The Senate Judiciary Committee approved the Gang of Eight’s immigration bill on Tuesday. It will go to the Senate floor after the Memorial Day recess. Heritage has pointed out the problems with this “comprehensive” approach — including the staggering costs of amnesty and a failure to secure the border.

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Read the Morning Bell and more en español every day at Heritage Libertad.

Quick Hits:

• Two “terrorists wielding a machete and a cleaver hacked a soldier to death on a busy London street Wednesday while yelling ‘Allahu Akbar,’” reports Fox News.
• President Obama will give a national security speech today addressing drones and Guantanamo Bay.
• Lois Lerner, head of the IRS division that approves tax-exempt status for groups, is facing scrutiny that reaches into her past.
• The IRS scandal raises serious questions about the Internet sales tax.
• Heritage’s Derrick Morgan responds today to criticism of Heritage’s study on the cost of amnesty.
• Former Secretary of Defense Donald Rumsfeld will speak at Heritage today about his new book, Rumsfeld’s Rules. Watch live at noon ET.

The post Morning Bell: Immigration Reform in One Infographic appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Adopting the chained CPI (Consumer Price Index) in Social Security to more accurately account for changes in the cost of living is a small first step toward fixing a broken program that is currently accelerating its own demise by paying excess benefits.

Fifty-seven million Americans receive Social Security benefits, and many live on these benefits alone. It is imperative that Congress reform the system well before automatic benefit cuts decimate the benefits of retirees in need. One reason the system is in trouble is that the Social Security Administration is paying cost-of-living adjustments (COLAs) based on an outdated and inaccurate index that overstates changes in the cost of living.

COLAs based on the chained CPI would still increase benefits to keep pace with inflation over the next decade: by $197 for someone who retires after a lifetime earning the minimum wage, by $248 for average wage earner retirees, and by $533 for maximum taxable wage earner retirees. But without reform, Social Security will pay out excess benefits. As Heritage’s Romina Boccia and Rachel Greszler write in a new Heritage report:

Compared to a more accurate inflation adjustment, current benefit payments will result in an additional $43 per month by 2023 for a minimum wage worker retiring in 2013, an additional $54 per month for the average retired worker, and an extra $117 per month for a maximum wage earner retiring in 2013. These benefits are in excess of what is needed to maintain beneficiaries’ purchasing power after inflation.

Most of the excess benefits from the current, inaccurate COLA index go to the highest earning recipients, while those who earned the minimum wage benefit the least from overstating inflation. Using the chained CPI would correct this excess while more accurately protecting beneficiaries from changes in the cost of living.

Lower-income retirees would suffer the most from Social Security’s across-the-board benefit cuts if Congress fails to reform the program’s finances. Excess payments under today’s inaccurate COLA only accelerate this deadline. As Boccia explained:

Using an incorrect inflation measure is a poor strategy to assist these populations. Instead, a minimum flat benefit level that ensures that no senior falls into poverty in retirement, as proposed in the Heritage plan Saving the American Dream, would be much more effective at assisting seniors in need.

By eliminating costly excess payments while keeping benefits on pace with inflation, the chained CPI could solve a fifth of Social Security’s funding shortfall and save the program close to $130 billion over the next decade. Lawmakers should view this policy as a wise first step toward broader social security reform.

The post Social Security Benefits and Cost of Living: Protecting Against Inflation appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

American taxpayers cannot afford the cost of amnesty.

The cost of illegal immigration and amnesty could amount to $6.3 trillion, which would fall on American taxpayers over the long term, according to a Heritage Foundation analysis. As Heritage showed, the majority of illegal immigrants receiving amnesty would receive far more in taxpayer-funded benefits than they would pay in taxes. Even critics of the Heritage study admit amnesty will cost trillions of dollars. Whether it is $4 trillion, $6 trillion or more, the additional costs to the U.S. taxpayer are still too high.

Here are a few factors that could drive the cost even higher.

1) The number of illegal immigrants may be higher.

Heritage’s analysis is based on the Department of Homeland Security’s estimate that there are 11.5 million illegal immigrants currently in the United States. “The DHS estimates that there are some 10.4 million unlawful immigrants recorded in Census surveys and 1.1 million more who are not reported by the Census,” explains Heritage expert Robert Rector. The first number is based on evidence, but the second is a guess, meaning there may be far more. If the number of illegal immigrants is actually 20 percent greater than the 11.5 million assumed in the Heritage analysis, the long-term fiscal cost of amnesty would increase proportionately, adding perhaps $1.2 trillion to the lifetime fiscal deficit.

2) Medical and welfare inflation in future years is likely to increase future costs.

The Heritage analysis is based on the very conservative assumption “that means-tested welfare and medical benefits per household will grow no faster than general inflation for the next 50 years.” However, Rector explains, “the historical record suggests that this is highly unlikely. For nearly every year for the past half-century, welfare spending per capita has increased much faster than inflation.” It is a similar story for medical care. “The main analysis in this paper assumes that the cost of medical services per beneficiary will grow no faster than inflation for the next 50 years,” says Rector. “This is likely an underestimate and probably results in an understatement of future spending.”

3) Because the analysis measured costs mainly by household, it likely excluded about 20 percent of illegal immigrants.

The Heritage analysis estimated the pre-retirement costs for households headed by illegal immigrants (excluding legal adult residents who might live in those households). But Rector explains that “about 20 percent of unlawful immigrants do not reside in those households. Any pre-retirement fiscal costs associated with that 20 percent are therefore omitted from the analysis; this is likely to lead to an underestimate of total costs.”

4) Amnesty may act as a “magnet” for future illegal immigrants.

The United States passed amnesty in 1986 under the promise that no future amnesty would be granted. “Despite this promise, the 1986 amnesty was probably a factor in encouraging the subsequent surge in unlawful immigration, since it signaled that the U.S. might take a lenient stance toward unlawful immigrants in the future. If the U.S now enacts a second amnesty, it will have established a very strong precedent for serial amnesties,” says Rector.

Obviously, $6.3 trillion is a major cost to American taxpayers, particularly considering the United States’ current debt of $17 trillion. American taxpayers should be fully aware of the financial burden amnesty would impose.

As Heritage Foundation President Jim DeMint also noted: “Any immigration reform should improve the lives, the incomes, and the opportunities” of those lawfully in the United States. Burdening taxpayers is not fair to everyone who lives in the U.S. legally.

The post Cost of Illegal Immigration and Amnesty Could Be Higher appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Newscom

In a refreshing break from tradition, the House Appropriations Committee approved a $967 billion discretionary spending plan that would stay within the fiscal year 2014 sequestration spending levels.

The measure would protect defense from further cuts and instead deliver the total savings through reductions to domestic discretionary programs. It was in keeping with the instructions provided in the House budget, which was passed earlier this year.

Now it is up to chairman Harold Rogers (R–KY) to deliver the 12 spending bills that must be passed into law by September 30, the end of the federal fiscal year. These bills authorize annual spending for everything from national defense to foreign aid.

Regrettably, Rogers seemed less than enthusiastic about the necessary spending cuts, reportedly saying the committee’s hands were tied. “It is my sincere hope that there will soon be a budget compromise that will undo the damaging sequestration law and give us a single, common top-line allocation with the Senate.”

It’s always easier to spend money than to cut. No doubt Senate Appropriations chairwoman Barbara Mikulski (D–MD), who is planning to ignore sequestration, will have the easier job. The Senate’s total appropriations funding, at $1.058 trillion for 2014, is $91 billion above the House level. Mikulski closes some of the deficit gap by hiking taxes. So the Senate once again gets to coast; meanwhile, Rogers will have his work cut out for him.

But this is precisely what Congress should do—stick with the Budget Control Act (BCA) agreement to cut spending. It promised these spending cuts in exchange for the $2.1 trillion increase in the debt limit. And after all, the BCA is partially responsible for today’s temporary improvement in spending and the deficit, so moving away from it is totally unacceptable.

What is crucial, however, is that Congress comes to an agreement on how to reprogram the sequestration cuts, which fall disproportionately on defense. As Heritage defense expert Baker Spring explains:

Public perception may be that the sequestration cuts to the defense budget is about eliminating waste and inefficiency in the Department of Defense (DOD). In reality, sequestration will result in the loss of military capabilities.

The House committee’s spending plan would adhere to the sequestration level top line for discretionary spending while protecting defense from further cuts. This is an important achievement, as military furloughs planned for later this summer are not enough to protect against further deterioration of military readiness. As defense analyst Brian Slattery explains:

Sequestration has gone into effect, but its effects are still largely unknown. However, the Armed Forces’ service chiefs have begun to describe what is in store under such dramatic reductions. For example, Army Chief of Staff Raymond Odierno explained that reductions to maintenance and training will put the Army “on the outer edge of acceptable risk for our future force and our ability to meet our National Security Strategy.”

The House should lead the Senate by sticking to the standard that it set in its budget and the Appropriations committee reaffirmed:

• Adhere to the spending reductions in the Budget Control Act, including sequestration;
• Lessen the damage to national defense, the federal government’s core constitutional function; and
• Do not raise taxes.

The post House Appropriations Plan Delivers Sequestration Cuts and Protects Defense appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Have a question about the debt ceiling, Benghazi, or the IRS? Get the inside scoop from the champions of conservatism in the House of Representatives.

This month’s meeting of Conversations with Conservatives will take place Wednesday at 11:30 a.m. It will be streamed live online. Viewers may  participate in the conversation on Twitter (tweet to @conversations using #CWC113). You can also leave a question in the comments below.

Conversations with Conservatives is a group of free market and liberty-minded members of Congress that meets monthly with traditional press and bloggers to discuss the most important issues of the day.

Led by Representatives Tim Huelskamp (KS-01), Raúl Labrador (ID-01), and Jim Jordan (OH-04), each meeting features different conservative members of Congress to share their ideas and field questions from the media.

In addition to Huelskamp, Labrador, and Jordan, participating members for today’s session include: Representatives Justin Amash (MI-03), Jim Bridenstine (OK-01), Ron DeSantis (FL-06), Thomas Massie (KY-04), Todd Rokita (IN-04), and Steve Scalise (LA-01). Additional participants may be announced.

The post Conversations with Conservatives on IRS, Debt Limit, Immigration (VIDEO) appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Members of Congress called Apple executives to testify on Capitol Hill yesterday. Why? Because the company makes money overseas, and some Senators want to get their hands on the cash.

A Senate subcommittee accused the company of “shifting” profits from the U.S. to other countries and avoiding paying taxes.

But Apple pays its U.S. taxes. Heritage tax expert Curtis Dubay said the earnings aren’t “shifted,” because “it’s not income that’s earned here in the U.S.”

“I can’t go down to the Apple store here in Washington, buy an iPad, and have Apple then ‘shift’ that income abroad,” Dubay said.

The Senators were up in arms about Apple keeping income in Ireland. The issue was the company’s foreign income earned from all those iPhones and iPods that people around the world are buying.

The reason the Senate feigned indignation over an issue that had nothing to do with the U.S. is that some Members want Apple to pay more U.S. tax on all that foreign cash. They want Apple to bring all of that profit back into the U.S. and pay the U.S. corporate tax rate—the world’s highest—on it. But as long as we keep the U.S. rate the highest in the world, Apple and other multinational businesses are going to keep their foreign income abroad.

Senator Rand Paul (R-KY) said it was offensive that Senator Carl Levin (D-MI) called in the leaders of a company that is trying to do right by its shareholders. He said:

Instead of Apple executives, we should have brought in here today a giant mirror, okay? So we could look at the reflection of Congress, because this problem is solely and completely created by the awful tax code. If you want to assign blame, the committee needs to look in this mirror and see who created the mess.

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Apple—and any other company that does business outside the U.S.—isn’t doing anything illegal to minimize its tax liability. In fact, America’s high corporate tax rate drives companies to do more business overseas.

Not only that, but “we’re the only country that effectively taxes our businesses on income they earn around the world,” Heritage’s Dubay said. “They’re keeping that income abroad because we add that extra layer of tax.”

What to do? Other developed countries have been cutting their corporate tax rates for 20 years. That’s what Congress needs to be looking into, as well as moving away from our “worldwide system” of taxing foreign income—not putting on business-bashing hearings for show. Fortunately, House Ways and Means Committee Chairman Dave Camp (R-MI) has been doing that necessary and difficult work.

As Senator Paul wrote in an op-ed for Rare:

If you want more money to be earned in the United States—make profit welcome here. Until that time arrives, count me out of any government dog and pony shows that badger business.

Read the Morning Bell and more en español every day at Heritage Libertad.

Quick Hits:

• “A top IRS official in the division that reviews nonprofit groups will invoke the 5th Amendment and refuse to answer questions before a House committee,” reports the LA Times.
• A Senate committee approved the Gang of Eight immigration bill last night. It will go to the Senate floor after Memorial Day.
• We haven’t forgotten about Benghazi. Watch our powerful video and help us spread the word.
• Anthony Weiner, the former congressman who stepped out of public life after his lewd messages to young women were exposed, is now running for mayor of New York City.
• Have a question about the debt ceiling, Benghazi, or the IRS? Get the inside scoop today at 11:30 a.m. ET from the champions of conservatism in the U.S. House.

The post Morning Bell: What Did Apple Do Wrong? appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Newscom

A backroom deal made during the writing of Obamacare will harm seniors and the poor, according to The Wall Street Journal (WSJ).

During their closed-room dealings with the Obama Administration, the hospital industry’s lobbyists agreed to support Obamacare—provided that the law placed restrictions on physician-owned “specialty” hospitals, noted WSJ. These innovative specialty hospitals frequently have quality outcomes better than most traditional facilities, but no matter—the big hospital lobbyists wanted to eliminate a source of competition. So Obamacare prohibits new physician-owned hospitals from receiving Medicare payments — and prohibits most existing facilities from expanding if they wish to keep treating Medicare patients.

WSJ highlighted the actions specialty hospitals have been forced to take in response to these Obamacare restrictions:

Forest Park Medical Center in Dallas has stopped accepting Medicare patients, allowing it to escape the law’s restrictions entirely…. Rejecting Medicare ‘was a big leap, but we felt like the law gave us no choice,’ said J. Robert Wyatt, a Forest Park founder….

Other doctor-owned facilities are asking the federal government to let them duck the law’s restrictions altogether. Doctors Hospital at Renaissance near McAllen, Texas, is trying to get a waiver allowing it to expand as more than 53% of its payments come through the Medicaid federal-state insurance program for the poor.

In other words, because hospital lobbyists cut a backroom deal to support Obamacare, seniors and low-income patients have fewer health care options. Think that these examples of Americans losing access to care would prompt the hospital-industrial complex to reconsider its backroom deal? Not a chance:

Any effort to undo the expansion limits faces an uphill battle with Democrats, because the restrictions were a deal-breaker for hospitals when the White House sought their support for the law in 2009, industry lobbyists say.

Obamacare’s backroom deals (the “Louisiana Purchase,” the “Gator Aid,” and the “Cornhusker Kickback”) represented the worst in politics—well-heeled lobbyists seeking to obtain government largesse through pork-barrel spending and regulatory loopholes. The Wall Street Journal story reminds us how those backroom deals have real-world consequences when it comes to medical access—another example of how Obamacare has harmed patient care.

The post Big Hospitals’ Obamacare Deal Betrays Seniors and the Poor appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

A letter from a small group of four pro-Internet-tax advocacy groups sent to Members of Congress yesterday claims that The Heritage Foundation is wrong on the policy and the facts regarding the issue of Internet sales taxes. Their assertion falls short.

There are several fatal problems with the bill, which would allow states to force out-of-state businesses to collect sales taxes for them. The misnamed Marketplace Fairness Act (MFA) would be bad for consumers and bad for America.

Right now, under the long-standing “physical presence standard,” states can force only businesses that have a store, plant, or warehouse within their borders to collect their sales taxes on their behalf. This standard originated in the 1992 Quill Supreme Court case and has worked well since.

This is why, if you buy something online from a business that had no presence in your state, it doesn’t have to collect sales tax from you. The MFA would overturn the physical presence standard and force those out-of-state businesses to collect that tax and remit it to your state.

The authors of yesterday’s letter argue that such state power “asserts federalism” by “returning decision making authority over the collection of state taxes to state legislatures, where it belongs.” This interpretation misses the mark.

State legislatures been not been denied their right to establish their own sales tax laws. Indeed, they have all made decisions as to whether—and to what extent—sales should be taxed. Rather, they’ve been denied the ability to apply those laws to businesses that have no presence within their borders. That states can have their own laws that apply only to people and businesses that choose to reside within the state’s borders is at the very heart of federalism. Strike that away, as MFA does for sales taxes, and federalism becomes a badly weakened principle.

In their letter, the four signers also point to a statement in a joint memo signed by the president of our sister organization Heritage Action—as well as more than 50 other conservative leaders—that the MFA would impose “added costs for retailers and American consumers, directly through the sales taxes imposed, but also through the added burden of collecting the taxes for the 9,600 separate taxing jurisdictions in the U.S., each with its own unique definitions, holidays, and rates.”

The four signers of yesterday’s letter argue that this statement is incorrect, since the MFA requires states to identify a single statewide agency to administer sales tax collections. This provisions limits taxing jurisdictions to “only” 46 authorities. But retailers would still be subject to the tax laws of each of the nearly 10,000 tax jurisdictions, each of which has its own rates and tax base, a Herculean task.

Allowing state tax officials to force online businesses in other states to collect their taxes is simply a bad idea.

The post Pro-Internet-Tax Groups Get the Facts Wrong appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

With the weekend’s grand slam appearance on the Sunday talk shows by yet another official unqualified to talk about Benghazi, the Obama Administration has again shot itself in the foot.

White House Communications Director Dan Pfeiffer attempted to defend U.N. Ambassador Susan Rice’s mischaracterization of the Benghazi terrorist attack, which she blamed on the now infamous anti-Islam video. It was a poor show.

All of this stands in stark contrast with White House’s handling of the Navy SEAL Team Six raid that killed Osama bin Laden on May 2, 2011. We have all seen the images of President Obama and Secretary of State Hillary Clinton huddled in the White House situation room with the national security staff, riveted to live images of the nighttime raid. It was hardly over before President Obama, speaking proudly as commander in chief, went on national television to announce the death of the enemy of the American people. The Administration even cooperated with the producers of the movie Zero Dark Thirty about the mission to kill bin Laden.

But now, “irrelevant” is the word chosen by Dan Pfeiffer over and over to describe some of the most pressing questions regarding the White House’s role in the Benghazi affair. Instantaneously, “irrelevant” became the word of the day on social media.

Where was President Obama the night of the terrorist attack? Unlike the Osama bin Laden raid, the President was disturbingly disconnected from the attack on an American ambassador. After the five o’clock intelligence briefing in which Obama was informed that the U.S. diplomatic facility was under attack and the U.S. ambassador to Libya missing, the President’s whereabouts remain unaccounted for the rest of the evening. The next day, Obama flew to Las Vegas for a fundraiser. “I don’t remember what room the President was in on that night, and that’s a largely irrelevant fact,” Pfeiffer snapped at Fox’s Chris Wallace.

Or who doctored the talking points, served up to the media and the American people by Rice on September 16 with such conviction? That also, according to Pfeiffer, is “irrelevant.”

Contrary to the election-time narrative that “al-Qaeda is on the run,” defeated by the Obama Administration, President Obama and his staff are now pleading ignorance across the board. Pfeiffer’s problematic media appearance could fit into an emerging narrative that the Obama Administration may have been more incompetent, than Machiavellian in its handling of the Benghazi terrorist attack. Administration officials spoke to CBS News on condition of anonymity, proffering the line that bungling, ignorance, and inexperience may have been at the root of the debacle that left four Americans dead in Benghazi.

It is not likely, though, that Members of Congress will be satisfied with being told that their questions are “irrelevant” when hearings to unearth the truth resume this week.

The post White House Spins Obama’s Role in Benghazi: From Competence to Irrelevance (VIDEO) appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

Chris Maddaloni/CQ Roll Call/Newscom

Senator Byron Dorgan (D–ND) told Greenwire (subscription required) that an energy efficiency bill that passed through the Senate Energy and Natural Resources Committee would be a necessary “first step” to more federal efforts to overhaul energy policy.

The legislation, introduced by Senators Jeanne Shaheen (D–NH) and Rob Portman (R–OH), contains a number of subsidies for commercial and residential building upgrades, manufacturing and industrial processes, and worker training programs and would be a giant step in the wrong direction for U.S. energy policy.

The Energy Savings and Industrial Competitiveness Act, more commonly known as Shaheen–Portman, uses taxpayer dollars to skew decisions that families and businesses should make on their own. For instance, the legislation creates:

• A “voluntary” building code standard for commercial and residential buildings in which the Secretary of Energy would be able to dangle carrots by providing federal funding to state governments and tribal communities to meet the building codes.
• More of the government playing the role as investor by allowing the Secretary of Energy to provide grants to the states for retrofit projects for commercial and private buildings. The states would have the discretion to use that grant money to establish a loan guarantee program, a revolving loan fund, and other financing mechanisms and encourages states to “consider establishing such other appropriate policies, incentives, or actions” to further promote efficiency upgrades.
• Subsidized worker training programs to establish building training and assessment centers, to train architects and engineers in energy efficiency, to promote research for alternative energy uses, and other activities.
• Handouts for public-private partnerships that would research and commercialize energy efficient manufacturing technologies and processes. The bill would also offer rebate programs for manufacturers that use more efficient electric motors and transformers.

These programs are a wasteful and inefficient use of taxpayer dollars and ignore the efficacy of how markets promote efficiency gains. Businesses make investments in technological innovations because it saves them money in the long run. Families will install more insulation in their home without a taxpayer incentive to do so.

When the government substantially alters those decisions with other peoples’ money or with mandates, there are opportunity costs for businesses and families, which can take away other energy efficiency investments consumers would make in a world without efficiency mandates and subsidies.

Further, families and businesses already place a high value on saving money. And even when a family isn’t capturing the energy savings it should, that doesn’t mean they’re making an inefficient decision or that government mandates and subsidies will make it better. By taking decisions away from the homeowner or business owner, these programs are making Americans worse off, not better.

Whether or not the subsidized investments that would come from the Shaheen–Portman legislation save money or improve efficiency is irrelevant. The question is whether taxpayer money should be used to support them and the answer is simple: they should not. Companies will make these investments if they believe the technology is promising, worth the risk, and the best use of their investment dollars.

If politicians believe Shaheen–Portman should be a springboard for broader energy policy reform, we’re jumping into a pool of more subsidies and unnecessary government intervention into the energy economy. That’s a pool American taxpayers and consumers don’t want to be swimming in.

The post Energy Efficiency Bill Is a Big Step in the Wrong Direction appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.