EPA Chiefs $50-a-Night Rental Raises White House Angst

  • Pruitt apartment questions follow first-class flight reports
  • Washington lease is compared to an Airbnb-style arrangement

Environmental Protection Agency Administrator Scott Pruitt leased a Washington apartment owned by a lobbyist friend last year under terms that allowed him to pay $50 a night for a single bedroom — but only on the nights when he actually slept there.

White House officials are growing dismayed about the questions surrounding Pruitt’s living arrangement, including his initial inability to produce any documentation about the lease or his actual payments, according to three officials. The landlord provided EPA officials with a copy of the lease and proof of the payments Pruitt made.

In all, Pruitt paid $6,100 to use the room for roughly six months, according to copies of rental checks reviewed by Bloomberg News. Those checks show varying amounts paid on sporadic dates — not a traditional monthly "rent payment" of the same amount each month.

That was because of the unusual rent schedule — not a single monthly amount, but a daily amount charged only for days used for a single bedroom in the two-bedroom unit just blocks from the Capitol. The building is at least partially owned by a health care lobbyist, Vicki Hart, via a limited liability corporation. Her husband J. Steven Hart, is also a lobbyist, whose firm represents clients in industries regulated by the EPA.

One person familiar with the lease compared it to an Airbnb-style arrangement, but Pruitt wasn’t a transient and instead made the apartment his home on nights he was in Washington. The lease — also reviewed by Bloomberg — says that he was charged $50 a night "based on days of actual occupancy."

Six Canceled Checks

Bloomberg reviewed six canceled checks paid by Pruitt totaling $6,100 from March 18 through Sept 1, 2017. He paid $450 on March 18, $900 on April 26, $850 on May 15, $700 on June 4, $1,500 on July 22 and $1,700 on Sept 1.

A sampling of current listings of apartments for rent near Pruitt’s temporary pad showed studio and one-bedroom offerings available for $1,350 to $1,975 a month. Some of the current Airbnb listings for rentals of single bedrooms inside apartments and homes on Capitol Hill ranged from $45 to $68 per night.

Justina Fugh, who has been ethics counsel at the EPA for a dozen years, said the arrangement wasn’t an ethics issue because Pruitt paid rent. An aide said the agency had not reviewed the arrangement in advance.

Pruitt’s Payments

The payments covered Pruitt’s room in the two-bedroom unit, but did not afford him liberal use of common areas, where the owners had dinner parties and other functions, according to a person familiar with the situation. According to the lease agreement, Pruitt’s bedroom could not be locked.

ABC reported Friday that Pruitt’s college-age daughter used another room in the condo while serving as a White House intern. An email to agency representatives seeking comment on the report were not immediately returned.

After ABC News reported the living arrangement on Thursday, EPA aides had to seek documentation from the building’s owners to prove he had paid rent, raising concerns at the White House, said two of the people, who asked not to be named discussing a sensitive matter involving a Cabinet secretary. Pruitt was in Wyoming on Thursday.

Related: Bumped? EPA Chief Signals He Will Be Flying Coach After Backlash

The disclosure follows revelations about Pruitt’s reliance on first-class flights to travel around the globe and a series of pricey trips, including a visit by Pruitt and agency staff to Italy that cost $120,249. EPA officials have defended Pruitt’s use of first-class flights on security grounds, but after a series of reports, he shifted to coach.

J. Steven Hart is the chairman of Williams & Jensen, a firm with a stable of energy industry clients including Oklahoma Gas & Electric Co., which paid the firm $400,000 in 2017, according to data compiled from the Environmental Integrity Project from disclosure forms.

Pruitt, the former attorney general of Oklahoma, has been an enthusiastic crusader against Obama-era regulations meant to combat climate change and limit air pollution. When Pruitt was in Oklahoma, he sued the EPA more than a dozen times.  

Hart’s individual lobbying clients include liquefied natural gas exporter Cheniere Energy Inc.
Pruitt traveled to Morocco to tout U.S. liquefied natural gas last December, though the Department of Energy — not the EPA — plays the major federal role overseeing LNG exports. It is not clear Hart had direct contact with the EPA on behalf of any of his lobbying clients in 2017, according to a Bloomberg News review of disclosures.

Other individual clients of his are the American Automotive Policy Council and Smithfield Foods Inc.

Hart, in a statement to the Associated Press, described Pruitt as a friend from Oklahoma with whom he had scant contact.

“Pruitt signed a market based, short-term lease for a condo owned partially by my wife,” Hart said in a statement. “Pruitt paid all rent owed as agreed to in the lease. My wife does not, and has not ever lobbied the EPA on any matters."

Critics said the unorthodox rental arrangement allowing Pruitt exclusive, reserved use of the room raised questions and could violate a ban on federal government employees accepting gifts valued at more than $20.

“At the very least, it doesn’t look good for the administrator of EPA to have rented an apartment from the wife of an energy industry lobbyist who represents companies regulated by EPA," said Eric Schaeffer, director of the Environmental Integrity Project.

The government watchdog group Public Citizen asked EPA’s inspector general to investigate.

"This appears to be a gift from a lobbyist to the EPA administrator," Craig Holman, government affairs lobbyist for Public Citizen, said in a news release. "Scott Pruitt seems to be renting at well below market value – from a family member of a lobbyist who has business before the EPA."

Messages left with the Inspector General’s office weren’t immediately returned on Friday.

Fugh, the EPA’s ethics counsel, said no gift was involved. It was a routine business arrangement between Pruitt and an individual, not a lobbying firm, she added.

"He paid a fair price for what amounts to just a room,” Fugh said. “So I don’t even think that the fact that the house is owned by a person whose job is to be a lobbyist causes us concern.”

Read more: http://www.bloomberg.com/news/articles/2018-03-30/epa-chief-s-50-a-night-rental-said-to-raise-white-house-angst

Trump Vows to Take On NRA, Boasts of Willingness to Rush Shooter

President Donald Trump said Monday that he’s willing to take on the National Rifle Association though he doubts they will resist his response to the high school massacre that killed 17 people in Florida earlier this month.

Trump, in a freewheeling discussion with governors at the White House that lasted more than an hour, also said he would have run into the school unarmed to try to confront the attacker, contrasting his hypothetical response with sheriff’s deputies who didn’t enter the building during the rampage.

The president’s evolving responses to the mass shooting in Parkland, Florida, have been largely consistent with the outlook of the NRA, particularly an emphasis Trump has put on arming school teachers. The organization has been a strong political ally of the president, spending $31 million in the 2016 election either to support Trump or attack his opponent, Democrat Hillary Clinton.

“Don’t worry about the NRA, they’re on our side,” Trump said during the meeting with state governors, adding that he had lunch over the weekend with NRA Chief Executive Officer Wayne LaPierre and top lobbyist Chris Cox. “But sometimes we’re going to have to be very tough and we’re going to have to fight them.”

Businesses are rushing to cut ties to the NRA. Among the companies that severed deals with the NRA: Avis Budget Group Inc., Best Western International Inc., Chubb Ltd., Delta Air Lines Inc., MetLife Inc., Symantec Corp. and United Continental Holdings Inc. Others are under intense social media pressure to follow.

Trump suggested the country also should make it easier to involuntarily commit people to psychiatric institutions and open more such facilities.

“In the old days you’d put him in a mental institution, a lot of them, and you could nab somebody like this,” Trump said, referring to the accused Florida shooter, Nikolas Cruz. “Hopefully he gets help or whatever, but he’s off the streets.”

QuickTake: The U.S. Gun Debate Explained

“We’re going to have to start talking about mental institutions,” Trump said, complaining that states had closed too many “because of cost.”

Trump reiterated disparaging comments about the armed sheriff’s deputy assigned to the school who didn’t enter the school while the shooting was taking place, saying he “choked” under the pressure of the situation. He also referenced a CNN report that several other armed sheriff’s deputies who were among the first officers to arrive at the school didn’t initially enter.

"I really believe, you don’t know until you’re tested, but I think I’d, I really believe I’d run in even if I didn’t have a weapon,” Trump said.

Monday’s meeting at the White House was a wide-ranging discussion of ideas to address gun violence at schools. Suggestions ranged from a possibly new rating system for violent videos to arming teachers to filling schools with smoke during an attack to make it harder for a shooter to find targets.

Trump has called for changes in the wake of the Feb. 14 shooting at the Parkland high school. He has voiced support for expanding the background check system to include more mental health information, raising the age for the purchase of some guns to 21 from 18, and regulatory action ending the sale of “bump stocks.”

White House Press Secretary Sarah Sanders injected a bit of uncertainty on the president’s backing for raising age limits, saying the president is “supportive of the concept” but the idea is “still being discussed” and the president’s position will depend on the final form of legislation.

Trump has signaled support for a bipartisan bill from Democratic Senator Chris Murphy of Connecticut and Republican Senator John Cornyn of Texas, known as Fix-NICS. It would penalize federal agencies that fail to report relevant criminal records that would bar someone from purchasing a firearm under current law to the National Instant Criminal Background Check System.

Trump told the governors the administration is “going to strengthen” the measure.

Concealed Weapons

The background checks legislation stalled in a Senate committee, but elements of it passed in the House, paired with a requirement opposed by gun-control advocates that every state recognize licenses to carry a concealed handgun issued by other states. NRA spokeswoman Jennifer Baker said the concealed carry law is the group’s top priority but the NRA would support the background check bill even without the added provision.

The House is waiting for the Senate to act, according to a senior Republican aide. Senate leaders haven’t indicated plans for considering the legislation.

Trump has been most vocal about a controversial proposal to allow some “talented” teachers to carry concealed firearms in schools. He has indicated that state governments might take the lead. Trump says “hardening” the schools would make them less attractive targets for a potential assailant.

“Armed Educators (and trusted people who work within a school) love our students and will protect them,” Trump posted on Twitter last week. “Very smart people. Must be firearms adept & have annual training. Should get yearly bonus. Shootings will not happen again – a big & very inexpensive deterrent. Up to States.”

‘Less Tweeting’

Trump on Monday reiterated his call for states to move forward without federal action.

“States can do most of this and we’ll back you up,” Trump said. “We’ll help you no matter what your solution is,” adding “my attitude is get it done and get it done properly.”

The White House is also considering the idea of using restraining orders to take firearms away from people considered dangerous as part of its response to the Parkland shooting, two people familiar with the matter said.

Jay Inslee, the Democratic governor of Washington, endorsed such an approach, saying his state has had success with so-called extreme risk protection orders. Inslee, though, pushed back on Trump’s idea of arming people at schools. “Educators should educate,” he said, adding that law enforcement and teachers do not support such a move.

“Let’s just take that off the table and move forward,” Inslee said. “I would suggest we need a little less tweeting here and a little more listening.”

Florida Governor Rick Scott unveiled a proposal last week to raise the age requirement for purchasing semiautomatic rifles to 21, and allow some guns to be temporarily confiscated from people deemed mentally unstable by a judge.

Scott has said he’s opposed to arming teachers, but supports increasing the number of law enforcement officials in schools. State legislators in Florida are considering proposals to allow for some school officials to be trained to carry concealed weapons. At the White House meeting on Monday, Scott also noted that students will be able to get more mental health counseling and he aims to have threat assessments in schools.

The Parkland massacre has “created momentum to make sure that something happens this time,” Scott said.

Michael R. Bloomberg, founder of Bloomberg LP, which operates Bloomberg News, serves as a member of Everytown for Gun Safety’s advisory board and is a donor to the group. Everytown for Gun Safety advocates for universal background checks and other gun control measures.

    Read more: http://www.bloomberg.com/news/articles/2018-02-26/trump-says-ready-to-take-on-nra-in-response-to-florida-shooting

    Trump Suggests Bonuses for Gun-Trained Teachers, Praises the NRA

    President Donald Trump called for paying bonuses to teachers who carry guns in the classroom, embracing a controversial proposal to curb school shootings hours after offering a full-throated endorsement of the National Rifle Association.

    Trump told state and local officials gathered at the White House on Thursday to discuss school safety that “you can’t hire enough security guards” and teachers could carry concealed weapons and “nobody would know who they are.” He said that teachers would go through “rigorous training” and could get “a little bit of a bonus.”

    His support for arming educators comes a week after the massacre of 17 people at a high school in Florida. The president and lawmakers are now struggling to respond to public demands for action, mindful of the clout gun-rights enthusiasts hold in the Republican Party, which controls the White House and both chambers of Congress.

    Guns in America

    The NRA, which has been one of the most powerful political opponents to gun control, received lavish praise from Trump just minutes before its chief executive officer, Wayne LaPierre, took the stage at the Conservative Political Action Conference. LaPierre proceeded to blast school officials, local law enforcement and the FBI for failing to prevent school shootings.

    It was a jarring contrast for Trump just a day after his emotional meeting with students and parents affected by recent school massacres. Earlier Thursday morning, before a tweet praising the NRA, Trump went the furthest he’s ever gone on gun control, saying he’d push for tougher background checks that screen for mental health, raising the minimum age of buyers to 21, and ending the sale of bump stocks.

    Trump also suggested to local officials at the White House meeting that schools concentrate more on hardening facilities to withstand rifle fire. But he opposed mandating active shooting drills — which have become increasingly common — saying that rehearsing for a possibly violent event could upset students.

    “Active shooter drills is a very negative thing, have to be honest with you,” Trump said, “I’d much rather have a hardened school.” He added that he wouldn’t want his son to be told he was going through an active shooter drill. “I think it’s very bad for children.”

    White House spokesman Raj Shah later said that Trump only opposes using the term “active shooter drill” because it could be frightening, and suggested schools instead use the term “safety drill.”

    Children’s exposure to violence on the Internet and in video games and movies also may be contributing to the shootings, Trump added. “Their minds are being formed, and we have to do something about maybe what they’re seeing and how they’re seeing it,” he said.

    LaPierre called for more armed security at schools and criticized the notion of making schools “gun-free zones,” which he said are targets for potential shooters, echoing comments Trump has made.

    The NRA chief lashed out at Democrats including Senator Chris Murphy of Connecticut, who has long pushed for tighter gun laws, for “politicizing” the Florida shooting. He said “elites” want to “eradicate all individual freedoms.”

    “They want to sweep right under the carpet the failure of school security, the failure of family, the failure of America’s mental health system, and even the unbelievable failure of the FBI,” LaPierre said.

    The NRA is one of the biggest spenders in elections, ranking 9th among all outside groups, according to the Center for Responsive Politics. In 2016, the NRA’s political arms spent $54.4 million influencing elections, Federal Election Commission records show, including $19.8 million attacking Democratic nominee Hillary Clinton and $11.4 million promoting Trump. The NRA also spent $500,000 or more on 7 Senate races, including in battleground states Florida, Ohio and Wisconsin.

    Trump was endorsed by the NRA and has routinely touted his support for the organization, and his campaign said he opposed expanding the background check system or imposing new restrictions on gun and magazine bans. Trump is expected to speak at the CPAC event on Friday.

    Trump conferred with the NRA’s chief lobbyist, Chris Cox, over the weekend in the aftermath of the Florida shooting, Shah said.

    Gun stocks rose Thursday after declining the two prior days. Shares in American Outdoor Brands Corp. rose 2.8 percent to $10.34 and Sturm Ruger & Co. was up 5 percent to $49.55 at 1:30 p.m. New York time.

    Background Checks

    While Trump said he would push “comprehensive background checks” with an emphasis on mental health, an Obama-era gun rule aimed at preventing people with serious mental illness from buying guns was one of the first targets of Republicans in Congress last year. Lawmakers used a special procedure under the Congressional Review Act to do away with the rule.

    Trump announced Tuesday he would propose regulations to ban “bump stocks” used to allow semi-automatic rifles to fire like automatic weapons. He signaled support for bipartisan legislation to improve data collection for the federal gun-sale background check system.

    Trump said he called many lawmakers Wednesday evening to discuss background checks and that many prior opponents of toughening them have changed their minds.

    But the president isn’t ready to back any specific legislation yet, Shah said. Instead Trump “is proposing ideas, he’s listening right now,” Shah said.

    Click here for more on the debate over guns in America.

    His support for arming teachers would eliminate the gun-free zones in and around schools enshrined in a nearly three-decade-old federal law.

    Trump said in a tweet earlier Thursday that 20 percent of teachers “would now be able to immediately fire back if a savage sicko came to a school with bad intentions. Highly trained teachers would also serve as a deterrent to the cowards that do this.”

    The idea prompted sharp rebukes from some Democrats and misgivings from at least one prominent Republican.

    Murphy said on CNN that the proposal was “a recipe for disaster,” adding that there was no evidence that it would prevent shootings.

    Senator Marco Rubio, a Florida Republican, told a CNN town hall meeting on Wednesday that he opposed arming teachers.

    Trump on Thursday tried to explain his rationale for arming school staff members. “History shows that a school shooting lasts, on average, 3 minutes,” Trump tweeted. “It takes police & first responders approximately 5 to 8 minutes to get to site of crime. Highly trained, gun adept, teachers/coaches would solve the problem instantly, before police arrive. GREAT DETERRENT!”

    “If a potential ‘sicko shooter’ knows that a school has a large number of very weapons talented teachers (and others) who will be instantly shooting, the sicko will NEVER attack that school. Cowards won’t go there…problem solved. Must be offensive, defense alone won’t work!” Trump wrote.

    Trump has signaled support for a bipartisan Senate bill that would strengthen current laws requiring federal agencies to report information to the National Instant Criminal Background Check System. The House passed a similar bill in December, but added legislation that would require states to recognize concealed carry licenses from other states. House conservatives would likely balk at separating the two issues, while the House version of the bill would likely fail in the Senate.

    A Quinnipiac poll released Tuesday found 97 percent support for universal background checks, while 67 percent backed a ban on the sale of assault weapons.

    Michael R. Bloomberg, founder of Bloomberg LP, which operates Bloomberg News, serves as a member of Everytown for Gun Safety’s advisory board and is a donor to the group. Everytown for Gun Safety advocates for universal background checks and other gun control measures.

      Read more: http://www.bloomberg.com/news/articles/2018-02-21/trump-hears-stories-from-shooting-victims-in-remarkable-meeting

      Trump Proposes to Cut Medicare and Spend Big on Wall, Defense

      President Donald Trump will propose cutting entitlement programs by $1.7 trillion, including Medicare, in a fiscal 2019 budget that seeks billions of dollars to build a border wall, improve veterans’ health care and combat opioid abuse and that is likely to be all but ignored by Congress.

      The entitlement cuts over a decade are included in a White House summary of the budget obtained by Bloomberg News. The document says that the budget will propose cutting spending on Medicare, the health program for the elderly and disabled, by $237 billion but doesn’t specify other mandatory programs that would face reductions, a category that also includes Social Security, Medicaid, food stamps, welfare and agricultural subsidies.

      The Medicare cut wouldn’t affect the program’s coverage or benefits, according to the document. The budget will also call for annual 2 percent cuts to non-defense domestic spending beginning “after 2019.’

      At a time when the prospect of rising annual budget shortfalls has spooked financial markets, the White House said in a statement — without explanation — that its plan would cut the federal deficit by $3 trillion over 10 years and reduce debt as a percentage of gross domestic product. Yet, in a break from a longstanding Republican goal, the plan won’t balance the budget in 10 years, according to a person familiar with the proposal.

      The budget, to be released later on Monday, is unlikely to gain traction on Capitol Hill. Lawmakers routinely ignore the spending requests required annually from the executive branch. And Congress passed its own spending bill on Friday, including a two-year budget deal, which the president signed into law.

      According to the summary, Trump will urge an increase in defense spending to $716 billion and a 2.6 percent pay raise for troops. He will request $18 billion to build a wall on the Mexican border, the summary indicates.

      The White House also seeks $200 billion for the infrastructure proposal the administration plans to unveil alongside the fiscal year 2019 budget, as well as new regulatory cuts.

      “This will be a big week for Infrastructure,” Trump said in a Twitter message Monday. “After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country!”

      Monday’s document will outline proposed spending reforms the administration says would, if enacted, cut deficits over the next decade — even as recently passed tax legislation and spending caps threaten to drive future annual deficits above $1 trillion.

      Trump May Struggle on $1 Trillion Pledge to Fix Crumbling U.S.

      “Just like every American family, the budget makes hard choices: fund what we must, cut where we can, and reduce what we borrow,” Office of Management and Budget Director Mick Mulvaney said in a statement. “It’s with respect for the hard work of the American people that we spend their tax dollars efficiently, effectively, and with accountability.”

      A year ago, Trump asked lawmakers to cut $3.6 trillion in federal spending over the next ten years, and identified deep cuts to domestic spending programs. Instead, lawmakers last week passed a two-year government funding deal that would boost military and non-defense spending by $300 billion over the next two years and add more than $80 billion in disaster relief.

      But administration officials argue their proposals, dead on arrival though they may be, is still an important marker of the president’s legislative priorities.

      Immigration Enforcement

      The plan includes a heavy emphasis on immigration enforcement. Trump is requesting $782 million to hire 2,750 new border and immigration officers, and $2.7 billion to detain people in the country illegally. Trump is also asking for $18 billion over the next two fiscal years toward the goal of constructing a wall on the U.S. border with Mexico. That’s a key point of contention in the ongoing legislative battle over the fate of young people, known as “Dreamers,” who were brought to the country illegally as children.

      The proposal also includes $13 billion in new funding to combat the opioid epidemic, which Trump has frequently cited as among his top domestic priorities. The administration would provide a $3 billion boost to the Department of Health and Human Services in the next fiscal year, and $10 billion in 2019.

      The proposal takes “money that the Democrats want to put to these social programs and move it to things like infrastructure, move it to things like opioid relief, move it to things that are in line with the president’s priorities so that if it does get spent, at least it get spent to the right places,” Mulvaney said Sunday during an appearance on Fox News Sunday.

      Boost for Veterans

      Other elements include $85.5 billion in discretionary funding for veterans health services, education, and vocational rehabilitation, the OMB said on Sunday. It is not clear how much of that funding would represent an increase from current spending levels.

      The budget also includes $200 billion in federal funds over the next decade that the White House says would spur $1.5 trillion in infrastructure spending through partnerships with state and local governments and private developers. That includes $21 billion over the next two years that the White House says would “jump start key elements of the infrastructure initiative.”

      Trump will discuss the public works proposal on Monday with governors, mayors, state legislators and other officials, and he expects to meet with Congressional leaders from both parties at the White House on Feb. 14. The president plans to visit Orlando, Florida, on Feb. 16 for an infrastructure event, and he and cabinet members will also promote the plan at events around the U.S., officials said.

      The White House said its initial approach is to offset the $200 billion in the budget for its infrastructure plan with spending cuts elsewhere, including from some transit and transportation programs the administration doesn’t think have been spent effectively. But Trump is open to new sources of funding, a senior White House official told reporters.

      ‘Robust’ Defense

      The White House also didn’t detail how much money it wanted to devote to new spending on the military, but OMB said the proposal would provide “for a robust and rebuilt national defense.” In last year’s budget proposal, Trump called for a $52.3 billion boost for the Defense Department, while asking for deep cuts to the Environmental Protection Agency, State Department, and Department of Health and Human Services.

      Mulvaney said this year’s documents — theoretical though they may be — would see those agencies targeted again for budget cuts.

      “There’s still going to be the president’s priorities as we seek to spend the money consistently with our priorities, not with the priorities that were reflected most by the Democrats in Congress,” he told Fox News.

      Trump on Friday complained on Twitter that in order to boost military spending, “we were forced to increase spending on things we do not like or want.”

      The budget proposal assumes that the U.S. economy will ramp up over the next decade to his goal of 3 percent growth, according to an administration official on Friday who confirmed figures to be contained in Monday’s budget proposal. Economic growth is projected at 3.2 percent in 2019 and 2020.

        Read more: http://www.bloomberg.com/news/articles/2018-02-12/trump-to-urge-wall-opioid-spending-as-congress-sets-own-course

        The GOP Tax Plan Is Entering Its Make-or-Break Week

        The $1.4 trillion item on President Donald Trump’s wish list — a package of tax cuts for businesses and individuals that he has said he wants to sign before year’s end — is headed into the legislative equivalent of a Black Friday scrum next week.

        Senate Republican leaders plan a make-or-break floor vote on their bill as soon as Thursday — a dramatic moment that will come only after a marathon debate that could go all night. Democrats are expected to try to delay or derail the measure, and the GOP must hold together at least 50 votes from its thin, 52-vote majority in order to prevail.

        Their chances improved this week when Republican Senator Lisa Murkowski of Alaska said she’ll support repealing the “individual mandate” imposed by Obamacare — a provision that Senate tax writers are counting on to help finance the tax cuts. Murkowski had earlier signaled some reservations about the provision; and her support was widely viewed as a positive sign for the tax bill’s chances.

        Trump is scheduled to address Senate Republicans at their weekly luncheon Tuesday afternoon on taxes and the legislative agenda for the rest of the year, according to a statement from Senator John Barrasso, chairman of the Senate Republican Policy Committee. 

        The White House previously announced that the president would talk with Republican and Democratic congressional leaders at the White House the same day about an agreement on spending to keep the government open after funding expires on Dec. 8. David Popp, a spokesman for Senate Majority Leader Mitch McConnell, and Drew Hammill, a spokesman for House Democratic leader Nancy Pelosi, both said that meeting is still on the schedule.

        If the tax bill clears the Senate — a step that’s by no means guaranteed — lawmakers in both chambers would have to hammer out a compromise between their differing bills, a process that presents potential pitfalls of its own. For now, though, much of the Senate’s attention will focus on its legislation’s price tag.

        Three GOP senators — Bob Corker of Tennessee, Jeff Flake of Arizona and James Lankford of Oklahoma — have cited concerns about how the measure would affect federal deficits. Independent studies of the legislation have found that — contrary to its backers’ arguments — its tax cuts won’t stimulate enough growth to pay for themselves. Both the Senate bill, and one that cleared the House earlier this month, would reduce federal revenue over a decade by roughly $1.4 trillion, according to the Joint Committee on Taxation.

        On Wednesday, a report from the Penn Wharton Budget Model at the University of Pennsylvania said the bill would reduce federal revenue in each year from 2028 to 2033. That finding would mean it doesn’t comply with a key budget rule that Senate Republican leaders want to use to pass their bill with a simple majority over Democrats’ objections.

        Budget Rule

        In essence, that rule holds that any bill approved via that fast-track process can’t add to the deficit outside a 10-year budget window. The JCT has already found that the Senate bill would generate a surplus in its 10th year because it has set several tax breaks for businesses and individuals to expire.

        But JCT hasn’t yet weighed in publicly on the revenue effects in subsequent years. Senate GOP leaders have expressed confidence that their proposal will satisfy the rule ultimately.

        Another potential stumbling block stems from the fact that Congress is trying to act on complex tax legislation under a tight, self-imposed timeline in order to deliver on promises from Trump, House Speaker Paul Ryan and McConnell.

        For example, Republican Senator Ron Johnson of Wisconsin has said he can’t support the current Senate bill because it would give corporations a tax advantage — a large rate cut to 20 percent from 35 percent — that other, closely held businesses wouldn’t get.

        ‘Change the Most’

        His concern centers on the Senate’s plan for large partnerships, limited liability companies, sole proprietorships and other so-called “pass-through” businesses. Under current law, these businesses simply pass their earnings to their owners, who pay income taxes at their individual rates — currently, as high as 39.6 percent, depending on how much they earn.

        Read more: A QuickTake guide to the tax-cut debate

        The Senate bill would provide pass-through owners with a 17.4 percent deduction for income — but in combination with other provisions, that would result in an effective top tax rate for business income that’s more than 10 percentage points higher than the proposed corporate tax rate.

        The House bill would use an entirely different approach, setting a top tax rate of 25 percent for pass-through business income, but then limiting how much of a business’s earnings could qualify for that rate.

        Reconciling those differences — and addressing Johnson’s concern — may be a complicated process. “That’s part of the equation that could change the most over the next few weeks,” Isaac Boltansky, senior vice president and policy analyst at Compass Point Research and Trading LLC, told Bloomberg Tax. “No one is planning around it yet. There is uncertainty across the board.”

        Meanwhile, the Obamacare issue looms in the background — threatening at least one GOP senator’s vote. Susan Collins of Maine said earlier this week that tax bill “needs work,” and “I think there will be changes.”

        The 2010 Affordable Care Act — popularly known as Obamacare — contained a provision requiring individuals to buy health insurance or pay a federal penalty. Removing that penalty in 2019, as the Senate tax bill proposes to do, would generate an estimated $318 billion in savings by 2027, according to the Congressional Budget Office. The savings would stem from about 13 million Americans dropping their coverage, eliminating the need for federal subsidies to help them afford it.

        Because many of the newly uninsured would be younger, healthier people, insurance premiums would rise 10 percent in most years, the nonpartisan fiscal scorekeeper found.

          Read more: http://www.bloomberg.com/news/articles/2017-11-24/trump-s-1-4-trillion-tax-cut-is-entering-its-make-or-break-week

          Opioid Billionaire’s Indictment Opens New Window on Epidemic

          More than a decade after opioid painkillers first exploded across the U.S., John Kapoor found an aggressive way to sell even more, according to prosecutors: He began bribing doctors to prescribe them.

          Speakers’ fees, dinners, entertainment, cash — federal charges unsealed Thursday claim Kapoor’s striving company, Insys Therapeutics Inc., employed all of that and more to spur prescriptions of a highly addictive fentanyl-based drug intended only for cancer patients.

          As President Donald Trump declared at a White House event that opioid abuse represents a public-health emergency, authorities arrested Kapoor in Arizona and painted a stark portrait of how Insys allegedly worked hand in glove with doctors to expand the market for the powerful agents.

          “Selling a highly addictive opioid-cancer pain drug to patients who did not have cancer makes them no better than street-level drug dealers,” Harold Shaw, the top FBI agent in Boston, said of Kapoor and other Insys executives charged earlier in the case.

          The story of the 74-year-old billionaire and the company he founded traces the arc of a crisis that claims 175 lives each day. What began with the over-prescription of painkillers in the late 1990s soon became a race by manufacturers to dispense more and more pills.

          Overdose Risks

          Charged with racketeering conspiracy and other felonies, Kapoor became the highest-ranking pharma executive to be accused of an opioid-related crime, and his arrest may portend charges against companies far larger than Insys, which has a modest $417 million market capitalization.

          In Connecticut, prosecutors have begun a criminal probe of Purdue Pharmaceutical Inc.’s marketing of OxyContin. Scores of states, cities and counties have sued companies including Purdue, Endo International Plc, and Johnson & Johnson’s Janssen Pharmaceuticals, alleging they triggered the opioid epidemic by minimizing the addiction and overdose risks of painkillers such as Percocet.

          But so far, no recent case has been so sweeping as the one against the executives including Kapoor, who made his initial court appearance late Thursday in Phoenix. A U.S. magistrate judge set bail at $1 million and ordered Kapoor to surrender his passport and submit to electronic monitoring. His lawyer, Brian Kelly, said Kapoor posted bail after the hearing.

          This week, a Rhode Island doctor admitted accepting kickbacks from Insys in exchange for writing prescriptions. Earlier this year, two doctors were sentenced to more than 20 years behind bars for accepting bribes from companies including Insys to sell fentanyl-based medications.

          The Kapoor indictment pinpoints the start of the alleged scheme.

          Oral Spray

          It was early 2012, and Insys’s new oral spray of the opioid fentanyl wasn’t selling well. Because it was so addictive, the pain-relief drug was subject to a tightly controlled distribution system, and regulators demanded to be notified about suspicious orders by manufacturers, wholesalers and pharmacies. And the drug wasn’t cheap, so insurers set up barriers for patients seeking it.

          That was when Kapoor and others at Insys went to extremes to dramatically boost sales of the painkiller, prosecutors said. Doling out speaker fees, marketing payments and food and entertainment perks, they allegedly began bribing doctors to prescribe the drug, and then tricked insurers into paying for it.

          One Insys sales executive told subordinates that it didn’t matter whether doctors were entertaining, according to the indictment: “They do not need to be good speakers, they need to write a lot of” Subsys prescriptions, the official said, referring to the brand name of the painkiller.

          Over a two-year period starting in 2013, Chandler, Arizona-based Insys set aside more than $12.2 million for doctors’ speaking fees, prosecutors said. One doctor received as much as $229,640 in speaker fees for appearing at what amounted to “sham events that were mere social gatherings also attended by friends and office staff,” according to the indictment.

          Friends, Family

          The company encouraged doctors to write more prescriptions by hiring their friends and family members to serve as “business liaisons’’ and “business-relation managers,’’ prosecutors said. These support-staff employees worked in the doctors’ offices but were paid by Insys in what the indictment called bribes and kickbacks.

          Insys even made a video featuring a sales rep dressed as a giant fentanyl spray bottle, rapping and dancing to a song that pushed the idea of getting doctors to prescribe higher doses, prosecutors said.

          Others previously charged include Michael Babich, Insys’s former CEO, Alec Burlakoff, the ex-vice president of sales, and Richard Simon, once the company’s national sales director. They all deny wrongdoing.

          Joe McGrath, an Insys spokesman, declined to comment on Kapoor’s indictment in Boston federal court. The company, which wasn’t charged, has reportedly been in settlement talks with the U.S. Justice Department to resolve a probe into its Subsys marketing. The company’s shares fell more than 22 percent to $5.74 in Nasdaq trading.

          The Lawyer Who Beat Big Tobacco Takes On the Opioid Industry

          The first person in his family to attend college, Kapoor rose from modest means in India to become a wealthy health-care entrepreneur, after earning a doctorate in medicinal chemistry at the University of Buffalo in 1972, according to a work-history the school posted.

          He was a plant manager at Invenex Laboratories in New York and later became chief executive officer of LyphoMed, a hospital-products company. He sold LyphoMed to Fujisawa Pharmaceuticals and formed a venture capital firm that invested in health-care companies.

          In 2010, he merged privately held Insys with NeoPharm Inc. to get access to technology to develop pain drugs for cancer patients. Even though he has stepped down as Insys’s chairman and chief executive officer, he still holds more than 60 percent of its stock.

          Kapoor and Babich are also accused of misleading insurers about patients’ diagnoses and the types of pain they suffered that were covered by the Subsys prescriptions tied to the payment scheme, prosecutors said.

          The company’s agents allegedly told insurers that patients were receiving Subsys for “breakthrough pain’’ to secure coverage. They also misled insurers about what other pain drugs patients had tried before being proscribed Subsys, according to the indictment.

          Some lower-level Insys employees have pleaded guilty and are cooperating with prosecutors, according to court papers. Elizabeth Gurrieri, a former manager who oversaw insurance reimbursements, pleaded guilty to one count of conspiring to commit wire fraud in June.

            Read more: http://www.bloomberg.com/news/articles/2017-10-26/insys-therapeutics-founder-charged-in-opioid-fraud-case

            Key GOP Senator Susan Collins Lays Out Her Demands for Tax Bill

            Republican Senator Susan Collins of Maine said Monday she’s opposed to two tax breaks for the wealthy that her party leaders are pushing for, indicating that her vote won’t be easy to win on President Donald Trump’s top legislative priority.

            “I do not believe that the top rate should be lowered for individuals who are making more than $1 million a year,” Collins said during an interview with Bloomberg News. “I don’t think there’s any need to eliminate the estate tax.”

            Repealing the estate tax and cutting the individual rate from 39.6 percent for top earners “concern me,” she said, adding that she’s conveyed her opposition to party leaders.

            Collins, a moderate Republican who played a decisive role in thwarting several iterations of Obamacare replacement legislation, offered her most pointed comments on her priorities for a tax bill to date.

            She added that the structure of the estate tax — a 40 percent levy applied to estates worth more than $5.49 million for individuals or $10.98 million for couples — means it avoids hitting “the vast majority of family-owned businesses and farms and ranches.” She said she’s open to adjusting the cutoff level slightly upward.

            The White House and GOP leaders released a tax framework last month that calls for a top individual rate of 35 percent and leaves room for tax committees to add another rate above that. It also proposes the repeal of the estate tax. The House Ways and Means Committee is scheduled to release its version of a tax bill on Wednesday. Collins said the Senate will likely offer a tax bill that differs from the House version.

            Collins’s demands are important because Republicans have only 52 seats in the 100-member Senate and little hope of Democratic support — they can’t afford to lose more than two members to get a bill passed. 

            Still, she said: “There is far more outreach on the tax bill” than there was on health care.

            Collins declined to say she’ll oppose a tax bill that adds to the deficit, in contrast to her colleague Senator Bob Corker of Tennessee. But she said she cares about the debt and doesn’t want the tax bill to “blow a hole” in the deficit. She argued that “certain tax cuts done right will increase economic growth” and produce revenue.

            “I hope very much to be able to support a tax reform package," Collins said. "It’s very difficult — I’m not going to say I can guarantee that because I don’t know what’s going to be in it.”

              Read more: http://www.bloomberg.com/news/articles/2017-10-30/key-gop-senator-susan-collins-lays-out-her-demands-for-tax-bill

              The White House and Equifax Agree: Social Security Numbers Should Go

              The Trump administration is exploring ways to replace the use of Social Security numbers as the main method of assuring people’s identities in the wake of consumer credit agency Equifax Inc.’s massive data breach.

              The administration has called on federal departments and agencies to look into the vulnerabilities of employing the identifier tied to retirement benefits, as well as how to replace the existing system, according to Rob Joyce, special assistant to the president and White House cybersecurity coordinator.

              “I feel very strongly that the Social Security number has outlived its usefulness,” Joyce said Tuesday at a cyber conference in Washington organized by the Washington Post. “Every time we use the Social Security number, you put it at risk.”

              Joyce’s comments came as former Equifax CEO Richard Smith testified before the House Energy and Commerce Committee, the first of four hearings this week on Capitol Hill. Lawmakers from both parties expressed outrage over the size of the breach as well as the company’s response and grilled Smith on the timeline of the incident, including when top executives learned about it.

              Smith said the rising number of hacks involving Social Security numbers have eroded its security value.

              “The concept of a Social Security number in this environment being private and secure — I think it’s time as a country to think beyond that,” Smith said. “What is a better way to identify consumers in our country in a very secure way? I think that way is something different than an SSN, a date of birth and a name.”

              Joyce said officials are looking into “what would be a better system” that utilizes the latest technologies, including a “modern cryptographic identifier,” such as public and private keys.

              Read more: Five Data-Security Ideas Brought Up During the Equifax Hearing

              ‘Flawed System’

              “It’s a flawed system that we can’t roll back that risk after we know we’ve had a compromise,” he said. “I personally know my Social Security number has been compromised at least four times in my lifetime. That’s just untenable.”

              Joseph Lorenzo Hall, chief technologist at the Center for Democracy and Technology in Washington, said one possibility could be giving individuals a private key, essentially a long cryptographic number that’s embedded in a “physical token” that then requires users to verify that the number belongs to them. It could work like the chip in a credit card that requires the owner to enter a pin allowing use. He pointed to Estonia where they have deployed such cards that people use to validate their identity.

              “Your pin unlocks your ability to use that big number,” he said. The challenge is how to create the identifiers and how to distribute the keys. “It’s very promising” and “it’s possible to technically design something like this” but it could be expensive to design and disseminate such material to each American, he said. “This is a pretty big endeavor.”

              The administration is also participating in discussions Congress is having about the requirements of protecting personal data and breach notifications for companies.

              Avoiding Balkanization

              “It’s really clear, there needs to be a change, but we’ll have to look at the details of what’s being proposed,” Joyce said. In the response to the Equifax hack, though, he said, “we need to be careful of Balkanizing the regulations. It’s really hard on companies today” facing local, state and federal regulators as well as international rules, he added.

              The U.S. government began issuing Social Security numbers in 1936. Nearly 454 million different numbers have been issued, according to the Social Security Administration. Supplanting such an ingrained apparatus would not happen over night. The original intent was to track U.S. workers’ earning to determine their Social Security benefits. But the rise of computers, government agencies and companies found new uses for the number, which gradually grew into a national identifier.

              Over the decades, the Social Security number became valuable for what could be gained by stealing it, said Bruce Schneier, a fellow at Harvard’s Kennedy School of Government. It was the only number available to identify a person and became the standard used for everything from confirming someone at the doctor’s office to school.

              Akin to Infrastructure

              “They appeared at an age when we didn’t have other numbers,” Schneier said in an interview. “Think of this as part of our aging infrastructure” from roads and bridges to communications. “Sooner or later we as a society need to fix our aging infrastructure.” 

              He pointed to India’s wide-scale rollout of the Aadhaar card, a unique number provided to citizens after collecting their biometric information — fingerprints and an iris scan — along with demographic details, to almost 1.2 billion people. In the U.S., a more secure system could be designed, “but magic math costs money,” he said.

              Making any changes to the current system, including replacing numbers entirely or restricting who can use them, would likely require an act of Congress, according to Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, which advocates for limiting the use of Social Security numbers. 

              Rewriting Laws

              “You’d need to change a lot of existing public law," Rotenberg said. “There would need to be extensive hearings and study about the consequences. It’s a complicated issue." 

              The government’s own record of protecting Social Security numbers has its blemishes. Medicare, the federal health-care program for senior citizens, has long used the numbers on identification cards recipients must carry. After years of criticism by the agency’s inspector general for the risks that creates, new cards with different numbers are currently being rolled out.

              The failure of the Social Security number is that there’s only one for each person, “once it’s compromised one time, you’re done,” Bob Stasio, a fellow at the Truman National Security Project and former chief of operations at the National Security Agency’s Cyber Operations Center.

              Public and private keys — long strings of code — could help validate identities. For instance, the government could issue each person a public key and private key. If people were to open a bank account, for instance, they could provide their public key — instead of a Social Security number — and the bank would send a message that could only be decrypted using their private key. If the private key gets compromised, the government could easily issue another one.

              Saved by Math

              Stasio also cited emerging blockchain technology as another potential tool. It could create a kind of digital DNA fingerprint that’s “mathematically impossible” to duplicate. In place of a Social Security number, each person could receive a blockchain hash — a kind of algorithm unique to an individual — that is stamped on every digital transaction or action.

              That type of technology “could be used as a much more efficient and mathematically sound method of transaction, identification and validation,” Stasio said.

              While lawmakers were unanimous in criticizing Equifax’s response to a breach that compromised information on 145.5 million U.S. consumers, they were divided on how to fix the underlying issue. Democrats on the panel have reintroduced legislation imposing requirements for when companies have to report data breaches, while Oregon Republican Greg Walden noted the company’s human errors, saying “you can’t fix stupid.”

              Smith said the Equifax employee responsible for communicating that the vulnerable software needed to be patched didn’t do so. That failure was compounded when a scan of the company’s systems didn’t find that the vulnerability still existed, the former CEO said.

              Joyce’s comments helped take some of the focus off Equifax’s blunders, analysts at Cowen Inc. said in a note Tuesday.

              The “White House may be indirectly coming to Equifax’s rescue,” they wrote. “This reduces the risk of business-model-busting legislation such as a requirement that consumers opt-in to a credit bureau collecting their data.”

                Read more: http://www.bloomberg.com/news/articles/2017-10-03/white-house-and-equifax-agree-social-security-numbers-should-go