained pick-up in wages and prices, official figures indicated Thursday.

 

Eurostat, the European Union’s statistics agency, said the jobless rate fell to 8.8 percent in October, from 8.9 percent the previous month. That’s the lowest since January 2009, when the region, like the world economy, was reeling from the global financial crisis and the ensuing deep recession.

 

Across the region, there were 14.34 million people out of work, down 1.5 million in the past year. That’s clear evidence that the economic recovery, which has gathered momentum during 2017, has invigorated the jobs market, especially in some of those countries that saw the biggest spikes in unemployment after the financial crisis. That’s especially true in Spain, which for much of the past few years lumbered under the weight of an unemployment rate of around 25 percent. Now, following strong growth, unemployment has fallen to 16.7 percent.

 

Though the eurozone is growing strongly, inflation is still a way short of the European Central Bank’s goal of just below 2 percent, a level it considers healthiest for the economy.

 

Eurostat said its headline measure of consumer price inflation rose to 1.5 percent in November, largely because of higher energy prices. While up from October’s 1.4 percent, it was below expectations in markets for a rise to 1.6 percent and indicates that underlying inflation pressures largely related to wages remain modest despite falling unemployment. The core rate of inflation, which strips out volatile items like food, energy, alcohol and tobacco, was stuck at 0.9 percent in November – again below expectations of a rise to 1 percent.

 

ECB President Mario Draghi has said there are a number of reasons why wages are not rising strongly, including the possibility that after years of low interest rates and weak inflation, wage negotiators may have been focused more on keeping jobs than on securing higher pay. He said these kinds of factors are likely to be “transitory” and that the recent “remarkable” increases in employment should start to show in a rise in nominal wages. With spare capacity in the economy diminishing, the hope is that a pick-up in wages that can support consumer demand and give inflation a boost.

Over the past few years, the ECB has enacted a series of stimulus measures, including cutting its main interest rate to zero, in the hope of getting inflation back up to target. Recently it eased up on its bond-buying stimulus program, which aims to keep market interest rates low, amid mounting evidence of economic growth.

 

Economists are not predicting any further changes soon, with Thursday’s figures adding to that perception.

 

“Today’s figures are unlikely to prompt the bank to accelerate the process of monetary normalization,” said Pablo Shah, an economist at the Center for Economics and Business Research.

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Facebook Suspends Ability to Target Ads by Excluding Racial Groups

Facebook Inc. said on Wednesday it was temporarily disabling the ability of advertisers on its social network to exclude racial groups from the intended audience of ads while it studies how the feature could be used to discriminate.

Facebook’s chief operating officer, Sheryl Sandberg, told African-American U.S. lawmakers in a letter that the company was determined to do better after a news report said Facebook had failed to block discriminatory ads.

The U.S.-based news organization ProPublica reported last week that, as part of an investigation, it had purchased discriminatory housing ads on Facebook and slipped them past the company’s review process, despite claims by Facebook months earlier that it was able to detect and block such ads.

“Until we can better ensure that our tools will not be used inappropriately, we are disabling the option that permits advertisers to exclude multicultural affinity segments from the audience for their ads,” Sandberg wrote in the letter to the Congressional Black Caucus, according to a copy posted online by ProPublica.

It is unlawful under U.S. law to publish certain types of ads if they indicate a preference based on race, religion, sex or certain classifications.

Facebook, the world’s largest social network with 2.1 billion users and $36 billion in annual revenue, has been on the defensive for its advertising practices.

In September, it disclosed the existence of Russia-linked ads that ran during the 2016 U.S. election campaign. The same month it turned off a tool, also reported by ProPublica, that had inadvertently let advertisers target based on people’s self-reported jobs, even if the job was “Jew hater.”

Sandberg said in the letter that advertisers who use Facebook’s targeting options to include certain races for ads about housing, employment or credit will have to certify to Facebook that they are complying with Facebook’s anti-discrimination policy and with applicable law.

Sandberg defended race- and culture-based marketing in general, saying it was a common and legitimate practice in the ad industry to try to reach specific communities.

U.S. Representative Robin Kelly of Illinois, a member of the Congressional Black Caucus, said Facebook’s action was appropriate.

“When I first raised this issue with Facebook, I was disappointed,” Kelly, a Democrat, said in a statement. “When it became necessary to raise the issue again, I was irritated. Thankfully, we’ve been able to establish a constructive pipeline of communication that’s resulted in a positive step forward.”

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Cloud Clothing Packs Computing Power Under Your Shirt

For individuals, storing information in the cloud means it can be available to them anywhere they have a connection to the internet. It can be cheap, and it can be useful, but because all that data is going back and forth, it’s not quite as secure as storing everything on your phone or home computer. But what if you could wear your information? That’s the idea behind some National Science Foundation-supported research into cloud clothing. VOA’s Kevin Enochs reports.

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