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1  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Georgetown Dean on: Today at 11:20:21 AM
2  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Jenkins/WSJ: A different take on: Today at 11:19:10 AM
 By Holman W. Jenkins, Jr.
June 27, 2017 7:00 p.m. ET

In the Sunday Washington Post’s 7,000-word account of what President Obama knew about Russian election meddling and what he did about it, one absence is notable. Nowhere in the Post’s lengthy tick-tock is Mr. Obama presented with evidence of, or described as worried about, Trump collusion with Russia.

Moscow intervened in the election eight ways from Sunday, but it’s clearer than ever that what’s occupied Americans for the past six months are baseless accusations about the Trump campaign.

Among the evidence on Mr. Obama’s desk was proof that Vladimir Putin was personally directing the Russian espionage effort. For a variety of sensible reasons, though, the White House and U.S. intelligence also concluded that Russia’s meddling was “unlikely to materially affect the outcome of the election.”

President Obama made at least one inevitably political calculation: Hillary Clinton was going to win, so he would keep relatively mum on Russian interference to avoid provoking “escalation from Putin” or “potentially contaminating the expected Clinton triumph,” in the Post’s words.

Strangely missing from the Post account, however, is one Russian intervention, revealed by the paper’s own earlier reporting, that may really have, in farcical fashion, elected Donald Trump.

This was FBI Director James Comey’s ill-fated decision to clear Hillary Clinton publicly on intelligence-mishandling charges. His choice, it now appears, was partly shaped by a false intelligence document referring to a nonexistent Democratic email purporting to confirm that then-Attorney General Loretta Lynch had vowed to quash any Hillary charges.

On April 23, the New York Times first alluded to the document’s existence in an 8,000-word story about Mr. Comey’s intervention.

On May 24, the Post provided a detailed description of the document and revealed that many in the FBI considered it “bad intelligence,” possibly a Russian plant.

On May 26, CNN adumbrated that Mr. Comey “knew that a critical piece of information relating to the investigation into Hillary Clinton’s email was fake—created by Russian intelligence—but he feared that if it became public it would undermine the probe and the Justice Department itself.”

“In at least one classified session [before Congress],” CNN added, “Comey cited that intelligence as the primary reason he took the unusual step of publicly announcing the end of the Clinton email probe. . . . Comey did not even mention the other reason he gave in public testimony for acting independently of the Justice Department—that Lynch was compromised because Bill Clinton boarded her plane and spoke to her during the investigation.”

Why has this apparently well-documented, and eminently documentable, episode fallen down the memory hole, in favor of a theory for which there is no evidence, of collusion by the outsider Mr. Trump?

The alternative history is incalculable, but consider: If Mr. Comey had followed established practice, the Hillary investigation would have been closed without an announcement, or the conflicted Ms. Lynch or an underling would have cleared Mrs. Clinton. How would this have played with voters and the media? Would the investigation’s reopening in the race’s final days, with discovery of the Weiner laptop, have taken place? Would the reopening have become public knowledge?

The noisy, obnoxious ways Russia meddled amounted to nothing. The public was able to discount them. It was only through a bumptious act of our own law-enforcement community, in a way the public didn’t know at the time may have been influenced by planted Russian intelligence, that the Kremlin conceivably really may have affected an extraordinarily close race in the Electoral College.

What also emerges from the Post’s tick-tock, as well as from public testimony by U.S. intelligence chiefs, is that Russia did not seek to hide its meddling. The Russian goal was to sow confusion and bring disrepute on the U.S. leadership class. If so, any investigation of Russian meddling that fails to focus on the Comey actions will amount to a coverup.

Expect a coverup: The truth is absolutely unacceptable to the establishment that Special Counsel Robert Mueller represents. There is no appetite for the truth among Democrats: They cling to Mr. Comey’s legal exoneration of Mrs. Clinton in the server matter.

There is no appetite among Republicans: Messrs. Comey and Mueller are Republicans, promoted in their careers by Republican presidents. There is no appetite in the Trump White House, which doesn’t want its win tainted in history by a Russian dirty trick.

There is no appetite in the Kremlin: Mr. Putin knows that relations with the American superpower are slipping toward an all-out hostility that he can’t afford.

In the U.S., to acknowledge the truth would be to complete the task Russia set itself in discrediting the U.S. leadership class.

A coverup is the only way to go.

Appeared in the June 28, 2017, print edition.
3  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Middle East: War, Peace, and SNAFU, TARFU, and FUBAR on: Today at 11:11:13 AM
How many years have you seen me using that and not asked?  cheesy cheesy cheesy

Pravda on the Hudson a.k.a. The New York Times  evil cheesy cheesy
4  Politics, Religion, Science, Culture and Humanities / Politics & Religion / McCarthy: SCOTUS on the travel moratorium on: June 27, 2017, 07:48:04 PM
Maybe less good than we thought.

McCarthy is a true heavyweight in these things and his analysis deserves serious consideration"
5  Politics, Religion, Science, Culture and Humanities / Politics & Religion / POTH: Commando Raids on ISIS yieled vital data on: June 27, 2017, 07:36:36 PM
I'm thinking there are some details here that would be better off not here , , ,

Commando Raids on ISIS Yield Vital Data in Shadowy War
Armed men identified by the Syrian Democratic Forces as American Special Operations forces in the Syrian province of Raqqa last year. Credit Delil Souleiman/Agence France-Presse — Getty Images

WASHINGTON — One late afternoon in April, helicopter-borne American commandos intercepted a vehicle in southeastern Syria carrying a close associate of the Islamic State’s supreme leader, Abu Bakr al-Baghdadi.

The associate, Abdurakhmon Uzbeki, was a rare prize whom United States Special Operations forces had been tracking for months: a midlevel but highly trusted operative skilled in raising money; spiriting insurgent leaders out of Raqqa, the Islamic State’s besieged capital in Syria; and plotting attacks against the West. Captured alive, Mr. Uzbeki could be an intelligence bonanza. Federal prosecutors had already begun preparing criminal charges against him for possible prosecution in the United States.
As the commandos swooped in, however, a firefight broke out. Mr. Uzbeki, a combat-hardened veteran of shadow wars in Syria and Pakistan, died in the gun battle, thwarting the military’s hopes of extracting from him any information about Islamic State operations, leaders and strategy.

New details about the operation, and a similar episode in January that sought to seize another midlevel Islamic State operative, offer a rare glimpse into the handful of secret and increasingly risky commando raids of the secretive, nearly three-year American ground war against the Islamic State. Cellphones and other material swept up by Special Operations forces proved valuable for future raids, though the missions fell short of their goal to capture, not kill, terrorist leaders in order to obtain fresh, firsthand information about the inner circle and war council of the group, also known as ISIS.

 “If we can scoop somebody up alive, with their cellphones and diaries, it really can help speed up the demise of a terrorist group like ISIS,” said Dell L. Dailey, a retired commander of the military’s Joint Special Operations Command and the chairman of the Combating Terrorism Center at West Point.

American military and intelligence officials caution that the Islamic State is far from defeated, particularly with a sophisticated propaganda apparatus that continues to inspire and, in some cases, enable its global following to carry out attacks. But in the self-proclaimed caliphate across swaths of Iraq and Syria, the terrorist group’s last two major strongholds are under siege, many senior leaders have fled south to the Euphrates River Valley, and its legions of foreign fighters are battling to the death or slipping away, possibly to wreak havoc in Europe.

The race to drive the jihadists out of eastern Syria, where they have held sway for three years, has gained new urgency as rival forces converge on ungoverned parts of the region. Syrian forces and Iranian-backed militias that support them are advancing east, closer to American-backed fighters battling to reclaim Raqqa. Russia threatened on Monday to target American and allied aircraft the day after the United States military brought down a Syrian warplane.

This highly volatile environment puts an increasing premium on the Special Operations missions.

Despite his nom de guerre, Mr. Uzbeki, 39, was a native of Tajikistan, not Uzbekistan, and honed his fighting skills with the Islamic Movement of Uzbekistan, a Taliban-allied jihadist group, according to an American military official. About 10 years ago, he moved to Pakistan, where he had extensive contacts with Al Qaeda, the official said. In recent years, he had moved to Syria and joined the Islamic State’s fighting ranks.

Mr. Uzbeki was close to Mr. Baghdadi, the Islamic State’s leader, and helped plot a deadly attack on a nightclub in Istanbul on New Year’s Day. He was targeted for his role in the Islamic State’s plotting of attacks around the world, said Col. John J. Thomas, a spokesman for the United States Central Command. “He facilitated the movement of ISIS foreign terror fighters and funds,” Colonel Thomas told reporters in April.

After months of waiting for an opportunity to seize Mr. Uzbeki without putting civilians at risk, one arose on April 6 for the so-called expeditionary targeting force, a group of commandos from the secretive Joint Special Operations Command who hunt Islamic State leaders in Iraq and Syria.
About 3 p.m., Mr. Uzbeki was driving from Mayadeen, a city in southeastern Syria that has become an enclave for Islamic State leaders fleeing Raqqa. (The Central Command said this past week that it had killed Turki al-Bin’ali, a senior recruiter and propagandist, in an airstrike on May 31 in Mayadeen.)

“As Mosul and Raqqa come under increasing pressure, we’ve seen ISIS elements moving into the Euphrates River Valley over the past few months,” said Cmdr. William Marks, a spokesman for the Defense Intelligence Agency.

Mr. Uzbeki had just dropped off a higher-ranking Islamic State leader in Mayadeen and was returning to Raqqa when the commandos ambushed him. Though he died, the soldiers were able to recover cellphones and other materials, a military official said.

In a similar raid in early January, American commandos killed another midlevel Islamic State leader they had been trying to capture and interrogate in the eastern Syrian province of Deir al-Zour, which is largely under Islamic State control. The insurgent, whom the military did not identify, was also killed when he resisted capture. Important information was also collected from this raid, military officials said.

The model for these kinds of operations in Syria emerged in May 2015 when two dozen Delta Force commandos entered Syria aboard Black Hawk helicopters and V-22 Ospreys from Iraq and killed Abu Sayyaf, whom American officials described as the Islamic State’s “emir of oil and gas.”

The information harvested from the laptops, cellphones and other materials recovered in the raid yielded the first important insights about the Islamic State’s leadership structure, financial operations and security measures.

Equally important, Abu Sayyaf’s wife, Umm, who was captured in the operation, provided information to investigators for weeks, American officials said, before she was turned over to the Iraqi authorities.

So successful was that raid that seven months later, Ashton B. Carter, then the defense secretary, disclosed at a House hearing that he was creating a “specialized expeditionary targeting force.”

The commandos — initially numbering about 100 troops, including support personnel — would have a mission similar to, but smaller than, the one they carried out in tandem with President George W. Bush’s surge of American troops in Iraq in 2007. There, commandos conducted a series of high-tempo, nightly raids to capture or kill fighters from Al Qaeda and other former Baathist groups in Iraq.

In recent months, the targeting force has intensified its drone strikes and raids in Syria against the Islamic State’s external operations planners, who have inspired, supported and directed attacks beyond their declared caliphate and into the West. A small number of capture missions are in the works, tracking insurgent leaders, military officials said.

“When the target is indeed captured alive, then we often can get even more valuable information through interrogations, immediate and continuing over time,” said William Wechsler, a former top counterterrorism official at the Pentagon. “All of this helps us better understand the enemy network, prioritize new targets, and identify external terrorist plots.”
6  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Serious Read: Qatar on: June 27, 2017, 05:30:10 PM
Terror-Tied Qatari Think Tank's Anti-Israel, Pro-BDS Stance
IPT News
June 26, 2017
7  Politics, Religion, Science, Culture and Humanities / Politics & Religion / CNN on: June 27, 2017, 11:37:24 AM
8  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Coordination between Iran and North Korea? on: June 27, 2017, 11:14:17 AM
Looks like we have another lurker on the forum grin
9  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Coordination between Iran and North Korea? on: June 27, 2017, 11:13:50 AM
Looks like we have another lurker on the forum grin
10  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Coordination between Iran and North Korea? on: June 27, 2017, 11:13:04 AM
Looks like we have another lurker on the forum  cheesy
11  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Politics of Health Care on: June 27, 2017, 11:08:22 AM
Among the howls and yowls over the Senate bill about cutting Medicare blah blah I discovered some fascinating factoids.

*Actual Medicare spending will go UP 18%.  The purported "cuts" are but baseline cuts.

*As we here already know, it is a serious misnomer to define the decrease in enrollee numbers as a matter of people being kicked out of coverage.  In point of fact many/most are returning to what they did before Obamacare compelled them to join.  Furthermore, because the CBO must use the data fed to it (GIGO=Garbage In Garbage Out) apparently it is required to assume 7 million more enrollees than are actually there?!? (Don't have citation for this).  Anyway, in this vein, here is this:

No doubt there is much more malarkey of this sort out there , , ,
12  Politics, Religion, Science, Culture and Humanities / Politics & Religion / The Atlantic: What is wrong with the Democrats? on: June 27, 2017, 11:00:55 AM
13  Politics, Religion, Science, Culture and Humanities / Politics & Religion / No Ramadan dinner for President Trump on: June 27, 2017, 01:46:56 AM
14  Politics, Religion, Science, Culture and Humanities / Politics & Religion / US Laser Guns on: June 27, 2017, 01:38:43 AM
15  Politics, Religion, Science, Culture and Humanities / Politics & Religion / CNN Producer "CNN Russia narrative is bullsh*t" on: June 27, 2017, 01:30:38 AM
16  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, deficit, and budget process on: June 27, 2017, 01:23:18 AM
Sell it off in pieces to neighboring states.
17  DBMA Martial Arts Forum / Martial Arts Topics / What if your car is surrounded? on: June 26, 2017, 05:08:28 PM
18  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The United Nations/ US Sovereignty/International Law on: June 26, 2017, 04:49:34 PM
Oy vey!  shocked rolleyes rolleyes rolleyes rolleyes rolleyes rolleyes rolleyes rolleyes
19  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, deficit, and budget process on: June 26, 2017, 04:48:25 PM
Different legal questions presented when the borrower is not one of the fifty states of the USA.
20  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Economics on: June 26, 2017, 04:46:58 PM
Coming soon!  Government repeals Law of Gravity!
21  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Men & Women on: June 26, 2017, 02:01:37 PM
You are awesome!
22  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Waterless toilets in Madagascar on: June 26, 2017, 01:59:25 PM
23  Politics, Religion, Science, Culture and Humanities / Politics & Religion / US military aid up, humanitarian aid down on: June 26, 2017, 01:47:22 PM
24  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Virgin Islands et al bankrupt on: June 26, 2017, 01:44:34 PM

So, if bankruptcy is an option-- what is the problem?  Or are we supposed to bail out stupid lenders?
25  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Breaking news! Law of Supply & Demand still in effect! on: June 26, 2017, 01:11:26 PM
26  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Baker vs. Gay Wedding Case to be heard on: June 26, 2017, 12:57:06 PM
27  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Sex leads to man's DNA becoming part of the woman?!? on: June 26, 2017, 12:52:44 PM

Looking for confirmation here , , ,
28  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Trump travel moratoirum partial victory at SCOTUS on: June 26, 2017, 12:28:41 PM
This is a victory for the Administration.  The Court should have gone further (see the dissenting folks), but it’s good.
29  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Philippines on: June 26, 2017, 12:26:39 PM
Muslims are concentrated in certain islands in the south.  The Southern Philippines have a long history of Muslim resistance to Spanish resistance, American colonization, and Manila dominance.  Sometimes this gets up in the central Philippines e.g. Negros.
30  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Hate group designation lifted on: June 26, 2017, 12:24:18 PM
31  Politics, Religion, Science, Culture and Humanities / Politics & Religion / The relevance of competing natural gas routes to Europe on: June 26, 2017, 08:59:00 AM
Previously I have dialed in on the relevance of competing natural gas routes from Central Asia to Europe.  It appears the theme repeats itself.
32  Politics, Religion, Science, Culture and Humanities / Politics & Religion / POTH: Tillerson (and Kushner) on: June 26, 2017, 08:54:01 AM
33  Politics, Religion, Science, Culture and Humanities / Politics & Religion / M. Mukasey: Trump, Mueller, and Athur Anderson on: June 26, 2017, 08:30:45 AM
Not quite sure I follow the relevance of the point about Arthur Anderson, but several legal points of interest raised herein:

Trump, Mueller and Arthur Andersen
Did the president act ‘corruptly’? Not from what we know—but then neither did the accounting firm.
Then-FBI Director Robert Mueller testifies before the Senate in 2013.
Then-FBI Director Robert Mueller testifies before the Senate in 2013. Photo: AFP/Getty Images
By Michael B. Mukasey
Mr. Mukasey served as U.S. attorney general (2007-09) and a U.S. district judge (1988-2006)
June 25, 2017 5:05 p.m. ET

What exactly is Special Counsel Robert Mueller investigating? The basis in law—regulation, actually—for Mr. Mueller’s appointment is a finding by the deputy attorney general that “criminal investigation of a person or matter is warranted.”

According to some reports, the possible crime is obstruction of justice. The relevant criminal statute provides that “whoever corruptly . . . influences, obstructs or impedes or endeavors [to do so], the due and proper administration of the law under which any pending proceeding is being had,” is guilty of a crime. The key word is “corruptly.”

President Trump’s critics describe two of his actions as constituting possible obstruction. One is an alleged request to then-FBI Director James Comey that he go easy on former national security adviser Michael Flynn, who was under investigation for his dealings with Russia and possible false statements to investigators about them. According to Mr. Comey, Mr. Trump told him, “I hope you can see your way clear to letting this go, to letting Flynn go,” because “he is a good guy.”

An obstruction charge based on that act would face two hurdles. One is that the decision whether to charge Mr. Flynn was not Mr. Comey’s. As FBI director, his job was to supervise the investigation. It is up to prosecutors to decide whether charges were justified. The president’s confusion over the limits of Mr. Comey’s authority may be understandable. Mr. Comey’s overstepping of his authority last year, when he announced that no charges were warranted against Hillary Clinton, might have misled Mr. Trump about the actual scope of Mr. Comey’s authority. Nonetheless, the president’s confusion could not have conferred authority on Mr. Comey.

The other is the statutory requirement that a president have acted “corruptly.” In Arthur Andersen LLP v. U.S. (2005), the U.S. Supreme Court accepted the following definition: that the act be done “knowingly and dishonestly, with the specific intent to subvert or undermine the integrity” of a proceeding. Taking a prospective defendant’s character into account when deciding whether to charge him—as Mr. Comey says Mr. Trump asked him to do—is a routine exercise of prosecutorial discretion. It is hard to imagine that a properly instructed jury could decide that a single such request constituted acting “corruptly”—particularly when, according to Mr. Comey, Mr. Trump also told him to pursue evidence of criminality against any of the president’s “ ‘satellite’ associates.”

The second act said to carry the seed of obstruction is the firing of Mr. Comey as FBI director. The president certainly had the authority; it is his motive that his critics question. A memorandum to the president, from the deputy attorney general and endorsed by the attorney general, presented sufficient grounds for the firing: Mr. Comey’s usurpation of the prosecutor’s role in the Clinton matter and his improper public disclosure of information unfavorable to Mrs. Clinton. But the president’s detractors have raised questions about the timing—about 3½ months into the president’s term. They have also cited the president’s statement to Russian diplomats days afterward that the firing had eased the pressure on him.

The timing itself does not suggest a motive to obstruct. Rather, coming a few days after Mr. Comey refused to confirm publicly what he had told Mr. Trump three times—that the president himself was not the subject of a criminal investigation—the timing suggests no more than an understandable anger. The statement to Russian diplomats, which might have been intended to put the Russians at ease, collides with the simple fact that an investigation—conducted by agents in the field—proceeds regardless of whether the director continues in office, and thus hardly suggests the president acted “corruptly.”

One of Mr. Mueller’s early hires among the dozen-plus lawyers already aboard has a troubling history with the word “corruptly.” Andrew Weissmann led the Enron prosecution team that pressed an aggressive interpretation of “corruptly,” which permitted a conviction even absent the kind of guilty knowledge the law normally associates with criminal charges. As a result, the accounting firm Arthur Andersen was convicted. By the time the conviction was reversed on appeal to the Supreme Court in 2005—in large part due to the erroneous application of “corruptly” in the statute at issue—Arthur Andersen had already ceased operation.

What if—for some reason not apparent to the public now—Mr. Mueller were to conclude that the president did act “corruptly”? Could he initiate a criminal prosecution? The Office of Legal Counsel at the Justice Department, which sets policy for the department and other agencies of government, has already opined more than once—starting in 1973, during Watergate—that the answer is no. It would offend the Constitution for the executive branch to prosecute its head.

What else might Mr. Mueller do? Some have suggested that if he finds criminal activity occurred he could report his findings to the House so as to trigger an impeachment proceeding, as Independent Counsel Kenneth Starr did in 1998. But the law under which Mr. Starr was appointed has lapsed, and the regulations governing the special counsel provide for only two kinds of reports—either to Justice Department leadership when some urgent event occurs during the investigation, or to the attorney general to explain the decision to prosecute or not. Reports of either type are to be treated as confidential.

Mr. Mueller could simply take the bit in his teeth and write a public report on his own authority, or write a confidential report and leak it to the press. If he did either, he would be following Mr. Comey’s lawless example.

Or if, as appears from what we know now, there is no crime here, Mr. Mueller, notwithstanding his more than a dozen lawyers and unlimited budget, could live up to his advance billing for integrity and propriety and resist the urge to grab a headline—not necessarily his own urge but that of some he has hired.

Hold fast. It may be a rough ride.

Mr. Mukasey served as U.S. attorney general (2007-09) and a U.S. district judge (1988-2006).
34  Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ: Missile Defense Imperative on: June 26, 2017, 08:25:40 AM
35  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Mark Steyn: Deep State Dinner Theater on: June 26, 2017, 08:23:27 AM

36  Politics, Religion, Science, Culture and Humanities / Politics & Religion / WaPo: Keeping an eye on Kushner's potential conflicts/corruption on: June 26, 2017, 08:11:07 AM
37  Politics, Religion, Science, Culture and Humanities / Politics & Religion / LA Times: Marawi Victims on: June 26, 2017, 07:18:43 AM
38  Politics, Religion, Science, Culture and Humanities / Politics & Religion / A moment of social lucidity on: June 26, 2017, 07:07:14 AM
39  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Tax Policy on: June 26, 2017, 06:59:40 AM
Here ya go:


The $1.5 Trillion Business Tax Change Flying Under the Radar
GOP proposal to scrap interest deduction would have profound impact on debt-reliant businesses
Losing the deduction could mean higher tax bills for crop growers who depend on bridge loans to work through seasonal business fluctuations.
Losing the deduction could mean higher tax bills for crop growers who depend on bridge loans to work through seasonal business fluctuations. Photo: Michael Zamora/Associated Press
By Richard Rubin
Updated June 25, 2017 8:18 p.m. ET

Republicans looking to rewrite the U.S. tax code are taking aim at one of the foundations of modern finance—the deduction that companies get for interest they pay on debt.

That deduction affects everyone from titans of Wall Street who load up on junk bonds to pay for multibillion-dollar corporate takeovers to wheat farmers in the Midwest looking to make ends meet before harvest. Yet a House Republican proposal to eliminate the deduction has gotten relatively little sustained public attention or lobbying pressure.

Thanks in part to the deduction, the U.S. financial system is heavily oriented toward debt, which because of the tax code is often cheaper than equity financing—such as sales of stock. It also is widely accessible. In 2015, U.S. businesses paid in all $1.3 trillion in gross interest, according to Commerce Department data, equal in magnitude to the total economic output of Australia.

Getting rid of the deduction for net interest expense, as House Republicans propose, would alter finance. It also would generate about $1.5 trillion in revenue for the government over a decade, according to the Tax Foundation, a conservative-leaning think thank.

The plan would raise money to help offset Republicans’ corporate tax cuts and reduce a “huge bias” toward debt financing, said Robert Pozen, a senior lecturer at MIT’s Sloan School of Management. That bias, he said, hurts companies built around innovation, which tend to not have the physical assets that banks usually require as collateral.

“What we’re proposing is to take the tax preference from the source of funds—borrowing—and take that preference to the use of funds—business investment and buildings, equipment, software, technology,” Rep. Kevin Brady (R., Texas), the author of the plan, said at The Wall Street Journal CFO network conference this month.

In a world with no interest deduction, debt-fueled leveraged buyouts by private-equity titans could become more expensive to finance and junk bonds less appealing. “That’s not necessarily bad for society,” said David Beim, a retired Columbia University finance professor. “We have too much systemic financial risk in our economy.”

The dollar size of repealing the net-interest-expense deduction is even larger than another controversial proposal being pushed by House Republicans known as border adjustment, which would tax imports and exempt exports. The border adjustment plan has been under attack from retailers and Republican senators, whose resistance has put it on the brink of failure. But the idea of eliminating or limiting the interest deduction has generated less vocal opposition, giving it a real chance of passage, perhaps in a scaled-back form.

Republicans are aiming to agree on a framework for tax policy by September and send a bill to President Donald Trump this year. It will be an uphill fight fraught with intraparty political divides, and companies who want to keep the interest deduction will have plenty of clout.

For some debt-reliant businesses, the interest deduction’s demise could be a blow. Crop growers who depend on bridge loans to work through seasonal business fluctuations could face higher tax bills.

Andy Hill, who farms corn and soybeans on about 600 acres in north-central Iowa, said he pays less than $10,000 a year in interest on a line of credit between $100,000 and $200,000. That loan helps him bridge gaps between his expenses and his income, between when he needs to buy seed and fertilizer and when he sells his crops.

“[Losing the ability to deduct interest] wouldn’t put me in the red by any stretch of the imagination, but it makes it very debilitating as far as household income,” said Mr. Hill, who added that he has reached out to both of his senators and his House member about the issue.

Midsize businesses may also get squeezed.

“The people that utilize debt, they utilize it because they don’t have the cash and they don’t have the access to equity,” said Robert Moskovitz, chief financial officer of Leaf Commercial Capital, which finances businesses’ purchases of items like copiers and telephone systems. “A dry cleaner in Des Moines, Iowa? Where is he going to get equity? He can’t do an IPO.”

The idea behind the Republican plan is to pair the elimination of this deduction with immediate deductions for investments in equipment and other long-lived assets. Party leaders expect the capital write-offs would encourage more investment and growth and greater worker productivity, but not the debt often associated with it.

From an accounting standpoint, the tradeoff could hurt companies’ reported earnings because immediate expensing would just shift the timing of deductions and the loss of the interest deduction would be a permanent change.

Dennis Kelleher, chief financial officer of CF Industries Holdings Inc., a fertilizer manufacturer, said at a conference in May that the most important thing for the company would be a lower corporate tax rate.

“I don’t think that’s a good thing,” he said of repealing the interest deduction. “I suspect that won’t happen because it would be rather destabilizing, just to the capital markets generally.”

Unlike border adjustment, the idea of accelerating investment write-offs has broad support from conservative groups, such as the National Taxpayers Union, and some support from Democrats, including Jason Furman, who was President Barack Obama’s chief economist. It was a move in the opposite direction, toward longer depreciation schedules, that helped doom a Republican tax plan in 2014.

The tax code treats equity financing more harshly than debt. While interest is deductible, dividend payments typically aren’t. Corporate profits can thus be subject to two layers of tax—once at the business level and then when they go to shareholders in the form of dividends.

 That means the effective marginal tax rate on equity-financed corporate investments is 34.5%, according to a report released by the Treasury Department this year in the waning days of the Obama administration. The corresponding rate for debt-financed investment is negative 5%. That subsidy for corporate debt “potentially creates a large tax-induced distortion in business decision making,” the report says.

But borrowing and deducting interest are deeply ingrained in American corporate finance as a normal cost of doing business. Dislodging the traditional practice will be challenging. Some firms might look to borrow offshore instead to reap tax benefits elsewhere.

“I don’t even think people think about it much,” said MIT’s Mr. Pozen. “It’s clear that they’re going to finance it by debt if they have a big acquisition or a big project.”

Because so much is at stake for so many sectors, writing the law could get messy. Mr. Brady said small businesses and utilities could get exceptions or specialized rules, as could debt-financed purchases of land, which wouldn’t be eligible for immediate investment write-offs.

The administration, including a president who has proclaimed himself the “king of debt,” has been wary of repealing the interest deduction but hasn’t drawn a hard line, according to multiple statements. Treasury secretary Steven Mnuchin has said his preference is to keep it. Resistance could build among Republicans in Congress and among real-estate firms and the agriculture industry, which have formed a coalition to fight the proposal. Yet financial markets so far have registered little reaction to the prospect of the interest deduction going away. One reason: The tax change most likely would apply to new loans only.

Junk-rated bonds, issued by companies that typically carry a large amount of debt, have returned 4.6% this year—better than the 4.3% returns of investment-grade bonds, according to Bloomberg Barclays data.

Without repealing the interest deduction, Republicans’ hopes of providing full and immediate deductions for capital investment are dim. They probably wouldn’t have enough money to offset the upfront fiscal cost of accelerating those deductions.

The plus for the GOP is that this issue is more familiar and less black-and-white than the complex border adjustment plan. Limits on interest and accelerated write-offs could be dialed to a politically comfortable spot. If Republicans can’t stomach full repeal of the interest deduction and immediate write-offs, they could try something short of that with, say, half of capital expenses being deductible and half of interest being deductible.

Andrea Auerbach, head of global private investment research at Cambridge Associates, which advises institutions that invest in private equity, said the industry would survive a tax overhaul that removes the interest deduction.

“The effects will reverberate for sure,” especially among larger firms that rely more on debt, she said. “But debt is still going to be cheaper than equity, so I don’t think it’s going away.”

—Sam Goldfarb contributed to this article.

Write to Richard Rubin at

Appeared in the June 26, 2017, print edition as 'A $1.5 Trillion Tax Change Flies Under the Radar.'
40  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Mark Steyn interview: America Alone on: June 26, 2017, 06:58:23 AM
41  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Indian PM Modi on: June 26, 2017, 06:54:48 AM

By Narendra Modi
June 25, 2017 5:04 p.m. ET

Last June in my address to a joint session of the U.S. Congress, I stated that the relationship between India and America had overcome the “hesitations of history.” A year later, I return to the U.S. confident in the growing convergence between our two nations.

This confidence stems from the strength of our shared values and the stability of our systems. Our people and institutions have steadfastly viewed democratic change as an instrument for renewal and resurgence.

In an uncertain global economic landscape, our two nations stand as mutually reinforcing engines of growth and innovation. Confidence in each other’s political values and a strong belief in each other’s prosperity has enabled our engagement to grow. A vision of joint success and progress guides our partnership.


Our bilateral trade, which already totals about $115 billion a year, is poised for a multifold increase. Indian companies are adding value to the manufacturing and services sectors in the U.S., with total investments of approximately $15 billion and a presence in more than 35 states, including in the Rust Belt. American companies have likewise fueled their global growth by investing more than $20 billion in India.

The transformation of India presents abundant commercial and investment opportunities for American businesses. The rollout of the Goods and Services Tax on July 1 will, in a single stroke, convert India into a unified, continent-sized market of 1.3 billion people. The planned 100 smart cities, the massive modernization of ports, airports, and road and rail networks, and the construction of affordable housing for all by 2022—the 75th anniversary of India’s independence—are not just promises of great urban renewal within India. These plans also showcase the enormous fruits of our relationships with enterprising U.S. partners—worth many billions of dollars over the next decade alone—together with concomitant new employment opportunities across both societies.

India’s rapidly expanding aviation needs, and our increasing demand for gas, nuclear, clean coal and renewables, are two significant areas of increasing convergence. In coming years, Indian companies will import energy in excess of $40 billion from the U.S., and more than 200 American-made aircraft will join the private Indian aviation fleet.

The combination of technology, innovation and skilled workers has helped forge an exciting digital and scientific partnership between our two countries. The creative and entrepreneurial energy of our engineers, scientists and researchers, and their free movement between both countries, continue to help India and the U.S. retain their innovation edge and maintain competitiveness in the knowledge economy.

A new layer in our engagement is our partnership for global good. Whenever India and the U.S. work together, the world reaps the benefits—be it our collaborative efforts to find affordable vaccines for rotavirus or dengue, our joint studies of gravitational waves, observations of distant planets, establishing norms for cyberspace, providing humanitarian assistance and disaster relief in the Indo-Pacific region, or training peacekeepers in Africa.

Defense is another mutually beneficial sphere of our partnership. Both India and the U.S. have an overriding interest in securing our societies, and the world, from the forces of terrorism, radical ideologies and nontraditional security threats. India has four decades’ experience in fighting terrorism, and we share the U.S. administration’s determination to defeat this scourge.

We are already working together to address the existing and emerging strategic and security challenges that affect both our nations—in Afghanistan, West Asia, the large maritime space of the Indo-Pacific, the new and unanticipated threats in cyberspace. We also share an interest in ensuring that sea lanes—critical lifelines of trade and energy—remain secure and open to all.

The logic of our strategic relationship is incontrovertible. It is further underpinned by faith in the strength of our multicultural societies that have defended our values at all costs, including the supreme sacrifices we’ve made in distant corners of the globe. The three-million-strong Indian-American community, which represents the best of both our countries, has played a crucial role in connecting and contributing to our societies.

The past two decades have been a productive journey of engagement for our mutual security and growth. I expect the next few decades to be an even more remarkable story of ambitious horizons, convergent action and shared growth.

The U.S. and India are forging a deeper and stronger partnership that extends far beyond the Beltway and the Raisina Hill. That partnership has become our privileged prerogative and our promise for our people and our world.

Mr. Modi is prime minister of India.
42  Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ: Scrapping the interest tax deduction? on: June 26, 2017, 06:44:07 AM
43  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: North and South Korea on: June 25, 2017, 10:13:25 PM
I had a fascinating conversation today with a fascinating man.

His prediction was that the Norks would be solved by China in return for our conceding the South China Sea.
44  Politics, Religion, Science, Culture and Humanities / Politics & Religion / A British Sikh speaks on: June 25, 2017, 09:43:54 PM
45  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Ex CIA officer released after two years for leaking; another one gets 3.5 years on: June 25, 2017, 09:36:24 PM
From 2015
46  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Trump's accomplisments and promises kept on: June 25, 2017, 08:37:16 PM
6) VA reform law, enabling the incompetent to get fired

C'mon gents, there's plenty more, please help me list them.  All of us should have a handy dandy list for forum/FB battles elsewhere.  This thread is for that.
47  Politics, Religion, Science, Culture and Humanities / Politics & Religion / At what point does this become Treason? on: June 25, 2017, 08:35:16 PM
48  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: India/Indian Ocean (and India-afpakia and India-China) on: June 25, 2017, 08:29:52 PM
I noticed that too. My guess is that both sides are feeling out a substantial upgrade in relationship.
49  DBMA Espanol / Espanol Discussion / SIC Kali Gathering on: June 25, 2017, 05:15:42 PM
50  DBMA Espanol / Espanol Discussion / SIC Kali Gathering on: June 25, 2017, 05:15:09 PM
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