Growing fear inside GOP about Trump

Washington (CNN)Top Republican officials and donors are increasingly worried over the threat Donald Trump's attack on a judge's Mexican heritage could pose to their party's chances in November -- and about the GOP's ability to win Latino votes for many elections to come.

Trump is under fire for repeatedly accusing U.S. District Judge Gonzalo Curiel, who is overseeing a lawsuit involving Trump University, of bias because of his Mexican heritage. Those concerns intensified Sunday after Trump said he would have the same concerns about the impartiality of a Muslim judge.

House and Senate GOP leaders have condemned Trump's remarks about Curiel, while donors have openly worried that losing Latino voters could doom them in key down-ballot races. Other important party figures, including former Speaker Newt Gingrich, are urging Trump to change his combative, confrontational style before it's too late.

The GOP's deepest fear: A Barry Goldwater effect that could last far longer than Trump's political aspirations.

Goldwater, the Arizona senator who was the 1964 GOP nominee and a leader of the conservative movement, alienated a generation of African-American voters by opposing the Civil Rights Act -- opening the door for Democrats to lock in their support for decades. Republicans fret that Trump could similarly leave a stain with Latino voters.

'Concerned'

"I am concerned about that," Senate Majority Leader Mitch McConnell, R-Kentucky, said Sunday.

"America is changing. When Ronald Reagan was elected, 84% of the electorate was white," McConnell said on NBC's "Meet the Press." "This November, 70% will be. It's a big mistake for our party to write off Latino Americans. And they're an important part of the country and soon to be the largest minority group in the country."

"I hope he'll change his direction on that," said McConnell, who first made the Goldwater comparison last week in an interview with CNN's Jake Tapper.

That hasn't happened yet. In interviews Sunday, Trump wouldn't back away from his assertion that Curiel's parents' birth in Mexico has left the judge angry over Trump's proposal to build a wall along the U.S.-Mexico border and biased in the legal case over Trump University. Trump even went further, saying on CBS' "Face the Nation" that he'd have similar concerns over a Muslim judge, since he has proposed banning all Muslims from entering the United States.

Trump's remarks led to condemnations from the same leading Republicans that in recent weeks have embraced him -- and accepted that the party's fate in November is inextricably linked to his.

"I don't agree with what he had to say," McConnell said.

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"This is a man who was born in Indiana," McConnell said of Curiel. "All of us came here from somewhere else. Almost all Americans are either near-term immigrants like my wife, who came here at age 8 not speaking a word of English, or the rest of us whose ancestors were risk-takers who came here and made this country great. That's an important part of what makes America work."

House Speaker Paul Ryan, just a day after announcing his endorsement of Trump,bashed him on a Wisconsin radio station.

"Look, the comment about the judge, just was out of left field for my mind," Ryan said Friday on WISN in Milwaukee. "It's reasoning I don't relate to, I completely disagree with the thinking behind that."

The criticism from McConnell and Ryan was predictable: Both preside over GOP majorities that are threatened thanks to competitive races in Latino-heavy states like Arizona, Nevada and Florida.

More surprising was the condemnation from Gingrich, who has transparently jockeyed for a spot on Trump's ticket.

"I don't know what Trump's reasoning was, and I don't care," Gingrich told The Washington Post. "His description of the judge in terms of his parentage is completely unacceptable."

Gingrich was even sharper on "Fox News Sunday," calling Trump's remarks "inexcusable."

'One of the worst mistakes'

"This is one of the worst mistakes Trump has made," Gingrich said.

Tennessee Sen. Bob Corker, the Armed Services Committee chairman who has provided key Republican support for Trump's foreign policy stances and is also often named as a prospective vice presidential candidate, rebuked Trump's comments about the judge on ABC's "This Week."

"I think that he's going to have to change," Corker said of Trump's overall behavior and campaign tactics.

Trump's campaign downplayed the impact of his assertion that the judge's Mexican heritage could preclude him from delivering fair rulings in the Trump University case.

A Trump official said the remarks are "no reason to celebrate, (but) no reason to panic" -- an indication there is concern inside the campaign but Trump's aides don't believe it's damaging long-term.

Another campaign adviser laughed when asked if Trump officials can talk to the candidate about watching what he says.

Alberto Gonzales, who led the Justice Department under President George W. Bush from 2005 to 2007, wrote in a Washington Post op-ed Saturday that Curiel's Mexican heritage shouldn't be enough to disqualify him from overseeing the case. But, Gonzales said, Trump is entitled to a fair trial, and the appearance of impropriety could be enough for him to reasonably request that Curiel recuse himself.

Trump thanked Gonzales for his support.

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Inside the Republican Party, campaigns and donor circles, fear over the damage Trump's remarks could do to the party's relationship with Latino voters was palpable.

"Awful," a top Republican official said of Trump's attack on the judge. "We are all beside ourselves."

The official went on to say that "you have to feel for Paul Ryan," who had just announced his support for Trump.

Depth of concerns

In a series of interviews with donors, fundraisers and congressional officials, the depth of the concerns about what Trump's latest attacks underscore become clear.

"Honestly? My worst fear. Call me stupid -- I was one of the guys who figured he'd do the whole pivot thing," said one donor, referring to an often-used strategy of moving more to the middle after securing the nomination.

The donor, who had been active for several candidates during the primary, said he was "ready to get in line" once Trump signed the joint-fundraising agreement last month with the RNC. The bold names associated with the joint agreement -- people like businessman Woody Johnson -- were enough of a sign, the donor said.

Now? "Not so much."

But it may be bigger than that, according to several GOP officials. Republicans are defending 24 seats in the Senate while holding a slim four-seat majority. While the House majority is significantly more robust -- 58 seats -- there are members in that chamber who saw their seats move into riskier positions the day Trump locked up the nomination.

Why some Republicans are hesitant to trust Trump

The solution -- one that top GOP officials on Capitol Hill have been repeating in the weeks since -- has been to make sure top donors dump cash into the down ballot races.

Up to this point, they've done just that. One fundraiser with ties to one of the two primary GOP congressional super PACs said donors have been "burning up the phone lines" trying to figure out how to help protect GOP majorities in Congress.

The primary Senate GOP super PAC, the Senate Leadership Fund, had more than $16.3 million on hand at the end of April, the last time numbers were reported with the FEC. The group raised more than $4 million in March and April alone -- a number that, according to the fundraiser, will increase "significantly" in the months ahead.

The top House super PAC, the Congressional Leadership Fund, nearly doubled its 2015 fundraising in the first quarter of 2016 alone.

"The concern is -- do we get to the point that all the money in the world doesn't matter?" asked another donor, who said his whole goal this cycle was to protect House and Senate candidates. "We're obviously not there right now, but stupid s--- like this really makes you wonder."

Democrats are certainly trying to make each Trump comment sting. The party's House and Senate campaign committees are firing out a steady clip of press releases attempting to tie each vulnerable candidate to Trump. Democrats make clear those comments will be featured heavily in the fall in attack ads.

Perhaps more noticeably, over the weekend, talks between top GOP figures about the future of the party have become more urgent. Several Republican officials pointed to McConnell's comments to Jake Tapper on CNN last week, where he first voiced concern about Trump's effect on Latino voters mirroring that of Goldwater's effect on black voters.

Yet those same officials watched McConnell go to great lengths not to say that Trump's attacks on the judge in the Trump University case were racism.

McConnell won't say if Trump's judge attack was racist

"That was just painful," said one Republican official who served in George W. Bush's administration. The official added that the reality is McConnell -- and Ryan and every Republican in a leadership position or facing an election challenge -- "will be stuck dealing with the latest Trumpism every interview of every day, of every month until November."

PSF kicks off drive for student unions revival

LAHORE: The People’s Student Federation (PSF) took out a motorcycle procession here on Sunday to kick off a campaign for restoration of student unions in the educational institutions.

The procession of the student wing of the Pakistan People’s Party started from Model Town and ended at the Governor House where the participants held a demonstration to demand restoration of the student unions.

The PSF activists held the party flags. Some PSF and PPP leaders were riding on a truck decorated with a large picture of the party chairman Bilawal Bhutto Zardari.

Addressing the participants, PPP Punjab organising committee member Nadeem Asghar Kaira said the PSF’s large procession was enough to open the eyes of the analysts who had termed the PPP dead in the province. He said the student unions were banned by Gen Zia to promote his extremist agenda in educational institutions.

“Shaheed Benazir Bhutto had restored the democratic right of students but the unions were again banned,” he said, adding PPP chairman Bilawal Bhutto had already announced that he would restore student unions after coming to power.

Former president of the PSF Punjab University, Faisal Mir, said Pakistan was the only democratic country in the world where students were not allowed to form unions. He said the PPP would establish the PSF in every college and university of Lahore and bring about a revolution under the leadership of Bilawal who “is an ideal leader for students”.

Ex-president PSF Lahore division Imran Dogar said the PSF would prove itself as strong arm of Bilawal and warned the PSF would take to the street if student unions were not restored.

Dr Zarrar Yousuf, Shahzad Shafi, Aqib Sarwar and Ali Ahsan Awan also spoke.

Earlier, Bilawal Bhutto had directed the Sindh and Azad Jammu and Kashmir governments to lift the decades-old ban on student unions in educational institutions to allow the students to participate in the healthy democratic activities. He also asked them to make appropriate legislation and rules in this regard.

The mainstream student organisations like the Islami Jamiat Talaba (IJT), Muslim Students Federation (MSF), Peoples Students Federation (PSF) and Insaf Students Federation (ISF) believe the other provinces, especially Punjab, may find no excuse for ban on student unions if such unions are restored in Sindh and AJK and elections are held subsequently.

Senate Chairman Raza Rabbani recently had also termed the ban on student unions in educational institutions “unconstitutional” and referred the matter to a committee of the whole house to submit recommendations.

Fan makers no longer ‘fan of finance minister’

GUJRAT: Despite repeated appeals by manufacturers of electric fans to abolish the 27.5 per cent regulatory and customs duty on the import of electrical steel sheet, the federal government has increased the levy further by 1pc, putting the figure now at 28.5pc.

Gujrat Chamber of Commerce and Industry President Mian Muhammad Ijaz said the pre-budget recommendations had been ignored.

He said electrical steel sheet was one of the major raw materials necessarily required for producing energy-efficient fans. “The regulatory duty, 17pc sales tax, 5pc income tax, 2pc surcharge and other levies have put the over-all cost of the import around 55pc.”Ijaz said he along with other chambers had presented the proposal of bringing the import duty to only 5pc on all the raw material for export-oriented textile, leather, carpet, sports, surgical, engineering, electric fans industries. However, the government facilitated only five sectors ignoring the entire engineering industry including fans sector, by not reducing the duty on import of steel sheet.

He said the federal government had failed to give any incentive to the export-oriented fans industry, besides furniture and pottery sectors of Gujrat.

According to him, the ministries of water and power, industry, commerce, planning, science and technology had also emphasised the finance ministry to reduce duty on the import of steel sheet which was a vital component in reducing energy consumption since the country had been facing power shortage.

GTCCI former president Haji Muhammad Ilyas, a pioneer in the export of electric fans, said since the imposition of heavy duty on the import of electrical steel sheet, only three to four manufacturing units were directly importing the raw material as the government through an order had relaxed the duty only to those who could directly import it.

But rest of the manufacturers who also used to export fans had to rely on the commercial importer that further enhanced the market rate of the sheet whereas the small-scale manufacturers were compelled to use locally-made sheet after recycling the scrap which is considered a substandard material because of more energy consumption, he said.

Another local manufacturer said more than Rs600 million sales tax refund of the Gujrat industry was yet to be paid by the federal government.

Ali Usman, executive member of the GTCCI, said there was no major package for any industry of Gujrat in the budget.

Vigil for murdered activist moved due to security fears

ISLAMABAD: Though vigils in memory of rights activist Syed Khurram Zaki were held around the world on Sunday, the venue for the vigil in Islamabad had to be changed after it was learnt that the Difa-i-Pakistan rally might pass by.

Fearing an “untoward situation” the vigil’s venue was moved from F-6 to F-7 Markaz.

A few participants could be seen looking around nervously and keeping an eye on passersby, presumably fearing an attack.

Zaki was a journalist and human rights activist with a long history of standing against extremism. He was assassinated in Karachi on May 7.

Vigils were held in various Pakistani cities, and in the United States and the United Kingdom. In Islamabad, participants of the vigil prayed and later dispersed, after recalling the efforts of the late activist.

High Court advocate Asif Mumtaz Malik, who represented Zaki in a number of cases, told Dawn that Zaki had been facing threats because he had filed cases against the head of the Red Mosque, Maulana Abdul Aziz, and his wife Umme Hassan.

“This February, Zaki tried to register cases against Maulana Aziz and his wife, because the Maulana spread hatred against Shias and his wife invited the Islamic State (IS) to Pakistan,” he said.

“The Aabpara police refused to register cases, so we went to the sessions court to get an order for the registration of an FIR under section 22-A, but the court said the government should be the complainant.

“We went to the Islamabad High Court (IHC) and then for an intra-court appeal, but instead of giving any decision, we were told to go to the magistrate for the registration of an FIR,” he said.

“We were considering going to the Supreme Court because we were hopeful that at least the Supreme Court would give a clear decision. Meanwhile a campaign, by the Red Mosque, was started on social media against Zaki and rights activist Jibran Nasir. It was even suggested to recognize their faces and they were declared enemies,” he said.

He added: “We strongly believe that the Red Mosque management was involved in Zaki’s murder and after the assassination, we filed an application due to which an FIR was registered on May 8 in Thana Sir Syed Karachi.

“Maulana Abdul Aziz and Sarwat Qadri were nominated, but they could not be arrested, which is another violation of the law.”

Other participants at the vigil said the event aimed to send the message that a number of people are still standing against extremism and extremists.

Budget 2016-17: Budgeting for the rich

WHATEVER the budget to be announced tomorrow contains, there are two crucial areas where we can already say it will fall woefully short. These areas are safeguarding the interests of the poor and those of future generations.

In a country where a third of the population can be said to be living on a monthly per adult income of Rs3,000, there can be no other priority more important for the economic policymaker than to ensure that this segment can improve their lot.

And in a country where the dismal tax-to-GDP ratio ensures a constant build-up of unsustainable debt, the interests of future generations fall by the wayside. Instead the country’s economic policy is designed to safeguard the interests of its creditors first, to meet its own current expenditures second and the profits of its business elite third, with all else coming a distant fourth.

This budget is not going to be any different. A sleight of hand ensures that the interests of the poor are defined as a subset of the interests of the business elite by proposing economic and industrial growth as the sole solution to poverty alleviation. And a constant muddle through approach towards revenue generation, with future capital investments left largely to projects in the China-Pakistan Economic Corridor (CPEC) ensures that the today’s consumption is paid with tomorrow’s possibilities.

An example makes this clearer. Ever since the government abandoned any attempts at comprehensive tax reform designed to document the economy, it has muddled through with revenue measures that burden existing taxpayers. Last year it introduced a new tax that it billed as a documentation exercise which called for a 0.6 per cent tax on banking transactions of all those who are non-filers of income tax returns.

As a documentation measure this was fine. Initially it led to a sharp increase of currency in circulation, meaning people preferred to transact in cash rather than use banking instruments to avoid this tax. All the government had to do was hold the line and eventually those non-filers who transact large volumes, millions of rupees on a daily basis, would find cash too cumbersome to continue with.

But the government blunted the impact of this measure by entering into negotiations with the trader community, which was the main target of the tax, and which led the protests against it. It agreed to reduce the rate to 0.3pc, and kept extending the deadline by when traders were required to file their returns.

As a result, traders kept using cash as a medium in the hopes that the tax will soon be withdrawn. This constant cycle of negotiation and extensions fuelled the wrong hopes, and the consequence is that currency in circulation accounts for 80pc of all the fresh money created since July 1 of last year — when the fiscal year began and the tax began to be applied. By comparison in the preceding year this same percentage was 40pc.

Bankers are nervous about this development. “This volume of cash in circulation can be dangerous for the economy,” says one senior banker who did not wish to speak for attribution. “It can trigger speculation, in commodities, property, stocks, and then it can be very hard to get a handle on things.”

Now we hear the government is keen on expanding this tax to other sectors too, having tasted the revenues from it. As a documentation measure the idea is a good one, but as a revenue measure it is a lousy idea. We are reduced to resorting to these tactics because since 2013 we turned our backs on the best documentation measure that has a proven track record from around the world: the Value Added Tax.

The story on the poverty side is very similar. The last big idea that any budget contained for the poor was the Benazir Income Support Programme (BISP). Since then all we’ve ever seen are growth measures disguised as poverty alleviation, or little schemes like the Prime Minister’s Health Insurance Scheme or a free interest rate scheme.

The good thing about this is that with the poverty score cards that are used for targeting in the BISP, we have the tools to build large scale poverty alleviation programmes. The bad news is that all we’re building are small schemes, many of which barely take off before implementation issues arise, such as with the interest free loans schemes that banks refused to participate in.

With no meaningful policy conversation, let alone proposals, on poverty alleviation, and no substantive movement towards tax reform, the country’s economic policy has lost its moorings. The budget making exercise has now devolved into a massive squabble about who will be charged how much FED next year, whose products will be zero rated for GST purposes, and a collage of schemes for the poor.

Haris Gazdar, one of Pakistan’s leading researchers on poverty, says a policy focus on poverty alleviation is “first and foremost a political choice”. Some political parties propose economic growth as the leading poverty alleviation mechanism, whereas others argue to make this growth more inclusive, although “neither paradigms are actually able to prevail in practice due to the acceptance by the political leadership of existing constraints”.

Inviting the poor to come eat out of your hand is not a poverty alleviation exercise.

And a pass the parcel style revenue effort, where the one holding the bag when the music stops pays the incremental taxes required for next year, is no way to manage a revenue effort. Little wonder then that the country’s domestic debt has jumped almost 50pc since May 2013 and the number of those living below the poverty line has now been set at 29pc of the population.

Economic policy must find a way to make future generations and the poor its central focus. Until that happens, the budget speech might as well be read out in a drawing room somewhere, because that will be the sum total of those for whom it holds any relevance.

Govt ‘overspent’ Rs261bn in FY 2015-16

ISLAMABAD: Despite the government’s protestations of “fiscal discipline”, Finance Minister Ishaq Dar has sought parliament’s post-facto approval for a Rs261 billion ‘supplementary budget’ to cover massive governmental expenditure overruns in the outgoing fiscal year, almost 28pc higher than the figure approved last year.

Many of these overruns could be described as extravagant and avoidable expenses in view of the austerity policy currently in place, a senior government official said. For example, about Rs15 million was spent on the purchase of vehicles by the Prime Minister’s Office and an additional Rs15m paid to ministers and ministers of state as TA/DA.

Similarly, Rs822m was spent by the Foreign Office on the purchase of 35 ‘high security vehicles’, and Rs107m was given to the Capital Development Autho­rity for the construction of Kazakhstan’s embassy in Islamabad.

Another Rs109m was spent by the Ministry of Foreign Affairs on the purchase of an unspecified number of vehicles, despite a ban on the purchase of new vehicles.

According to budgetary documents placed before parliament, approval has been sought for Rs260.88bn in supplementary grants. Of these, grants worth Rs158.88bn are of a ‘technical nature’, while Rs102bn are expenditure overruns or additional expenses that are likely to place an additional burden on the budget.

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Avoidable expenses burdening govt’s ‘supplementary budget’

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A cursory look at the budget documents suggests that some of these additional burdens pertained to the purchase of luxury vehicles for cabinet members and the prime minister’s staff, as well as advertisements, ministers’ allowances, the refurbishment of accommodations for judges and unexplained expenses by intelligence agencies, under the additional expenditure head.

On the other hand, some of these additional expenses include projects of national importance, such as the creation of a special security division for Chinese workers, the strengthening of the civil armed forces and the payment of overrun subsidies to some private entities and sugar barons.

A finance ministry official explained that a major chunk of supplementary grants pertained to technical re-appropriations — the shifting of funds from one head to another or debt rollovers — that had no additional impact on the budget.

However, he confirmed that regular supplementary grants had been significant over the last three years. These included Rs65bn in 2013-14, Rs139bn in 2014-15 and Rs102bn this year, despite the government’s austerity policy.

In its written statement, the finance ministry says that regular supplementary grants were meant “to provide for expenditure purposes that were not foreseen at the time of finalisation of demands for grants. Such supplementary grants put an additional burden on the budget”.

But surprisingly, the ministry was not able to foresee the massive expenditure of Rs102bn when it was formulating the last budget.

Most of these supplementary grants are described as ‘charged expenditure’ out of the federal consolidated fund, which is just presented to parliament for its information and is taken as approved without voting. Simply put, parliament cannot reject these grants because the amount has already been consumed.

For example, despite repeated claims that subsidies will be slashed, the government has actually exceeded subsidy allocations by around Rs45bn, which has now been charged in the budget. Another Rs44bn has been spent on the generic and unspecified head ‘others’.

An even greater amount — Rs33bn — was paid to K-Electric as tariff differential subsidy. Around Rs12bn subsidy was given for rice and cotton, Rs1.6bn support was extended for sugar export and Rs17.8 billion was paid to power companies against receivables from Fata. A Rs5bn contribution was also made to the Asian Infrastructure Investment Bank.

A Rs1.23bn grant was used on the establishment of a dedicated network for sharing classified data and the purchase of jammers by the Intelligence Bureau. Interestingly, the Cabinet Division paid Rs375m for maintenance of the Pakistan Metro Bus System, while Rs50m was paid to the labourers working on the project as a reward for its timely completion.

An additional expense of Rs30bn was made by the armed forces, including Rs20bn for the creation of a special security division to protect Chinese workers, Rs5bn for “IS duty allowance”, Rs3bn for unspecified capacity-building exercises and Rs60m for the Youm-i-Azadi Show on August 14.

An amount of Rs45m was spent on international arbitration against Agility – a firm engaged by the Federal Board of Revenue. An amount of Rs2bn was spent on 6th Population and Housing Census, which could not take place as planned. Around Rs1.528bn was spent on government advertisements, beyond the funds authorised by parliament.

At least Rs13bn was paid separately to the Frontier Corps in Khyber Pakhtunkhwa and Balochistan and Rs5.1bn was given to Pakistan Rangers in Sindh and Punjab. The National Accountability Bureau paid Rs525m for international arbitration in a case against M/s Broadsheet.

Although Rs100bn was separately allocated in the development budget for temporarily displaced persons and security enhancement, an additional Rs15bn was paid for TDPs and related support services of Operation Zarb-i-Azb. The ministries of water and power and petroleum also spent an unauthorised Rs1.5bn on unspecified ‘services rendered’.

A major part of the expenditure overrun was unavoidable to some extent, given the overall economic condition, the deterioration of public-sector companies and poor fiscal management. However, several expenditures, including extravagant spending on publicity, travelling and medical allowances for ministers, advisers and top bureaucrats, could have been avoided.

Jeep rally brings fun for militancy-hit Khyber people

LANDI KOTAL: The entertainment-starved and militancy-affected people of Khyber Agency were provided with a rare opportunity on Sunday when the political administration arranged for the first time a jeep rally.

At least 80 drivers took part in the rally. Frontier 4x4 Jeep Association also collaborated with the administration in holding the event.

Participants of the rally first gathered at Torkham border in the morning for a ‘show run’ up to the historic Bab-i-Khyber in Jamrud. The border crossing remained closed for an hour prior to the start of the rally.

Personnel of Khasadar, Levies and FC were deployed along the border to provide security to the participants of the rally and keep the incoming and returning Afghans at a distance. The ‘show run’ started at around 10am.

Cheerful schoolchildren and local people, gathered at both sides of Peshawar-Torkham Highway, showered rose petals on the participants of the rally. The sight at Bab-i-Khyber was no different as a huge crowed welcomed the rally amid drum beatings and Khattak dance performed by Swat Scouts.

Participants of the rally were then taken to Besai Baba Ghar in Bara from where they embarked upon a 40-km run, passing through Shalobar, Malakdinkhel, Qambarkhel and Sipah areas of Bara.

Unlike Torkham, Landi Kotal and Jamrud where local residents were provided with opportunity to not only witness the rally but to express their jubilations, local administration and security forces had imposed restrictions on residents of the area to remain indoors.

The political administration had also invited some local singers and TV actors to entertain a crowd gathered at the Besai Baba Ghar.

Speaking on the occasion, Political Agent Khalid Mehmud said that the purpose of organising the rally was to send a message to the outside world that Fata in general and Khyber Agency in particular was safe for holding such activities.

“It is a milestone in the history of Khyber Agency that we are able to have opened all the no-go areas and jeeps are now freely running on our roads,” he said.

At the conclusion of the rally, Capt Babar Khan was declared the winner of the 1st Khyber Jeep Rally while Shakeel Burki and Shah Jee Khan were declared second and third respectively.