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Image: US President Donald J. Trump departs the White House

The GOP tax plan passed despite Trump's 'leadership,' not because of it

12/21/17 08:00AM

At a White House event yesterday, Republicans gathered on the South Lawn to pat themselves on the back. They'd just passed a regressive and unpopular tax plan -- their first meaningful legislative accomplishment of 2017 -- and GOP officials were eager to celebrate.

But first, they had to offer gushing praise to Donald Trump.

House Speaker Paul Ryan (R-Wis.), for example, thanked Trump for his "exquisite presidential leadership." Sen. Orrin Hatch (R-Utah) soon added, "You're one heck of a leader." Vice President Mike Pence gushed to the president, "Thank you for your leadership."

But in practical terms, what does that mean, exactly? I realize that in any political achievement, a president will claim credit when something goes his or her way, but when it came to passing the Republican tax plan for the wealthy, what is it that Trump did to help make this happen?

The Washington Post published a fascinating piece overnight that shed light on the president's role in the process.

In the debate over the just-approved tax overhaul bill, President Trump saw himself primarily as the marketer in chief -- focused on pressuring Republicans to drop the jargon and sell the legislation in a way the public would understand.

So, for example, it was Trump who told Republicans to steer clear of the phrase "tax reform," because he considered it vague. The president rejected the idea of a border adjustment tax -- which was once a key component of the plan -- because he thought the name sounded funny. (The Post  reported, "It is one reason the plan was scuttled, senior congressional leadership aides said.")

According to one senior GOP aide involved in the negotiations, when it came time to set tax rates under the party's plan, Trump "always wanted the individual rates to be multiples of 5," not for any substantive reason, but because the president simply thought those numbers sounded nicer.

At one point, Trump declared, for example, in reference to the corporate tax rate, "Twenty is a pretty number."

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Wednesday's Mini-Report, 12.20.17

12/20/17 05:30PM

Today's edition of quick hits:

* An ostentatious victory lap for an unpopular bill: "President Donald Trump applauded Republicans for passing a sweeping tax bill Wednesday, convening lawmakers to take a victory lap on the White House lawn after touting it as a 'historic' achievement."

* Keeping the focus on CHIP: 'Gripping lumps of coal, Democratic lawmakers on Wednesday demanded Republicans act before the holidays to reauthorize coverage for millions of children in low-income families whose health insurance is at risk of running out."

* Maybe Congress should have some kind of debate about this: "The Defense Department on Wednesday acknowledged for the first time 'multiple ground operations' in Yemen, while noting that the Islamic State has doubled in size in the war-torn country, where an insurgency by Houthis rebels has allowed terrorist groups to seek haven."

* Puerto Rico: "Two U.S. Cabinet secretaries visited Puerto Rico on Tuesday and promised to speed up recovery efforts and increase federal assistance for an island struggling nearly three months after Hurricane Maria."

* Time is running out: "Congressional leaders moved toward another short-term spending stopgap Wednesday after talks aimed at passing more-ambitious legislation appeared to collapse as a government shutdown deadline approached."

* Stuff like this always makes me nervous: "President Trump threatened on Wednesday to cut off American aid to any country that votes in favor of a resolution at the United Nations General Assembly denouncing his recent decision to formally recognize Jerusalem as the capital of Israel."

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Image: Paul Ryan, Cathy McMorris Rodgers, Kevin Brady, Kevin McCarthy

Why the opposition to the Republican tax plan wasn't enough

12/20/17 01:30PM

House Republicans have wrapped up the legislative work on the party's regressive tax plan and have sent the GOP bill to Donald Trump for his signature. It's going to take some time to fully digest the real-world consequences of the biggest tax bill Americans have seen in a generation.

But beyond the substantive and policy implications, there's also the political fallout to consider. Politico had a notable piece this past weekend, before the voting began on Capitol Hill, asking why the efforts from opponents of the bill fell short.

The tax fight has all the ingredients that helped Democrats kill Obamacare repeal: party unity on Capitol Hill, energized liberal activists and legislation that polls in the toilet. But this time it doesn't appear to be enough. [...]

[T]he reasons for their likely failure are becoming clear. While stripping people of health insurance strikes at a visceral human need, a debate over taxes tends to bog down voters in wonky details. Meanwhile, Democrats struggled to break through a media environment crowded with an intensifying Russia investigation, a wave of sexual harassment scandals and a fight over young undocumented immigrants. And while liberal grass-roots activists sought to bring pressure to bear on GOP swing votes, the Republican Party held together this time, desperate for a major legislative victory after a year in total control of Washington.

The comparison between the health care fight and the tax fight are probably inevitable, and may help explain the different outcomes. Far more Americans were poised to suffer under the GOP's proposed health care changes -- and suffer more severely -- which was reflected in the intensity of the public backlash.

That said, I'm at a loss to think of something critics of the Republican tax plan could've done to derail the bill that they didn't do.

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Wednesday's Campaign Round-Up, 12.20.17

12/20/17 12:00PM

Today's installment of campaign-related news items from across the country.

* In Tennessee yesterday, a Republican won a state Senate special election by three points, which wouldn't be especially notable except this is a district Donald Trump carried last year by 46 points.

* The new NBC News//Wall Street Journal  poll shows Democrats leading Republicans on nearly every major policy area, including the economy. It's the first time in nearly five years that Dems have led on this issue.

* The same poll found just 36% of Americans say that they will "definitely" or "probably" vote for Trump if he seeks a second term in 2020. Last year, the president won about 46% of the vote, en route to losing the popular vote by nearly 3 million ballots.

* In the latest Quinnipiac poll, released yesterday, Democrats have a 15-point advantage over Republicans on the generic House ballot and a 16-point advantage over Republicans on the generic Senate ballot. Among self-identified independents, the Democratic lead is 25 points.

* With Sen. John McCain (R-Ariz.) ailing, Gov. Doug Ducey (R) told the Arizona Republic yesterday he disapproves of those individuals and their surrogates jockeying behind the scenes for a potential appointment in the event McCain is no longer able to serve. "To the politicians out there that have been openly lobbying for this position, they basically disqualified themselves for showing their true character," the governor said.

* The Colorado Democratic Party announced this week that it's changed the name of the annual Jefferson-Jackson Dinner. It will now be called the Obama Dinner. The first Obama Dinner is scheduled for February.

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Two men stand on the plaza of the U.S. Capitol Building as storm clouds fill the sky, June 13, 2013 in Washington, DC.

GOP lawmakers look past real deadlines to focus on tax cuts

12/20/17 11:20AM

Senate Majority Leader Mitch McConnell (R-Ky.) published a curious tweet on Monday, expressing support for a popular program in peril. "Congress must renew funding for the Children's Health Insurance Program so the parents of the nine million children who are covered by CHIP can know their children's health care is secure," the Republican leader wrote.

It was odd because McConnell is in a position to renew CHIP funding, but at least so far, he hasn't done much of anything to act on his concerns. If he wants the Senate to focus on the Children's Health Insurance Program, McConnell can put the issue on the front burner. He does, after all, lead the chamber. It'd be like me publishing a tweet calling for more congressional coverage on MaddowBlog -- which would be weird since I'm not a passive bystander here.

But McConnell decided that tax breaks for the wealthy and big corporations would be Congress' real priority. As the Washington Post's Catherine Rampell explained this week, that meant GOP lawmakers chose to overlook real, time-sensitive issues, including protections for Dreamers, post-hurricane aid for Puerto Rico, the stability of the health care system, funding for the government, and, of course, CHIP.

Nine million children depend on CHIP, which provides insurance to minors whose families are not quite poor enough for Medicaid but who still can't afford private insurance.

The 20-year-old program has historically received bipartisan support. But its federal funding lapsed in September and has yet to be renewed by Congress, which has been too preoccupied with cutting taxes for billionaires.

Lawmakers' inaction has left millions of children, including some in the middle of lifesaving care such as cancer treatment, in limbo. As Congress squabbles and delays, states have temporarily extended this critical program using reserve funds or money from other sources, but dollars are rapidly running out.

Republicans recognized this from the outset, but decided tax breaks for those already at the top required their immediate attention -- even if that meant ignoring meaningful deadlines.

"This was manufactured urgency," Joseph Thorndike, a tax historian and director of the Tax History Project, said yesterday. "There was nothing urgent about this at all, not even the reconciliation instructions required this kind of urgency. The urgency here was completely willful."

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People walk down Wall Street in New York City. (Photo by Spencer Platt/Getty)

Republican tax plan delivers for Wall Street's big banks

12/20/17 10:40AM

On the Senate floor last night, during the debate over the Republican tax plan, Sen. Sherrod Brown (D-Ohio) delivered remarks near the side door to the chamber, and pointed at the nearby hallway. He asked his colleagues to consider "what happened down this hall."

As the Ohio Democrat explained it, "Wall Street lobbyist after Wall Street lobbyist walked in that door and out that door.... They didn't carry bags of money themselves -- that would be uncouth -- but they sure wrote provisions in this tax bill that provide bags of money for their companies."

Brown's point has the benefit of being true. Reuters reported yesterday that banks are expected to benefit greatly from Republican changes to the tax code, and as Vox noted, one finance giant in particular is going to get an especially big boost, despite its recent controversies.

Wells Fargo in 2016 was fined $185 million for issuing millions of fake credit card accounts. In 2017, it was caught overcharging clients on currency trades and improperly charging homebuyers to lock into low mortgage rates.

And in 2018, it could be about to get the best tax deal of all the big banks.

The Republican tax bill, which seeks to lower the corporate tax rate to 21 percent from 35 percent, would lead to an average 14 percent in earnings growth for seven of America's largest banks next year, according to a Monday note from Goldman Sachs analyzing the plan's implications. (Goldman does not include itself in its analysis.) The biggest winner: Wells Fargo, which would see its earnings jump by 18 percent thanks to the GOP proposal.

Earlier this year, Donald Trump spoke at CPAC and assured conservatives, "The GOP will be, from now on, the party also of the American worker.... We will not answer to donors or lobbyists or special interests."

It was as audacious a lie as any Trump has told.

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Image: President Trump Departs White House En Route To Puerto Rico

How much will Trump personally benefit from the GOP tax cuts?

12/20/17 10:03AM

Donald Trump has already faced accusations that he's trying to personally profit from the presidency, raising all kinds of questions about corruption and government ethics. It may help explain why the White House is a little sensitive in response to questions about just how much more money Trump will have as a result of the Republican tax plan.

The president has made repeated attempts to tell the public the GOP proposal will hurt him. "This is going to cost me a fortune, this thing, believe me," Trump said in Missouri a few weeks ago. "This is not good for me.... I think my accountants are going crazy right now."

White House Press Secretary Sarah Huckabee Sanders pushed the same line yesterday. While she conceded that the president's business, which he's refused to divest from, "could benefit," Sanders claimed more than once that Trump is likely to face a tax hike.

REPORTER: The president has said that this tax bill is going to cost him 'a fortune.' It's actually not the case. How does he figure this is going to cost him a lot of money?

SANDERS: Look, we expect that it likely will -- certainly on the personal side -- could cost the president a lot of money.

When a reporter noted that the president "stands to benefit" from pass-through deductions, a top-rate tax reduction, an expanded estate-tax exception, Sanders responded by changing the subject.

Later in the same briefing, the press secretary nevertheless added that the president "will likely take a big hit" from the Republican proposal.

This is admittedly a difficult question to answer definitively because Trump World refuses to release the president's secret tax returns for reasons no one in the White House can explain. But NBC News, the Washington Post, and others have published detailed fact-check pieces in recent weeks, each of which suggest Trump is going to end up with more money in his pocket thanks to the legislation he'll soon sign.

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Virginia residents wait in line in the pre-dawn hours to vote in the Virginia primary at a historic property called the Hunter House at Nottoway Park in Vienna, Va., on March 1, 2016. (Photo by Jim Lo Scalzo/EPA)

A dramatic case study in literally one vote making a difference

12/20/17 09:20AM

Going into this year's elections in Virginia, most believed Democrats would fare well, but the idea of Republicans losing their majority in the House of Delegates seemed completely unrealistic. The GOP majority was simply too large, and the district lines were drawn in such a way as to effectively be voter-proof.

What no one saw coming was the Democratic tidal wave in the commonwealth. Going into Election Day, Republicans had 66 seats to the Dems' 34. As of yesterday, it will be 50-50 -- thanks to one race decided by one vote. The Washington Post  reported:

The balance of power in Virginia's legislature turned on a single vote in a recount Tuesday that flipped a seat in the House of Delegates from Republican to Democratic, leaving control of the lower chamber evenly split.

The outcome, which reverberated across Virginia, ends 17 years of GOP control of the House and forces Republicans into a rare episode of power sharing with Democrats that will refashion the political landscape in Richmond.

Note, the description of the race having "turned on a single vote" is quite literal. In the race for the seat for the 94th House District, Shelly Simonds (D) ended up with 11,608 votes. Her opponent, incumbent David Yancey (R), finished with 11,607 votes.

The next time you hear someone say one vote can't make a difference, keep this result in mind.

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Image: US President Donald J. Trump meets with members of the House Ways and Means Committee

Republicans ignore one of Trump's key promises on taxes

12/20/17 08:42AM

We couldn't have known it at the time, but in September 2015, three months after launching his presidential campaign, Donald Trump published a tweet that turned out to be rather important.

"The hedge fund guys (gals) have to pay higher taxes ASAP," the Republican wrote at the time. "They are paying practically nothing. We must reduce taxes for the middle class!"

Trump was referring, of course, to the carried-interest loophole, which he intended to close if elected. "The hedge fund guys are getting away with murder," he said on CBS's "Face the Nation" two months into his campaign. "They're making a tremendous amount of money. They have to pay taxes. I want to lower the rates for the middle class. The middle class is the one, they're getting absolutely destroyed. This country doesn't have -- won't have a middle class very soon."

Even after the election, Trump World paid lip service to the idea. Then-White House Chief of Staff Reince Priebus said in April that the president "wants to get rid of carried interest." As recently as late September -- not quite three months ago -- Gary Cohn, the top economic voice in Trump's White House, said the president "remains committed to ending the carried interest deduction."

And yet, here we are, watching the Republican Congress pass a tax plan that would raise taxes on much of the American middle class, while protecting "the hedge fund guys" who are, in Trump's words, "getting away with murder." Reuters reported yesterday:

[The Republican tax plan] leaves in place [the] "carried interest" loophole for private equity fund managers and some hedge fund managers, despite pledges by Republicans including President Donald Trump to close it.

It's worth emphasizing that the GOP plan tweaks the policy: "the hedge fund guys" currently have to hold assets for a year to enjoy the lower tax rate, and under the new the plan, that will be three years. The loophole itself, however, will remain part of the U.S. tax system.

And there's reason to believe some Republicans are a little embarrassed by this.

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About The Rachel Maddow Show

Launched in 2008, “The Rachel Maddow Show” follows the machinations of policy making in America, from local political activism to international diplomacy. Rachel Maddow looks past the distractions of political theater and stunts and focuses on the legislative proposals and policies that shape American life - as well as the people making and influencing those policies and their ultimate outcome, intended or otherwise.



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