Resistance State: California in the Age of Trump
Between Sacramento and Washington D.C. sits the rest of the country, and a chasm. On immigration and taxes, guns and healthcare, cannabis and climate change, California is the federal government’s equal and opposite reaction. One year into President Trump’s first term, the push and pull continues—playing out under the Capitol dome, in the courts and on Twitter.
Ready for another year? Follow along here.
President Trump today unveiled his proposal to revamp the federal tax code, and state Democrats swiftly pointed out that it could hit Californians particularly hard by revoking a deduction that disproportionately benefits the Golden State.
Short on detail, Trump’s framework calls for the elimination of “most itemized deductions” with the exception of the write-off on mortgage interest payments and charitable giving.
Getting rid of the deduction on state and local tax payments—a tax break that allows taxpayers to write off some of their non-federal taxes—would have little consequence for Red states that have low local taxes. But it would have a major impact on Californians, both because of our higher-than-average state and local tax rates and our sizable population of millionaires (lower earners tend not to take the standard deduction). In 2015, Californians used the deduction to write off nearly $113 billion in earnings.
“Elimination of the state and local tax deduction could lead to an economic downward spiral in California, including the loss of good-paying jobs and cuts to critical public safety and social service programs,” Democratic State Controller Betty Yee said in a statement.
State Senate President Pro Tem Kevin de León also chastised the president for possibly eliminating state and local deductions. “President Trump and Republicans in Congress again show where their true priorities lie: making the lives of the rich easier and the lives of working Americans dramatically tougher,” he said in his own statement.
Under Trump’s proposal, however, the standard deduction available to all taxpayers would be nearly doubled. The plan also envisions cutting income taxes on corporations and pass-through businesses, allowing more families to take advantage of the Child Tax Credit, and repealing both the Alternative Minimum Tax and the Estate tax.
That last proposal earned a special call out from Democratic State Sen. Scott Wiener of San Francisco.
“California does not have to follow Washington down this foolish path” he said, “but instead we can enact our own estate tax.” Last year Wiener proposed putting a measure on the 2018 ballot that would amend the state constitution to allow a state tax on inheritances over a multimillion-dollar value.
For now, Trump’s proposal is just that—a proposal. Any reforms to the tax code will have to be voted into law by Congress.
California Attorney General Xavier Becerra filed a federal records request today for information about the impact of the Trump administration’s “zero tolerance” policy on immigrant children’s mental and physical wellbeing.
The Freedom of Information Act request seeks all records related to the creation of the policy and the federal government’s determination of its ability to care for the influx of children detained as a result of the policy.
The request follows a hearing last week in which federal health official Jonathan White said he warned the Trump administration of potential negative effects children could suffer if they were parted from their undocumented immigrant parents. “Separation of children from their parents entails significant harm to children,” said White. “There’s no question that separation of children from parents entails significant potential for traumatic psychological injury to the child.”
“Last week’s Congressional hearing shows that this President and his Administration received warnings about the impacts of the family separation policy and still acted,” said Becerra in a press release. “We must have answers and accountability. We all deserve to know what went into the federal government’s inconceivable decision to separate thousands of children from their families.”
Becerra’s request targeted the Justice, Homeland Security and Health and Human Services departments, and included disclosure of senior staff communications—including memorandums, emails, and notes of meetings or calls regarding the “zero tolerance” policy. He specifically is pursuing internal communications from Attorney General Jeff Sessions, Homeland Security Secretary Kirstjen Nielsen and the current and former secretaries of Health and Human Services.
President Trump has defended the policy as necessary to stem what he has characterized as a host of societal ills resulting from illegal immigration. “It’s about keeping families together, while at the same time, being sure that we have a very powerful, very strong border,” he said in a statement.
Note: This post has been revised to correct the number of lawsuits Becerra has filed against the Trump administration.
Legislators in California appear ready to counter a new Trump administration move, this time on health insurance.
Last week, federal officials announced they would expand health insurers’ ability to sell so-called skinny insurance plans, short-term policies that offer only bare-bones benefits. Those plans also are called “junk” plans because of the dearth of conditions and ailments they cover—for instance, most don’t cover maternity care or cancer treatment, and some have high deductibles or exclude pre-existing conditions.
Less expensive because of the “skinny” coverage, the plans were launched under the Obama administration as a bridge to Affordable Care Act plans. They were limited to three months and could not be renewed.
The new federal rules allow low-benefit plans that don’t comply with ACA standards to last a year and be renewed for up to three years.
A proposal making its way through California’s Legislature, which returns from summer recess tomorrow, would ban such insurance in California.
SB 910, by Democratic Sen. Ed Hernandez of Azusa, would outlaw issuance or renewal of any health plan shorter than 12 months in duration. ACA standards require longer-term insurance, bar denial of coverage based on pre-existing conditions and mandate 10 essential health benefits.
The short-term, low-benefit plans are fine as long as you stay well, Hernandez said. But people with those plans who get sick often discover they have to pay for treatment and medication themselves. Basically, he said, that’s not health care coverage.
“California needs to ban junk health insurance policies in our state, not only because they are an affront to the basic principles of the Affordable Care Act, but also because they are dangerous and deceiving,” Hernandez said by email Friday.
Dozens of Republican legislators have either voted No on his bill or abstained, but did not articulate that opposition in hearings. Attempts to contact several of them were unsuccessful Friday.
One health care expert said he had hoped the idea of limited-benefit plans had been put to rest, after the years of policy discussion before and during setup of the Affordable Care Act.
“There are significant costs to having skinny plans,” said Micah Weinberg, president of the Bay Area Council’s Economic Institute, a San Francisco-based business think tank. “People still get medical care, even if it’s not covered, so the hospitals or the state end up holding the bag.”
That means taxpayers are basically subsidizing people on limited-benefit plans, he said.
“It isn’t actually insurance,” Weinberg said. “It provides a sense that you’re insured, but if you need it, you don’t really have it.”
- Short-term insurance expansion 'bad news for small businesses', by Mark Herbert, California Director for Small Business Majority on Aug. 8, 2018
A federal appeals court ruled today that President Trump does not have the authority to withhold federal funding from so-called sanctuary cities and counties.
Upholding a lower court decision, the U.S. 9th Circuit Court of Appeals said the power to allocate federal funding belongs to Congress: “The Executive Branch may not refuse to disperse the federal grants in question without congressional authorization.”
Last year, U.S. District Judge William H. Orrick III in San Francisco issued a national injunction against an executive order that Trump issued five days into his presidency. The president’s order directed that federal monies be withheld from “sanctuary” jurisdictions such as San Francisco.
San Francisco and the County of Santa Clara, which have declared themselves sanctuary jurisdictions, limiting cooperation with federal immigration authorities, sued the Trump administration.
Orrick said Trump’s order was unconstitutional, violating the Separation of Powers doctrine and the Fifth and Tenth amendments.
Today, the 9th Circuit panel of judges agreed but removed his injunction, except in California, citing a lack of evidence to keep it in place elsewhere and returning it for reconsideration. The judges said California, specifically San Francisco and Santa Clara counties, are “likely targets” of Trump’s order and retained it for the state.
The federal Justice Department denounced the decision on funding as “a victory for criminal aliens in California.” The state “will protect them from federal immigration officers whose job it is to hold them accountable and remove them from the country,” spokesman Devin O’Malley said in a written statement.
California laws limiting cooperation with federal immigration agents went into effect this year. Dozens of local governments have dissented, suing the state, joining a federal lawsuit against the policy or taking other actions.