WASHINGTON: The US Senate narrowly passed a 2018 federal budget Thursday, clearing the way for President Donald Trump’s controversial tax overhaul that includes $1.5 trillion in tax cuts.
The Republican measure, which passed along party lines, is a largely symbolic gesture. But importantly, it includes special instructions that allows Trump’s party to pass historic tax reforms with a simple majority vote.
“With this budget, we’re on a path to delivering much needed relief to American individuals and families who have borne the burdens of an unfair tax code for entirely too long,” Senate Majority Leader Mitch McConnell said immediately following the 51-49 vote.
Trump hailed the vote as “an important step in advancing the administration’s pro-growth and pro-jobs legislative agenda,” saying it “creates a pathway to unleash the potential of the American economy through tax reform and tax cuts.”
Nine months into his presidency, Trump’s tax gambit is the last chance to salvage key planks of his 2017 legislative agenda.
After failing to repeal former president Barack Obama’s health care law, adoption of tax cuts before year’s end has become the top priority for Republicans who control Congress.
Trump took office in January arguing that tax reform will further boost the economy and benefit ordinary Americans.
“Frankly, I think we have the votes for the tax cuts which will follow fairly shortly,” Trump said at the White House.
“We’re really doing well, but we can do something very, very spectacular if we’re given the tax cuts.”
The politically explosive reforms are being addressed in several steps, beginning with Thursday’s vote on a resolution to establish the 2018 budget framework.
The measure contains language that allows the Senate to use a process known as “reconciliation” to fast-track the tax overhaul by requiring only a simple majority in the 100-member Senate, instead of the 60 generally required to move major legislation.
With Senate Republicans holding 52 seats, that would mean they no longer need Democratic support, unless there are more than two Republican defections.
The basis of the reforms, outlined last month, is a drop in the corporate tax rate from 35 to 20 percent, a reduction in income tax for the majority of income groups, and the elimination of loopholes and deductions to fix a tax code which Trump calls a “relic.”
The top one percent of earners will see their after-tax incomes rise 8.5 percent in 2018, while the 95 percent lower down the scale will see a gain of 0.5-1.2 percent, according to the Tax Policy Center, a Brookings Institution-Urban Institute joint venture.
The center says the reforms will cost $2.4 trillion in lost federal revenues during their first decade, which raises questions about how they will be financed.
Republican supporters of the changes say the tax cuts will more than cover the huge shortfall by spurring economic growth, which would lead to future tax revenues.
Democrats have strongly denounced the tax cuts as a $1.5 trillion giveaway to the rich, and said the budget framework would dramatically slash funds for education, transportation and infrastructure, while cutting deep into federal health programs for the elderly, the poor and the disabled.
“This nasty and backwards budget green lights cuts to Medicare and Medicaid in order to give a tax break to big corporations and the wealthiest Americans,” warned Senate Minority Leader Chuck Schumer.
Senator Bernie Sanders blasted the budget resolution as “horrific” and “extremely cruel.”
Fiscal conservatives worry a tax cut will add to the national debt, but Trump has called for Republican unity after some in the party balked at supporting a bill that would dismantle much of Obamacare.
Treasury Secretary Steven Mnuchin said failure on tax reform could spark a crash in US stock markets which have repeatedly hit records in recent weeks.
US Senate passes budget, in first step toward tax overhaul
US Senate passes budget, in first step toward tax overhaul
Divided G20 fails to agree on climate, Ukraine
- In a statement, the G20 called for “comprehensive” ceasefires in both Gaza and Lebanon
- On Sunday, Biden, who is attempting to ringfence support for Ukraine before Trump’s return to power, gave Kyiv the green light to use long-range US missiles to strike deep inside Russian territory
RIO DE JANEIRO: G20 leaders failed on Monday to break a deadlock in UN climate talks at a summit in Rio that was dominated by divergences over the war in Ukraine and Donald Trump’s impending return to the White House.
Ahead of the meeting, the UN had implored the leaders of the world’s richest economies to rescue stalled climate talks in Azerbaijan by boosting funding for developing countries struggling with global warming.
G20 members, who are divided on who should pay, did not make such commitments, saying only that the trillions of dollars needed would come “from all sources.”
“The leaders are kicking the can back to Baku,” said Mick Sheldrick, co-founder of the advocacy group Global Citizen, referring to the capital of Azerbaijan where the UN climate talks are taking place.
“This is probably going to make it harder to achieve an agreement,” he told AFP.
The risk of an escalation in the war in Ukraine and the prospect of a return of US President-elect Trump’s isolationist “America First” policies also dominated the talks in Brazil.
US President Joe Biden is attending the summit, but as a lame duck eclipsed by China’s Xi Jinping, who has cast himself as a protector of the international order in the new Trump era.
Xi, who held back-to-back meetings with other leaders, warned the world faced a new period of “turbulence” and said there should be “no escalation of wars, and no fanning of flames.”
In a statement, the G20 called for “comprehensive” ceasefires in both Gaza and Lebanon.
The summit was riven with divisions over Ukraine, however.
On Sunday, Biden, who is attempting to ringfence support for Ukraine before Trump’s return to power, gave Kyiv the green light to use long-range US missiles to strike deep inside Russian territory.
Biden’s move — a major policy shift by the US — threatens to escalate a war Trump has vowed to quickly end.
Russia on Monday warned of an “appropriate response” if its territory was hit.
German Chancellor Olaf Scholz said he would not follow Biden’s lead with his country’s Taurus missiles, but French President Emmanuel Macron praised a “good” move by Biden.
Brazilian President Luiz Inacio Lula da Silva attempted to put issues close to his heart, such as fighting hunger and climate change, at the top of the agenda.
At the opening of the summit, he launched the centerpiece of his G20 presidency: a Global Alliance against Poverty and Hunger backed by 82 countries that aims to feed half a billion people by 2030.
He won further praise from campaigners by garnering support for a bid to make billionaires pay more tax.
The summit statement included a pledge to “engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed,” and to devise mechanisms to prevent them dodging tax authorities.
“Brazil has lit a path toward a more just and resilient world, challenging others to meet them at this critical juncture,” anti-poverty group Oxfam said in a statement.
But Lula’s progressive social agenda met some resistance from Argentina’s libertarian president Javier Milei, an ardent fan of Trump and his billionaire adviser Elon Musk.
Milei said he opposed points in the summit declaration, including increasing state intervention to combat hunger and regulating social media but saved Brazil’s blushes by nonetheless signing up to the joint statement.
The meeting comes in a year marked by another grim litany of extreme weather events, including Brazil’s worst wildfire season in over a decade, and the opening of a new front in Israel’s wars with its Arab neighbors.
“Today the world is on a knife edge,” EU Council President Charles Michel warned.
The get-together caps a diplomatic farewell tour by Biden that took him to Lima for a meeting of Asia-Pacific trading partners, and then to the Amazon in the first such visit for a sitting US president.
Conspicuously absent from the summit was Russian President Vladimir Putin, whose arrest is sought by the International Criminal Court over the Ukraine war.
Hong Kong to sentence dozens of democracy campaigners
- The sentencing is “a very important indicator to show the general public (the degree of) openness and inclusivity in our society,” Lee Yue-shun, one of those acquitted, told AFP on Tuesday as he waited outside court
HONG KONG: Hong Kong’s largest national security trial will draw to a close on Tuesday, with dozens of the city’s most prominent democracy campaigners set to be sentenced for subversion, a charge that can carry up to life imprisonment.
Beijing imposed a sweeping national security law on the financial hub in 2020, snuffing out months of massive, sometimes violent, pro-democracy protests.
Western countries and international rights groups have condemned the trial as evidence of Hong Kong’s increased authoritarianism.
The “Hong Kong 47” were arrested in 2021 after holding an unofficial election primary that aimed to improve pro-democracy parties’ chances of winning a majority in the city’s legislature.
Two of the 47 were acquitted in May, but on Tuesday, the rest will learn their sentences, many after more than 1,300 days in jail.
The sentencing is “a very important indicator to show the general public (the degree of) openness and inclusivity in our society,” Lee Yue-shun, one of those acquitted, told AFP on Tuesday as he waited outside court.
A friend of defendant Gordon Ng, named by prosecutors as one of five organizers, told AFP she had been suffering insomnia in the past few days.
“Gordon seemed nervous too,” the woman said about her visit to Ng in prison. “But... he kept telling us not to overthink.”
This case is the largest by number of defendants since the law was passed in mid-2020.
Another major national security trial will see a key development on Wednesday, when jailed pro-democracy media tycoon Jimmy Lai testifies in his collusion trial.
The charges against Lai revolve around publications in his now-shuttered tabloid Apple Daily, which supported the pro-democracy protests and criticized Beijing’s leadership.
China and Hong Kong say the security law restored order following the 2019 protests, and have warned against “interference” from other countries.
At dawn on Tuesday, more than 200 people stood in the chilly drizzle outside the court where the sentencing will take place.
Some had been queuing since Saturday to nab a public seat.
Eric, an IT professional based in mainland China, spent a day of holiday waiting in line.
“I want to bear witness of how Hong Kong becomes mainland China,” Eric told AFP.
“In the future, cases like this may not be open to the public anymore.”
Jack, a law student, said he wanted to witness the sentencing because he found the judgment “was not particularly convincing.”
He said he was pessimistic that the sentencing would be lenient, but that even if it was, “people’s passion for political participation has dissipated in the face of restrictions.”
The aim of the election primary, which took place in July 2020, was to pick a cross-party shortlist of pro-democracy candidates to increase their electoral prospects.
If a majority was achieved, the plan was to force the government to meet the 2019 protesters’ demands — including universal suffrage — by threatening to indiscriminately veto the budget.
Three senior judges handpicked by the government to try security cases said the group would have caused a “constitutional crisis.”
The “principal offenders” face 10 years to life in jail.
Legal scholar Benny Tai has been named “the brain behind the project” by prosecutors.
Others singled out as “more radical” are the ex-leaders of the now-disbanded Civic Party Alvin Yeung and Jeremy Tam, young activist Owen Chow and former journalist Gwyneth Ho.
The oldest defendant is “Long Hair” Leung Kwok-hung, the 68-year-old co-founder of the city’s last standing opposition party the League of Social Democrats.
His wife Chan Po-ying, the leader of the LSD, told AFP that Leung “does not have any special thoughts on the sentence” after visiting him on Monday.
“I feel rather calm too... I wish for no surprise and no shock,” Chan said.
Emilia Wong, girlfriend of rally organizer Ventus Lau, said Lau appeared more anxious in recent months.
They hadn’t discussed the potential sentence much because “it’s an unprecedented case,” she said.
“A long time ago, he said if the sentence is up to 10 years or 20 years, I should not wait for his release,” Wong told AFP.
“The (sentencing) day may be a significant milestone for the outside world but for me... I will just have to carry on with my normal life, visiting him and handling his matters.”
Starmer stays quiet on Ukraine’s use of UK Storm Shadow missiles
- Britain, which has provided Ukraine with Storm Shadow long-range missiles, has consistently pushed to ease restrictions on Kyiv’s use of the weapons
RIO DE JANEIRO: British Prime Minister Keir Starmer on Monday said he would not “get into operational details” after US President Joe Biden gave Ukraine permission to use Western-supplied long-range missiles against Russia.
Speaking to broadcasters at the G20 in Brazil, Starmer refused to be drawn “because the only winner, if we were to do that, is (Russian President Vladimir) Putin.”
Kyiv has long sought authorization from Washington to use the powerful Army Tactical Missile System, or ATACMS, to hit military installations inside Russia as its troops face growing pressure.
A US official said Washington’s major policy shift on the missiles was in response to Russia’s deployment of thousands of North Korean troops in its war effort.
Britain, which has provided Ukraine with Storm Shadow long-range missiles, has consistently pushed to ease restrictions on Kyiv’s use of the weapons.
Putin had previously warned that letting Ukraine use long-range weapons would mean NATO was “at war” with Moscow.
In parliament in London, lawmaker Roger Gale asked if Britain planned to “align with the United States” in granting Kyiv permission to use the UK-supplied missiles “as it sees fit in its own defense.”
Junior defense minister Maria Eagle said the government intended to “align with our allies” on how Ukraine “can make use of the capabilities that’s been offered” by its backers.
Starmer added: “I’ve been really clear for a long time now we need to double down.
“We need to make sure Ukraine has what is necessary for as long as necessary, because we cannot allow Putin to win this war,” he said.
Asked if he had spoken to Russian Foreign Minister Sergei Lavrov at the G20, he said: “I haven’t spoken to Russia and I’ve got no plans to do so.”
Foreign Secretary David Lammy, speaking to reporters after a UN Security Council meeting in New York, also refused to discuss the use of British missiles, because it “risks operational security.”
Asked how concerned he was about the implications of Donald Trump’s presidency on the war in Ukraine, he said: “One president at a time.”
“We’re dealing with President (Joe) Biden and we are committed to putting Ukraine in the strongest possible position,” he added.
Biden in ‘historic’ pledge for poor nations ahead of Trump return
- The outgoing leader unveiled the money for the International Development Association as he attends the G20 summit underway in Rio de Janeiro, his last time at the gathering of world leaders
RIO DE JANEIRO: US President Joe Biden announced a “historic” $4 billion pledge for a World Bank fund that helps the world’s poorest countries, the White House said Monday, before Donald Trump takes office with a new cost-cutting agenda.
The outgoing leader unveiled the money for the International Development Association as he attends the G20 summit underway in Rio de Janeiro, his last time at the gathering of world leaders.
“The president announced today that the United States intends to pledge $4 billion over three years... which is really exciting,” a senior US administration official told reporters on condition of anonymity.
The official said the pledge would not be binding on Trump’s incoming administration but said previous Republican governments had also backed top-ups for the fund.
US Deputy National Security Adviser Jon Finer earlier called the pledge “historic” and said Biden would “rally other leaders to step up their contributions.”
The International Development Association is the concessional lending arm of the World Bank and is used for some of the poorest countries in the globe, including for projects focused on climate.
During a six-day tour of South America, Biden has been trying to shore up his international legacy ahead of President-elect Trump’s return to the White House on January 20.
On Sunday he visited the Amazon rainforest in Brazil to promote his record on climate change, saying that the United States had hit its target of increasing bilateral climate financing to $11 billion a year.
Billionaire Trump has pledged to take a wrecking ball to many of Biden’s policies and has appointed tech tycoon Elon Musk as head of a commission to target what he calls federal government waste.
North Korean leader Kim meets Russian resources minister
- A delegation of the Russian army’s Military Academy of the General Staff arrived in Pyongyang on Monday, state media reported, while a Pyongyang city council committee delegation also left for Russia
SEOUL: North Korean leader Kim Jong Un met with Russia’s natural resources minister Alexander Kozlov on Monday, state media KCNA reported, in the latest sign of growing ties between Pyongyang and Moscow.
During the meeting, Kim said cooperation in trade, science and technology should expand for the two countries’ development and prosperity, according to the report published on Tuesday.
“It is necessary to mutually and powerfully propel the co-prosperity and development of the two countries by further promoting the inter-governmental trade, economic, scientific and technological exchange and cooperation in a more extensive and diversified way,” Kim was quoted was saying in the report.
A delegation of the Russian army’s Military Academy of the General Staff arrived in Pyongyang on Monday, state media reported, while a Pyongyang city council committee delegation also left for Russia.
The exchange between Pyongyang and Moscow came as South Korean President Yoon Suk Yeol, at the G20 summit in Rio de Janeiro, urged the two countries to end their military cooperation which he called illegal.
A separate column carried by KCNA on Tuesday criticized the trilateral cooperation between South Korea, the US and Japan including a summit held last week on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in Lima, Peru.
It said such cooperation including military drills created discord and confrontation.
