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Obama “decree” on immigration sets up 2015 showdown: Steve Forbes

Michael Santoli
Michael Santoli

President Obama’s plan to extend broad protections to undocumented immigrants by executive order will antagonize the Republican Congress and drive it to act on its own to pass more targeted reforms next year, says former GOP presidential candidate Steve Forbes.

President Obama plans to unveil his executive order that will transform the country's immigration system.

“The president is going to try to rule by decree instead of in a Constitutional way of actually having the approval of Congress before you do these things,” Forbes says in the attached video. “I think what that sets the stage for is next year, the GOP Congress will pass reforms like removing caps on H-1B visas for high tech.”

American technology companies avidly want an expansion of this visa program, which enables foreigners with specialized skills to work legally in the U.S. for a period of years. Forbes also advocates loosening rules to allow non-U.S. citizens who come to American universities for advanced degrees to be allowed to stay to work here.

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The proposal to lift caps on H-1B visas enjoys relatively broad support, but the effort is caught up in the larger argument over immigration policy focused on whether to alter legal status for millions of undocumented immigrants who have firm family or work ties to the U.S. President Obama’s expected proposal, to be described in a speech Thursday night, will involve protecting up to five million undocumented residents from deportation pending background checks and payment of back taxes. It is an effort to push immigration reform at a time when prospects for getting a broad policy overhaul through the Congress, newly under full GOP control, appears remote.

In the interview at the CME Group’s (CME) Global Financial Leadership Conference this week in Naples, Fla., Forbes said policy progress on big issues such as immigration and tax reform are contingent on Obama’s willingness to make concessions.

Steve Forbes expects Congress to at least explore the issue of reforming the tax code when the Republicans take control in January

The need to recast the U.S. corporate-tax system – with high stated rates but copious loopholes and pet tax breaks for various industries – is pretty widely acknowledged among members of both major parties.

Yet every serious effort, such as Rep. Dave Camp’s (R.-Mich.) thorough “revenue-neutral” bill, has triggered alarm and push-back from industry and members of Congress who speak on their behalf. Such things as tax deductions for advertising, energy exploration and corporate research were cited for potential elimination in the bill, and the outcry by corporate advocates was intense.

“If the White House indicates it will do serious negotiations, Democrats would be willing to make deals knowing that their back is covered,” suggests Forbes. Such cover is likely needed given that any reform effort will necessarily place so many sensitive provisions on the table.

Speaking of those treasured tax breaks, Forbes summons a lesson of the 1980s push to eliminate a tangled nest of individual tax shelters that had fouled the tax code: “If you touch one of them, you better be ready to touch all of of them.”

This remote-seeming prospect might have become slightly less unlikely given the attention paid this year to “tax inversion” mergers of U.S. companies with foreign firms for the purpose of operating under friendlier tax conditions. One motivation of these deals is to gain access to the trillions of dollars in corporate cash stashed overseas in avoidance of U.S. taxes that would be levied if it were brought home.

This issue won’t go away, but that doesn’t mean the political will exists to attack it in a comprehensive way. Perhaps hopefully, Forbes says if the administration indicates flexibility, “At the end of the day, by the end of 2015, we could see a very comprehensive bill on the corporate [tax] side.”