Newsletter: California Inc.: Vote coming on GOP tax plan that could put hit on state economy
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Investors are still digesting the flurry of news from recent days. Disney swallowed the Hollywood parts of 21st Century Fox. The Federal Communications Commission repealed net neutrality. I mean, what next? Allegations of strippers, drugs and sex at a California bank?
LOOKING AHEAD
Holiday road: Thursday and Friday are expected to be the busiest travel days of the holiday period, according to the Transportation Security Administration. Be ready for more congestion than usual on land and in the air. AAA predicts a 3.5% increase this year in holiday travel by road and 5.5% growth in air travel. In all, says AAA, 13.2 million Californians are expected to travel at least 50 miles from home between Saturday and Jan. 1.
Consumer agency: Who will lead the Consumer Financial Protection Bureau? That question will be debated in court Friday as the legal battle between CFPB Deputy Director Leandra English and the Trump administration enters its next phase. English has asked U.S. District Judge Timothy J. Kelly for an injunction to force White House budget chief Mick Mulvaney to step down as interim CFPB chief until a permanent director is chosen by President Trump. The bureau’s first director, Democrat Richard Cordray, resigned Nov. 24 and named English as his temporary successor.
Government shutdown? You’ve probably heard this one before, but the federal government faces another possible shutdown this week if Congress can’t agree on a funding bill. Two weeks ago, we were in this exact situation when Republicans and Democrats — unable to reach agreement on a long-term spending plan — decided to fund the government for an additional 14 days. That money runs out at the end of Friday.
Park fees: Friday is the deadline if you want to comment on the National Park Service’s proposal to raise vehicle entrance fees by up to 180% at the nation’s most popular parks during peak visiting season. The deadline was originally Nov. 23, but the Park Service extended it to “accommodate interest in this issue from members of Congress and the public.” The proposal calls for a $70 fee for each private, noncommercial vehicle — up from current fares of $25 to $30. You can comment here.
New releases: Hollywood rolls out a mixed selection of movies for Christmas weekend, typically a popular time for families to head to the theater. Steven Spielberg’s Pentagon Papers drama “The Post,” from 20th Century Fox, has already been named the year’s best picture by the National Board of Review. Those seeking lighter fare may opt for Universal Pictures’ musical sequel “Pitch Perfect 3” or Paramount Pictures’ quirky Alexander Payne comedy-drama “Downsizing.” All three open Friday.
THE AGENDA
Monday’s Business section puts the Republican tax plan under a microscope and finds that there are some changes that could ultimately prove a drag on growth and harm California’s competitiveness. The downbeat assessments reflect various ways Republicans have chosen to help offset the cost of their tax cuts for businesses and individuals. Eliminating key deductions is expected to raise the cost of living for many middle- and upper-income households in an already pricey state.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Disney-Fox deal: Walt Disney Co.’s acquisition of $52.4 billion in 21st Century Fox assets is likely to raise thorny regulatory concerns at a time when the Justice Department has been putting media mergers under the microscope. If approved by regulators, the all-stock deal would create an entertainment powerhouse and transform the Hollywood landscape. But the deal also could bring substantial job cuts in Southern California.
Net neutrality: Federal regulators voted to repeal Obama-era net neutrality rules for internet traffic — a major victory for telecom companies and another milestone for the Republican deregulation push under President Trump. Moments after the vote, however, a California state senator pledged to introduce legislation that would preserve open internet protections for consumers. “Net neutrality is essential to our 21st century democracy,” declared Sen. Scott Wiener (D-San Francisco).
Tax bill: Republican lawmakers on Friday released the final version of their $1.5-trillion tax cut — a move that they say will boost economic growth but that critics say will run up deficits and primarily benefit the wealthy. As haggling over the contents of the bill came down to the wire, GOP negotiators slightly increased the refundable portion of the expanded child tax credit in their tax plan, raising it to $1,400 in hopes of winning Sen. Marco Rubio’s (R-Fla.) support in a vote expected this week.
Accused: After at least 11 accusations of sexual misconduct against Russell Simmons — seven of which allegedly happened in New York City — the New York Police Department’s special victims unit has opened an investigation into the embattled music mogul. Simmons, co-founder of record label Def Jam Recordings, has denied all the accusations. Still, popular debit card brand RushCard, co-founded but no longer owned by Simmons, is cutting ties with the hip-hop pioneer.
Heading south: When devastating hurricanes pummeled Texas, Florida and several Caribbean islands this summer, vacationers didn’t stay home and mope. Instead, airline data show many travelers rebooked their vacations in Mexico. From October 2017 through March 2018, U.S. and international carriers added more than 600,000 seats on flights to popular Mexican destinations such as Puerto Vallarta, San Jose del Cabo, Mexico City and Cancun.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Cheat code: A massive cyberattack that brought down the internet in much of the United States in 2016 was caused by three college-age men who were just trying to gain an edge in the online game Minecraft, reports Wired. Paras Jha, Josiah White and Dalton Norman created a “botnet” — a hacking tool that infiltrates other computers — that proved far more powerful than they imagined. “They didn’t realize the power they were unleashing,” said an FBI agent.
Dining espionage: Restaurants go to extremes to win the favor of food critics, reports the Washingtonian. Restaurants track the aliases, phone numbers and email addresses used by critics so they can spot when the writer attempts to make an incognito reservation. Critics’ pictures are posted in kitchens. “Many restaurants go further, applying CIA-level tactics to tracking personal information and preferences of the people who might write about them.”
Digging deeper: One of the world’s richest men wants to bring to science the same kind of sophisticated data analysis that helped make him billions in hedge funds, the New Yorker reports. Jim Simons hopes his Flatiron Institute can help find scientific breakthroughs amid mountains of data. “The institute’s aim is to help provide top researchers across the scientific spectrum with bespoke algorithms that can detect even the faintest tune in the digital cacophony.”
Dunked: The grandiose ambitions of the University of Louisville athletic department came crashing down this year after an FBI investigation and a bribery accusation raised questions about the school’s close financial ties to Adidas, reports Bloomberg. “There are many who believe the FBI arrests will mark a turning point in college sports writ large, especially if arrests continue and eventually lay bare the depth of corruption and greed in college sports.”
SPARE CHANGE
That story about hoops-gone-wrong puts my mind to basketball on film. I’m going out on a limb here and stating definitively that “Hoosiers” isn’t just the greatest basketball movie ever but the greatest sports movie ever. Oh sure, you can throw “Bull Durham,” “Rocky” and “Seabiscuit” in my face. But nothing beats “Hoosiers” for great characters, great story and great game sequences. Spoiler alert: The good guys win.
For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
