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States tapping historic surpluses for tax cuts and rebates

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States tapping historic surpluses for tax cuts and rebates

JEFFERSON CITY, Mo. (AP) — Stoked by the largest surplus in state history, Missouri’s Republican-led Legislature devised a $500 million plan to send one-time tax refunds to millions of households. In a shock to some, GOP Gov. Mike Parson vetoed it.

Parson’s objection: He wanted a bigger, longer-lasting tax cut.

“Now is the time for the largest income tax cut in our state’s history,” Parson declared as he called lawmakers back for a September special session to consider a $700 million permanent tax reduction.

Upon its likely approval, Missouri will join at least 32 states that already have enacted some type of tax cut or rebate this year — an astounding outpouring of billions of tax dollars back to the people. Idaho lawmakers are convening Thursday to consider more tax breaks, and Montana lawmakers also are weighing a special session for tax relief.

Flush with federal pandemic aid and their own surging tax revenue, states have cut income tax rates for individuals and businesses, expanded tax deductions for families and retirees, pared back property taxes, waived sales taxes on groceries and suspended motor fuel taxes to offset inflationary price spikes. Many also have provided immediate tax rebates.

Republicans and Democrats alike have joined the tax-cutting trend during a midterm election year.

Yet divisions have emerged about how far to go. While Democrats generally have favored targeted tax breaks and one-time rebates, some Republicans have pressed for permanent income tax rate reductions that could lower tax bills — and state revenue — for years to come. Parson describes it as “real, lasting relief.”

Some budget analysts warn that permanent tax cuts could strain states during a future recession. The U.S. economy has shrunk for two straight quarters this year, meeting one informal sign of a recession.

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“Quite simply, relying on the current surplus to fund permanent tax changes isn’t fiscally sustainable, or responsible, and will ultimately require cuts to state services,” said Amy Blouin, president and CEO of the Missouri Budget Project, a nonprofit that analyzes fiscal policies.

For some states, the current surpluses are unlike anything they’ve previously seen.

The 2022 fiscal year, which ended June 30 for most states, marked the second straight year of large growth in tax collections after economic shutdowns triggered declines early in the coronavirus pandemic. Many states reported their largest-ever surpluses, according to the National Association of State Budget Officers.

“I don’t think there’s been a time in history where states are better equipped to ride out a potential recession,” said Timothy Vermeer, senior state tax policy analyst at the Tax Foundation, a Washington, D.C.-based think tank. “A majority, if not all, of the rainy day funds are in a really healthy position.”

Income tax rate cuts have passed in 13 states this year, already equaling last year’s historic total, according to the Tax Foundation. Republicans control the legislatures in all of those states except New York, where Democrats who wield power accelerated the timetable for a previously approved tax rate reduction.

Republican-led Arkansas was the most recent to take action during an August special session. A new law will speed up a gradual income tax rate reduction enacted last year and provide a one-time inflationary tax credit. Republican Gov. Asa Hutchinson described the $500 million package as “a transfer of wealth from the government to the taxpayer” that “could not have come at a more important time.”

Nationwide, inflation is at a 40-year-high, raising prices on most good and services and squeezing incomes.

At least 15 states have approved one-time rebates from their surpluses, including 10 led by Democratic governors and legislatures, four by Republicans and one — Virginia — with split partisan control.

Democratic-led California, which posted a record $97 billion surplus, is sending rebates of between $200 and $1,050 to individuals earning less than $250,000 annually and households earning less than $500,000.

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All four GOP-controlled states providing rebates — Georgia, Indiana, Idaho and South Carolina — also made permanent income tax rate cuts.

Though often popular, tax rebates do little to fight inflation and “may actually be counterproductive” by enabling additional consumer spending on items in scarce supply and thus contributing to higher prices, said Hernan Moscoso Boedo, an economist at the University of Cincinnati.

Still, big surpluses coupled with inflation make rebates a tempting option for politicians, especially during an election year.

Georgia Gov. Brian Kemp, a Republican facing a re-election challenge from Democrat Stacey Abrams, has been among the most aggressive tax-cutters. He signed legislation gradually reducing the income tax rate from 5.75% to 4.99%. He also signed a measure providing a $1.1 billion tax rebate, with up to $250 for individuals and $500 for couples. He has proposed an additional $2 billion in income and property tax rebates. And after a law temporarily suspending the state’s gas tax expired in May, Kemp extended the gas tax break through mid-September.

“We’re trying to help Georgians fight through this tough time,” Kemp said.

In Colorado, legislative staff estimate it will cost $2.7 million to carry out legislation expediting an income tax refund of $750 for individuals and $1,500 for couples. The constitutionally mandated refund of surplus revenue was originally due to be paid next year but is being distributed now — along with a letter from Democratic Gov. Jared Polis touting it as inflation relief.

Polis, who is up for re-election in November, had been a previous critic of the automatic refund provision. His Republican challenger, Heidi Ganahl, is accusing him of “hypocrisy.”

Idaho Gov. Brad Little, a Republican, has called the Legislature back for a special session starting Thursday to consider more tax breaks.

He’s proposing to use part of the state’s projected $2 billion budget surplus for a $500 million income tax rebate this year. He also wants to cut more than $150 million annually by creating a flat 5.8% income tax rate starting next year. That comes after the state reduced the top tax rate each of the last two years.

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“Folks, this is conservative governing in action,” Little said while asserting the tax cuts still would leave enough money to boost education funding by hundreds of millions of dollars.

Montana lawmakers are weighing whether to convene a special session later in September to provide tax breaks from a budget surplus. A proposal calls for giving $1,000 rebates to homeowners who paid property taxes during the past two years. It also would provide income tax rebates of $1,250 for individuals and $2,500 for couples.

Montana’s Republican House and Senate majority leaders said in a joint statement that the rebates would offer help “as soon as possible with expenses such as gas, groceries, school supplies and so much more.” But some lawmakers, including term-limited GOP Rep. Frank Garner, have expressed reluctance.

“My first concern is if this proposal is driven by an imminent emergency or by those wanting to write checks to voters because their emergency is merely an imminent election,” Garner wrote in an opinion column.

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Associated Press writers Jeff Amy in Atlanta; Jim Anderson and Jesse Bedayn in Denver; Andrew DeMillo in Little Rock, Ark.; Amy Beth Hanson in Helena, Mont.; and Keith Ridler in Boise, Idaho, contributed to this report.

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Lawyers for the US tell a UK court why WikiLeaks’ Julian Assange should face spying charges

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Lawyers for the US tell a UK court why WikiLeaks’ Julian Assange should face spying charges

LONDON (AP) — WikiLeaks founder Julian Assange won’t find out until next month at the earliest whether he can challenge extradition to the U.S. on spying charges, or if his long legal battle in Britain has run out of road.

Two High Court judges said Wednesday they would take time to consider their verdict after a two-day hearing in which Assange’s lawyers argued sending him to the United States would risk a “flagrant denial of justice.”

Attorneys for the U.S., where Assange has been indicted on espionage charges, said he put innocent lives at risk and went beyond journalism in his bid to solicit, steal and indiscriminately publish classified U.S. government documents.

Assange’s lawyers asked the High Court to grant him a new appeal — his last roll of the legal dice in the saga that has kept him in a British high-security prison for the past five years.

The judges overseeing the case reserved their decision, and a ruling on Assange’s future is not expected until March at the earliest.

If judges Victoria Sharp and Jeremy Johnson rule against Assange, he can ask the European Court of Human Rights to block his extradition — though supporters worry he could be put on a plane to the U.S. before that happens, because the British government has already signed an extradition order.

The 52-year-old Australian has been indicted on 17 charges of espionage and one charge of computer misuse over his website’s publication of a trove of classified U.S. documents almost 15 years ago. American prosecutors allege Assange encouraged and helped U.S. Army intelligence analyst Chelsea Manning steal diplomatic cables and military files that WikiLeaks published, putting lives at risk.

Lawyer Clair Dobbin, representing the U.S. government, said Wednesday that Assange damaged U.S. security and intelligence services and “created a grave and imminent risk” by releasing the hundreds of thousands of documents — risks that could harm and lead to the arbitrary detention of innocent people, many of whom lived in war zones or under repressive regimes.

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Dobbin added that in encouraging Manning and others to hack into government computers and steal from them, Assange was “going a very considerable way beyond” a journalist gathering information.

Assange was “not someone who has just set up an online box to which people can provide classified information,” she said. “The allegations are that he sought to encourage theft and hacking that would benefit WikiLeaks.”

Assange’s supporters maintain he is a secrecy-busting journalist who exposed U.S. military wrongdoing in Iraq and Afghanistan. They have long argued that the prosecution is politically motivated and he won’t get a fair trial in the U.S.

Assange’s lawyers argued on the first day of the hearing on Tuesday that American authorities are seeking to punish him for WikiLeaks’ “exposure of criminality on the part of the U.S. government on an unprecedented scale,” including torture and killings.

Lawyer Edward Fitzgerald said there is “a real risk he may suffer a flagrant denial of justice” if he is sent to the U.S.

Dobbin said the prosecution is based on law and evidence, and has remained consistent despite the changes of government in the U.S. during the legal battle.

She added that the First Amendment does not confer immunity on journalists who break the law. Media outlets that went through the process of redacting the documents before publishing them are not being prosecuted, she said.

Assange’s lawyers say he could face up to 175 years in prison if convicted, though American authorities have said the sentence is likely to be much shorter.

Assange was absent from court on both days because he is unwell, WikiLeaks said. Stella Assange, his wife, said he had wanted to attend, but was “not in good condition.”

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Assange’s family and supporters say his physical and mental health have suffered during more than a decade of legal battles, including seven years in self-exile in the Ecuadorian Embassy in London.

“Julian is a political prisoner and he has to be released,” said Stella Assange, who married the WikiLeaks founder in prison in 2022.

“They’re putting Julian into the hands of the country and of the people who plotted his assassination,” she added, referring to unproven claims by Assange’s lawyers that he was a target of a CIA plot to kidnap or kill him while he was in the Ecuadorian Embassy.

Supporters holding “Free Julian Assange” signs and chanting “there is only one decision — no extradition” protested outside the High Court building for a second day.

Assange’s legal troubles began in 2010, when he was arrested in London at the request of Sweden, which wanted to question him about allegations of rape and sexual assault made by two women. In 2012, Assange jumped bail and sought refuge inside the Ecuadorian Embassy.

The relationship between Assange and his hosts eventually soured, and he was evicted from the embassy in April 2019. British police immediately arrested and imprisoned him for breaching bail in 2012. Sweden dropped the sex crimes investigations in November 2019 because so much time had elapsed.

A U.K. district court judge rejected the U.S. extradition request in 2021 on the grounds that Assange was likely to kill himself if held under harsh U.S. prison conditions. Higher courts overturned that decision after getting assurances from the U.S. about his treatment. The British government signed an extradition order in June 2022.

Meanwhile, the Australian parliament last week called for Assange to be allowed to return to his homeland.

Andrew Wilkie, an Australian lawmaker who attended the hearing, said he hoped that sent a strong message to the U.K. and U.S. governments to end the legal fight. “This has gone on long enough,” he said.

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Associated Press video journalists Kwiyeon Ha and Jo Kearney contributed to this report.

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Biden to create cybersecurity standards for nation’s ports as concerns grow over vulnerabilities

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Biden to create cybersecurity standards for nation’s ports as concerns grow over vulnerabilities

WASHINGTON (AP) — President Joe Biden on Wednesday signed an executive order and created a federal rule aimed at better securing the nation’s ports from potential cyberattacks.

The administration is outlining a set of cybersecurity regulations that port operators must comply with across the country, not unlike standardized safety regulations that seek to prevent injury or damage to people and infrastructure.

“We want to ensure there are similar requirements for cyber, when a cyberattack can cause just as much if not more damage than a storm or another physical threat,” said Anne Neuberger, deputy national security adviser at the White House.

Nationwide, ports employ roughly 31 million people and contribute $5.4 trillion to the economy, and could be left vulnerable to a ransomware or other brand of cyberattack, Neuberger said. The standardized set of requirements is designed to help protect against that.

The new requirements are part of the federal government’s focus on modernizing how critical infrastructure like power grids, ports and pipelines are protected as they are increasingly managed and controlled online, often remotely. There is no set of nationwide standards that govern how operators should protect against potential attacks online.

The threat continues to grow. Hostile activity in cyberspace — from spying to the planting of malware to infect and disrupt a country’s infrastructure — has become a hallmark of modern geopolitical rivalry.

For example, in 2021, the operator of the nation’s largest fuel pipeline had to temporarily halt operations after it fell victim to a ransomware attack in which hackers hold a victim’s data or device hostage in exchange for money. The company, Colonial Pipeline, paid $4.4 million to a Russia-based hacker group, though Justice Department officials later recovered much of the money.

Ports, too, are vulnerable. In Australia last year, a cyber incident forced one of the country’s largest port operators to suspend operations for three days.

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In the U.S., roughly 80% of the giant cranes used to lift and haul cargo off ships onto U.S. docks come from China, and are controlled remotely, said Admiral John Vann, commander of the U.S. Coast Guard’s cyber command. That leaves them vulnerable to attack, he said.

Late last month, U.S. officials said they had disrupted a state-backed Chinese effort to plant malware that could be used to damage civilian infrastructure. Vann said this type of potential attack was a concern as officials pushed for new standards, but they are also worried about the possibility for criminal activity.

The new standards, which will be subject to a public comment period, will be required for any port operator and there will be enforcement actions for failing to comply with the standards, though the officials did not outline them. They require port operators to notify authorities when they have been victimized by a cyberattack. The actions also give the Coast Guard, which regulates the nation’s ports, the ability to respond to cyberattacks.

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Jill Biden is announcing $100 million in funding for research and development into women’s health

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Jill Biden is announcing $100 million in funding for research and development into women’s health

WASHINGTON (AP) — Jill Biden on Wednesday announced $100 million in federal funding for research and development into women’s health as part of a new White House initiative that she is heading up.

The money is the first major deliverable of the White House Initiative on Women’s Health Research, which was announced late last year. The money comes from the Advanced Research Projects Agency for Health, or ARPA-H, which is under the federal Department of Health and Human Services.

The first lady announced the ARPA-H Sprint for Women’s Health during an appearance in Cambridge, Massachusetts.

Biden has said women don’t know enough about their health because the research historically has been underfunded and lacking. The White House initiative aims to change the approach to and increase funding for women’s health research.

The $100 million will be used to invest early in “life-changing” work being done by women’s health researchers and startup companies that cannot get private support, Biden said.

“We will build a health care system that puts women and their lived experiences at its center,” she said. “Where no woman or girl has to hear that ‘it’s all in your head,’ or, ‘it’s just stress.’” Where women aren’t just an after-thought, but a first-thought. Where women don’t just survive with chronic conditions, but lead long and healthy lives.”

President Joe Biden created the Advanced Research Projects Agency for Health in 2022 to work on advancing solutions to health issues. The agency is part of what he called his “ unity agenda.”

In the coming weeks, the agency will solicit ideas for groundbreaking research and development to address women’s health, according to the White House.

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The first lady said last year when the White House initiative was announced in November that it grew out of meeting she had had with Maria Shriver, a women’s health advocate and former California first lady. Shriver, Biden said, spoke of the need for a public-private effort to close the gaps in women’s health research. Shriver also participated in Wednesday’s announcement in Massachusetts.

The White House Initiative on Women’s Health Research is led by Jill Biden and the White House Gender Policy Council.

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