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Republicans pass overhaul to U.S. tax code Transcript 12/20/17 The Rachel Maddow Show

Guests: Adam Schiff, Bernie Becker

Show: THE RACHEL MADDOW SHOW Date: December 20, 2017 Guest: Adam Schiff, Bernie Becker

ANNA GALLAND: -- value-centered, fighty opposition and one of the biggest fights of that moment where they have a chance to show what they stand for, not just what they stand against, is to fight for DREAMers, to use leverage that they had at end of the year, to stand for DREAMers. You know, it`s two-part thing. Republicans are doing a lot of damage to themselves but Democrats have to help themselves too.

CHRIS HAYES, MSNBC HOST, ALL IN: Anna Galland and Cornell Belcher, thanks for making time.

That is "ALL IN" for this evening.


Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thank you my friend. Much appreciated.

And thanks to you at home for joining us this hour buckle up tons of news unfolding tonight, big news in Washington today of course was the Republicans celebrating the passage of the only significant legislation they have passed since they took control of the House and the Senate and the White House back in January. This is the only major legislation they have passed, but it is a doozy. You know the top-line results already.

This tax bill will add a trillion and a half dollars to the debt. It will deliver over 80 percent of its tax benefits to the wealthiest 1 percent of the country. In the end, it actually raises taxes on a majority of Americans starting at the bottom of the income spectrum.

We knew all that going into last night`s dead of night party line votes, but now that we`ve actually passed the thing, some of what`s about to happen here is coming into very sharp relief. For example, the nation`s seven largest banks are about to get a huge windfall. Goldman Sachs is now forecasting that on average the seven largest banks in America will increase their earnings, thanks to this bill, by 14 percent.

And when you are a multi-billion dollar enterprise, 14 percent is a metric freak ton of money for a variety of reasons known only to the Republicans who wrote this bill in the comfort of the cloakroom with consultations only from their very closest best friends, the bank Wells Fargo is expected to make out even better than all of the other largest banks in the country. Wells made itself famous this past year for their stock scheme where their executives tried to rig the bank`s stock price by making it look like the bank was growing faster than it was. The scheme was that they pressure low-level employees to get customers of the bank to open multiple accounts that they didn`t want and didn`t need.

And in millions of cases, the bank opened those accounts and even opened up credit cards in their customers names without even telling them. That scheme totally messed with their customers for obvious reasons, but it worked to rig the bank stock price and so the executives with all their stock options, the executives who came up with this scheme they personally made out like bandits. They made hundreds of millions of dollars for themselves personally.

And then when they got caught, they responded by firing the lower-level employees who had carried out the scheme for them. They can thousands of their frontline low-level, lowest paid people. Now, ultimately, the Consumer Financial Protection Bureau is part of how Wells got nailed for that, and ultimately, their CEO had to resign and they had to pay gigantic fines and fees and they had to apologize.

But you know, that was then. Now, the Trump administration has taken over the Consumer Financial Protection Bureau. They`ve put it one of their own guys in charge there who says the agency should not exist.

And now, Wells is due to get one of the biggest windfalls of all out of the Republican tax bill. The other six biggest banks in the country are getting an average 14 percent increase in their earnings from this bill, Wells is due to get more like 18 percent, which is gazillions of dollars technically speaking. I mean, the big banking profits off this Republican tax bill are going to make your eyes roll back in your head.

The biggest telecom companies are also expected to get bathed in money from this bill. They`re due to get what`s being described as a, quote, enormous boost from this bill. And yes, we are owned by Comcast. Comcast said today they give lots of employees $1,000 bonus thanks to the tax bill. Wells said they`d start paying a $15 an hour minimum wage to their lowest paid employees.

You know, when companies start volunteering that they have they have come up with worthy things to do with all the money that was just dumped on them, that`s how you know, oh my god, a huge amount of money was just dumped on them.

So the effects of the tax bill started to reverberate today as the wealthiest people and the most powerful corporations in this country started almost literally scrambling to figure out how they`re going to handle all the money the Republican tax bill just gave them. So, when your family`s taxes go up because of this bill you can take comfort in knowing that that`s what you`re paying for. You`re giving telecom companies and the biggest banks in the country a really embarrassing amount of money to have to explain away.

So, we`ll be talking about that in some detail tonight. I will say though that there are a handful of immediate questions that are going to have to get answered in very short order now that this thing has passed. First of all, on health care, they really did just pass something that`s going to gut Obamacare and throw 13 million Americans off of health insurance. It`s also expected to spike everybody`s health insurance premiums by next year and next year is 11 days away.

Remember how they said they were going to repeal and replace Obamacare? They actually did repeal the core of it with this tax bill, but they replaced it with absolutely nothing. So, it`s now a very urgent question are they just going to leave it like that. Is there any plan at all for dealing with that?

Susan Collins of Maine took lots of heat for making a deal for her vote where she agreed to vote yes on this tax bill, partly in exchange for other Republicans making her some promises about things they do on health care.

Now, Senator Collins was angry. She said people were being sexist and basically condescending toward her when she was repeatedly questioned about whether or not she was really going to get what she was promised in exchange for her vote. Well, today, Senator Collins conceded that she`s not going to get those health care provisions that she was promised in exchange for her vote. She at least won`t get them anytime soon maybe she`ll get them next year. So, that`s what`s become already of the deal that she made to explain voting yes.

But on the substance of it, it also really does seem like they`re just going to blow up the healthcare system and not do anything to try to remedy what they`re doing or to try to protect people, either the people millions of Americans who are going to lose health insurance coverage or the tens of millions of Americans who are going to see their premiums go up.

I mean, not everybody made explicit deals like Susan Collins did, but if you believe that Republicans wanted to actually replace Obamacare with some other idea they had about healthcare, you were played. Their plan is to throw millions of Americans off of all health insurance and then just enjoy the view. I should also tell you that on New Year`s Day, 11 days from now 7,000 kids in Alabama are about to lose their health insurance that day, also because of Congress.

In that one state in Alabama, it`ll be 7,000 kids who get thrown off insurance and 11 days. Then by the end of January, it will be thousand kids in Alabama. Another 68,000 kids in Virginia, another 17,000 kids in Connecticut. These are all kids who have health insurance right now, because of a wildly successful, wildly popular federal program called CHIP, which covers million kids nationwide, this is how 9 million kids have health insurance.

The Republican-controlled Congress basically forgot to renew CHIP when it expired in September. They kept saying they they`ll get around to it, they`ll get around to it, but now, in 11 days, states are going to actually start cutting kids off even kids who are in the middle of like cancer treatments or other life-saving ongoing medical interventions. They`re going to be cut off their health insurance on mass.

Republicans decided to do this tax thing instead of re-upping the CHIP program, which nobody admits to being against and they`ve been putting it off and putting it off and putting it off, but it`s now been 80 days that they`ve been putting it off and we are now less than two weeks away from thousands of kids in a whole bunch of states all across the country all being taken off coverage all at once altogether for no reason.

And I`ll tell you just one other thing to keep an eye on in the wake of this massive tax bill passing, keep an eye on Puerto Rico. Puerto Rico as you know, still recovering, still trying to recover from Hurricane Maria. Thirty-five percent of the island is now heading into Christmas with still no power. You`ll remember that the hurricane hit back in September.

Today, the Army Corps said that there are some towns in Puerto Rico that they don`t expect to get any power to at all until at least May. May. That means some people some American citizens in Puerto Rico are being told to expect, yes, eight months without power minimum.

This week, the governor of Puerto Rico made news when he said he would direct an effort to reassess the death toll from Hurricane Maria on Puerto Rico. The death toll officially is still well below 100, but expert observers are starting to arrive at a more or less consensus view that the real death toll from the hurricane in Puerto Rico is probably over a thousand people.

So, things really are still an ongoing disaster for the more than three million American citizens who live in Puerto Rico. But now, in addition to all of that, thanks to what happened in Washington today, they`ve also got this tax bill sheaving them as well.

The tax bill, believe it or not, this did not get a lot of attention before it was passed, but believe it or not, the tax bill goes out of its way to change the law so that Puerto Rico specifically starts being treated as a foreign country and penalized as such for tax purposes. I mean, if Puerto Rico was a foreign country, they`d have their own president right who would have probably helped them recover from this hurricane more than the American president did, but they`ve only got the American president because they`re not their own country and now, the Trump administration is slapping them with a punitive 12-1/2 percent tax for being a foreign place which they`re not.

Now, Puerto Rico`s governor has been criticized over the last few months for being in some people`s eyes too friendly to President Trump and to the Trump administration during the storm and during the storm response. But Puerto Rico`s governor is now vowing revenge for what the tax bill does to Puerto Rico, saying what the Republicans just did to Puerto Rico in this tax bill is going to kill off any chance that Puerto Rico has of coming back after the hurricane and he`s apparently really mad about it. He says his office is starting to catalog the Diaspora of Americans of Puerto Rican origin who live all over the mainland United States, the governor says he wants to organize a revenge vote by Puerto Ricans all across America, a revenge vote against Republicans for what Republicans have done this year to Puerto Rico.

The governor says by his calculations, by his numbers, he thinks the Puerto Rican Diaspora in the United States has it within their electoral power to vote Republicans out of Congress in 14 different states. He says, watch out in Florida in particular.

The Republicans say they expect that they may have to pass a few fixes to this bill once it gets signed and put into law. There are a lot of contenders for what they should start with. So, this has been a very, very big news day. This will go down as a landmark day in the early history of the Trump administration. This is the first significant legislation they`ve passed. The thing they passed is a very big deal.

Just a few minutes, we`re going to be talking about one of the other immediate questions it raises, which is it`s almost hard to believe but this is the biggest change to the tax code in years previously when we`ve had gigantic changes to the tax code, it`s something that`s been worked on for months if not more than a year, there`s it`s always, always previously been bipartisan effort toward make big tax changes. There`s always been a big lead time in terms of getting the IRS rules into effect and getting, you know, localities lined up with what the new rules are, so these things can go into effect smoothly.

In this case, Republicans got it done in six weeks with no hearings, with no expert testimony, with no Democratic votes and with no advance planning and they now want it to go into effect less than two weeks from now, fully. That is likely impossible given that even they don`t seem to know what`s in it, but that effort to try to not just get this done fast but try to put it into effect immediately with no lead time for the first of the year for January 1st, that is going to cause some very practical chaos at every type of business in America and in every type of city and town across the country right away.

Their failure to plan for how to put this thing into effect is something I think people didn`t really want to focus on when it wasn`t clear that it would pass, but now that it has passed it`s clear that that`s going to be a real problem right away. So, we`re going to have the latest on that in just a few minutes that may end up coming one of the very big implications, immediate implications of what they`ve just done.

So, all of that unfolding today in the wake of what Republicans see as their big accomplishment.

Here`s the other thing that`s going on tonight in Washington that which I also feel like we all need to have a heads up about. Tonight, just a couple hours ago, Kyle Chaney and John Bresnahan at broke the news that there is apparently a secret working group of Republican members of Congress who have been using the documents that have been obtained by the intelligence committee, and what`s supposed to be their investigation of Russia attacking the election last year and whether the Trump campaign was in on that attack. The secret subset of Republican members of Congress has been meeting at the Capitol for weeks, they have been secretly using the material, including the classified material obtained in the Russia investigation, but they`ve been using that material for something else.

They`ve been running their own secret working group that is designed to show that the FBI is corrupt and criminal and can`t be believed when it comes to investigating the Russia scandal. Quote: A subset of Republican members of the House Intelligence Committee led by Chairman Devin Nunes of California has been quietly working parallel to the committee`s high profile inquiry into Russian meddling in the 2016 presidential election, they haven`t informed Democrats about their plans. Quote: Gathering secretly four weeks in the Capitol, the group is relying on the same documents and testimony provided by top administration officials who were grilled as part of the Intelligence Committee`s broader Russia probe.

The group hopes to build a case that senior leaders of the Justice Department and the FBI improperly and perhaps criminally mishandled the contents of a dossier that describes alleged ties between President Donald Trump and Russia. The group hopes to release a report detailing their concerns about the DOJ and the FBI. That final product could ultimately be used by Republicans to discredit special counsel Robert Mueller`s investigation or possibly even to justify his dismissal.

They`ve been secretly working on this for how long using what materials that were obtained for what purpose? I mean, this is -- this is really how it works. It would seem unlikely in the abstract but we`re seeing it happen, right? This is how it works.

People on the Fox News Channel say that Robert Mueller should be fired, and Republicans start saying, you know, Robert Mueller should be fired. Host on the Fox News Channel start saying that the FBI is a criminal investigation, FBI officials not only need to be fired, they need to be arrested and marched out in handcuffs.

And everybody laughs that the extremity of that and says what`s becoming of old Fox News, they`re getting a little loose in the gators. But then, Republicans in Washington start secretly working on a plan to accuse the FBI of criminal behavior in assessing the intelligence about connections between Donald Trump and Russia. It sounds nuts, but they really are working on it and you know I think it`s worth saying and worth like sort of remarking on humbly that we really have been seeing red flags pop all over the place about this in recent days.

I think, actually, increasingly, since Mike Flynn pled guilty and we learned he was cooperating with Mueller`s investigators two and a half weeks ago, we have seen a whole lot of red flags flying. We have seen the increasing anti-FBI, anti-Robert Mueller to a growing fever pitch in pro- Trump conservative media. We have seen it in comments from White House officials who have started to say things like the fix is in against the president when it comes to this special counsel investigation.

Frankly, we saw it last night when Republicans in the House and the Senate had spent days implying that the FBI deputy director would be or should be fired before his testimony in Congress yesterday. The Deputy Director Andrew McCabe showed up for congressional testimony behind closed doors at the House Intelligence Committee yesterday midday, and by the time we got off the air last night at 10:00 p.m., he still wasn`t out of there.

Today, we saw another flag fly when Fox News produced its exclusive story based on leaks from McCabe`s closed-door testimony that it didn`t end until 10:00 p.m., and Fox News`s story about McCabe`s testimony sneered -- just sneered throughout over how McCabe seemed friendly to the Democratic members of that committee while he was testifying, friendly.

So, there`s been these red flags flying that`s there`s something going on, right? But then we knew for sure something was going on this afternoon when Senator Mark Warner, the vice chair of the Senate Intelligence Committee got up in the Senate today and gave a major speech which sounded a major warning.


SEN. MARK WARNER (D-VA), VICE CHAIRMAN, INTELLIGENCE COMMITTEE: Over the last several weeks, a growing chorus of irresponsible and reckless voices have called for president Trump to shut down special counsel Mueller`s investigation. At first, these calls came from the fringes of our political discourse, those who would refuse to put our country in our security before base political instincts.

Earlier this year, many of my colleagues on both sides of the aisle were right to push back on these misdirected calls and urge that the special counsel be allowed to do his job without interference. However, in recent weeks, those voices seemed to be growing in stridency and in volume. Just this weekend, one major news organization suggested that special counsel Mueller could be involved in a coup against the president. One senior advisor at the White House has now outrageously alleged that the fix was in against Donald Trump from the beginning.

Beyond being irresponsible, the seemingly coordinated nature of these claims should alarm us all, particularly since in recent days, these baseless accusations have been repeated by several members of the House of Representatives. I believe it is up to every member of this institution, Republican or Democrat, to make a clear and unambiguous statement that any attempt by this president to remove special counsel Mueller from his position or to pardon key witnesses in any effort to shield them for a -- from accountability or shut down the investigation would be a gross abuse of power and a flagrant violation of executive branch`s responsibilities and authorities. These truly are red lines and simply cannot allow them to be crossed.

The FBI is responsible for determining any criminal activities related to this inquiry. As such, Mueller has already moved to indict two individuals and has negotiated two additional guilty pleas. There is an investigative path, this is an investigative path reserved solely for law enforcement and it is essential that it be permitted to go on unimpeded.

Congress must make clear to the president that firing the special counsel or interfering with his investigation by issuing pardons of essential witnesses is unacceptable and would have immediate and significant consequences. I hope my concerns are unfounded. In many ways, I hoped I would never have to have make this kind of speech, but there are troubling signs.

It is critical that all of us as elected officials and as citizens speak up against these threats now before it`s too late.


MADDOW: Why is he worried that it might soon be too late?

We don`t know why Senator Warner chose to issue this warning today in this major speech. We don`t know if something specific sparked it. We contacted Senator Warner`s office today to try to get comment from them on that, on the motivation for giving the speech now and what he means by before it`s too late. Senator Warner`s office gave us bupkis. They didn`t tell us anything, nobody ever does.

But clearly , something`s going on, something led to him led him to believe he needed to give this speech today, warning that it`s going to be too late. Tomorrow or Friday, we believe that the president`s lawyers on the Russia scandal are due to sit down with Robert Mueller and his team.

On Friday, the House Intelligence Committee is sending its staff to New York City, to interview Donald Trump`s longtime assistant from the Trump organization in New York.

Rhona Graff is reportedly willing to come to D.C. to do the interview, where members of the committee, including Democrats, could sit in on the interview. But Republicans instead are reportedly insisting on sending their staff to New York City to do the interview in New York instead. Nobody`s quite sure why.

And now we know, a subset of Republicans has been using the resources obtained by the committee`s suppose a Russian investigation including classified information to instead run a secret parallel working group that is designed to indict the FBI, literally, to claim that the FBI is a bunch of criminals. There is something going on clearly. And a lot of people involved seem to know what it is and I say that only because there are so many warning red flags flying right now, it`s starting to feel like mayday in Moscow.

Up next, we`ve got a senior Democrat who`s in a better position than any other Democrat in Washington to know what exactly might be going on here and why all of these people are sounding all of these warnings. That`s next.


MADDOW: I mentioned a moment ago this new report tonight from that there is a secret working group of Republican members of Congress who have been using documents obtained by the House Intelligence Committee`s Russia investigation to instead conduct their own secret Republicans only investigation. The secret working group is led by the House Intelligence Chairman Devin Nunes.

And the point of it according to this reporting tonight from is that these Republicans want to build a case that the Justice Department and the FBI mishandled, perhaps, criminally mishandled the Trump-Russia dossier. Reportedly, they hope to release a report soon that Republicans could use to undermine a special counsel investigation or even to get Robert Mueller fired. "Politico" reporting tonight that the top Democrat on the House Intelligence Committee had not known this was going on inside the Intel Committee using the documents that the committee obtained for its Russia investigation.

Congressman Adam Schiff telling "Politico" tonight, quote, I think what we`re seeing in our committee is an effort to attack the Department of Justice, an effort to attack the FBI, to attack Bob Mueller. It`s an effort to undermine the investigations and these institutions out of fear of what they will find to try to discredit them in advance, it`s a pernicious thing to do that will -- excuse me -- it is a precious thing to do that will ultimately inflict long-term damage on these institutions.

Joining us now is Congressman Adam Schiff, Democrat of California.

Thank you for being here tonight, sir. It`s nice to see you.


MADDOW: So, have you spoken to the Republicans on your committee, Chairman Nunes in particular, about what`s being reported here at "Politico", they`ve had this secret, parallel under the radar investigation going on for weeks apparently?

SCHIFF: I have not talked with Chairman Nunes since the article came out. But I should say this, we have -- I have been aware of a particular working group that crosses different committees that`s dedicated to doing these things, but I have certainly been aware of a couple things for a long time and these are things that we have raised the alarm bells about and I think we need to raise them even further at this point. And that is initially rather than really focus on the Russian intervention our election and the issue of the connections between the Trump campaign of the Russians, the chairman and others on the committee were focused instead on trying to build a case that the Obama administration was either illegally wiretapping the Trump administration or that they were illegally unmasking people. So, the focus was on unmasking.

Now, when they found nothing there, they moved on instead to trying to discredit Christopher Steele, to discredit the FBI, and I think we are seeing really an intensification of that effort, and I think it`s driven by the idea that if they can discredit the dossier and Christopher Steele, that somehow they can make the whole Russia investigation either go away or they can impeach the results of what Bob Mueller comes up with regardless of whether it has anything to do with the dossier.

And I will say this just to underscore what my colleague Mark Warner said. This is a real precarious moment for our democracy when you have two categories of Republican members in the Congress, one category that is basically saying and acting the part that if this investigation gets too close to threatening either the president or our majority and our chairmanships, we are prepared to burn down the house. And a second cut of Republicans who are standing mute while they do it, and that that makes it a very precarious situation.

I think these attacks on the institutions, these attacks on Bob Mueller which are completely unfounded really threatened to do incalculable and long-term damage to the whole administration of justice in this country.

MADDOW: Can I ask you just a technical question about how these things work? I know that the Intelligence Committee is a different kind of thing than the other committees in Congress. You`re allowed access to very, very sensitive, very secret information. You obviously have special procedures and even special physical facilities for being able to handle information. You work closely with the intelligence community and its various agencies and members of the intelligence committee -- being a member of the intelligent sort of comes with some extra prestige because of that, because you`re entrusted with that kind of high-level information.

Are members of the committee allowed to take materials, including the classified materials that you guys obtained for the purposes of the Russia investigation and instead secretly start using them for something else entirely that they do without informing -- informing the rest of you?

SCHIFF: Well, you certainly can`t take any classified materials outside of the SCIF, outside of the classified space, unless there are very specific procedures in place and you`re taking them to another classified setting and it`s done following very specific protocols. That just can`t be done.

You certainly can`t take classified materials from the committee and share them with members of other committees. We have to actually have a vote of whether to allow other committee members to come into our SCIF or classified space and view materials. Now, whether people on the committee that view classified information can use it for other purposes, if we`re doing an investigation and we uncover things that concern us about the performance of agencies, yes, that can be considered.

The problem here though is not that the GOP members came across information that was of concern but rather that there`s been a concerted effort from the very beginning to try to build a case any case against Mueller and the FBI in the Department of Justice. And much of our leadership unfortunately has never stopped being a surrogate for the White House. We had that problem at the very beginning of the administrative beginning of the investigation when our chairman went on that midnight run to the White House, but that problem has continued and it`s taken different forms.

After that White House incident, you then had an effort to basically focus on unmasking, and after that was unsuccessful you had an effort now to focus on discrediting the FBI and Christopher Steele and Bob Mueller.

But the constitutional crisis that can bring about is the administration is encouraged by this. If they`re watching that spectacle in the judiciary committee and listening to Republican members talk about a coup and talk about a criminal activity in the FBI, that will encourage the president to think that he can fire Mueller with impunity or perhaps even more pernicious from my point of view, fire Rod Rosenstein, put in place someone who will tell Rod to -- will tell Bob Mueller privately, you cannot look into these issues, you cannot follow the money, you cannot consider or investigate whether the Russians laundered money through the Trump Organization, guaranteed loans for the Trump Organization, you can`t look at any of those things that could provide leverage over this president by the Russians.

MADDOW: Congressman, I know time is short and the river rises. I have -- I have one last question to ask you briefly which I`m pretty sure you can`t answer but I`m going to try anyway, and it is about these reports that your committee is planning on interviewing Rhona Graff who was Donald Trump`s longtime assistant at the Trump Organization and also potentially Felix Sater, who`s a controversial figure. He`s an ex-con who was mob associated, who was also involved in the secret plan to try to build Trump Tower Moscow during the campaign.

He`s the one who said that real estate project would result in Trump being elected. It`s been reported that those interviews remain for your committee and that one or both of them may be happening in New York City instead of Washington, which I can`t figure out. Can you confirm that that`s happening and can you tell us if you know why those things are happening in New York if that is indeed the fact, if that is indeed the truth?

SCHIFF: You know, I can`t confirm as to any specific witnesses, but I can`t tell you this: there are two witnesses that are very significant that we have asked to be brought before the committee for months that the majority has refused to invite before our committee that they did schedule one of them today while we have the tax vote was scheduled to be interviewed out of state, and that interview went forward against our protest, at a time when we were here voting on the tax bill and none of the members could participate. They have a second interview they`ve also planned for out of state, another key witness we`ve asked for four months.

Why is this happening, Rachel? I think the reason is they wanted to jam these in at the end of the year, they really don`t want the members to be present to hear what these witnesses have to say, and it`s part of an effort to close this down, beginning in the new year, to go through the motions of an investigation when they`re not particularly interested in what the witnesses can contribute in terms of information on the issue of collusion, for example. They just want to shut it down and focus on discrediting Bob Mueller.

MADDOW: Congressman Adam Schiff, top Democrat in the House Intelligence Committee, thank you for your time tonight, sir. Much appreciated.

SCHIFF: Thank you.

MADDOW: All right. Lot still to get through tonight. Stay with us.


MADDOW: (AUDIO GAP) celebrated the tax bill passing today, then tonight, they had to announce that actually President Trump might not sign it until next year because oops they didn`t notice that this will start cutting Medicare right away if he signs it now. They didn`t notice that would happen before they passed it all in a rush. So, now, maybe, he can`t sign it.

Now, on top of that, tonight, there are new warnings from some unexpected sources about what else the Republicans didn`t notice before they pass this thing all in a rush, problems that might affect everybody`s paycheck in the whole country in a bad way, starting with your next check. That story is next.


MADDOW: The Republicans in the House thought they voted yesterday to pass the tax bill but it turns out they messed it up so then they had to go back and vote on it again to really pass it today. And you are forgiven if that false start own goal is starting to feel like less of a glitch in this process and more like an explanatory microcosm for what the whole thing`s been like.

This is a huge piece of legislation that will dramatically affect the American economy which is the largest economy in the world. This legislation will have at least some effect on the income and the wealth of every American. And Republicans were in a real hurry to get it done, not because there was any external deadline, any external reason why they needed it to go so fast. Honestly, I think most people would concede they were in a hurry to get it done basically so they could outrun the politics of this bill, which is wildly, wildly unpopular. It is the least popular major legislation to pass Congress in three decades.

Here`s another thing to know though: now that they`ve passed it they`re going to keep going fast with it. On practically every major piece of legislation ever passed by any modern Congress, there`s a lead-time built into it, a lead time of several months to a year from the time major legislation is passed to the time it becomes law and goes into effect. The idea is that you want to give the public and government agencies and regulators and public officials, you want to give everybody involved in the process, everybody affected by the new law a chance to get ready for a major change particularly when the change is complex.

For example, when Obamacare was signed, the full implementation of that law didn`t kick in for years. And it`s not just Obamacare. Pick any major new law on any major issue and you will find that the implementation date usually begins at least months after the final passage of the bill. That is not what they`re doing right now with this tax thing. Republicans today rushed not just to pass it, but to put it into effect. The week after next, and next week is Christmas when traditionally not a lot gets done.

Republicans are aiming for full implementation of this thing as of 12 days from now, which could lead to all sorts of unpleasant surprises for ordinary Americans who pay taxes. Quote: Payroll companies -- payroll companies are bracing for confusion as they figure out new withholding rules that will affect millions of American paychecks. The American Payroll Association sent up this morning today, saying, quote: putting something into effect a week after it`s signed, I don`t know how you can expect good results.

Now, one possibility of course is that the rushed no lead time rollout of these huge changes is that it`ll end up being a free-for-all for people who want to take advantage of the confusion and the changes and especially all the complicated new loopholes for high-end earners. For people who want to skate out on their taxes and avoid paying while everybody else is scrambling to figure out the biggest and most complicated changes to the tax code in 30 years, this rushed rollout is probably going to be a criminal blessing.

Already, we`re seeing reports of confusion in states like New York, New Jersey and Maryland, particularly hard-hit states from this bill. Confusion about whether property owners can maybe pay their next year`s property taxes right now before the end of the year, to take the resulting income tax deductions while they still can because they`re going to be sharply curtailed by this new bill. Can they do that?

What if the states want to let them do that, are they allowed to? What`s the mechanism for you paying something that`s not yet due? People are already working on that today.

Republicans slammed this bill through the legislative process with only Republican votes with no expert testimony, with no substantive hearings. But they got a gun and they`re very happy about it. Now, it`s on us. Now we all face a whole new set of questions about what comes next. We have never as a country tried to do something this big affecting this much of our economy and this many individual Americans with this little planning and zero lead time. I`m sure it`ll be fun.

Joining us now is Bernie Becker. He`s a tax reporter for

Mr. Becker, thank you very much for being here. Really appreciate it.

BERNIE BECKER, POLITICO TAX REPORTER: Hey, thanks for having me.

MADDOW: You can tell -- I know your sarcasm meter is working when I say I`m sure it`ll be fine. I don`t mean it.

As somebody who`s much better versed in tax stuff than I am, are you worried about the initial confusion about the rollout?

BECKER: Well, so I think the -- so the IRS has been upfront and saying that they`re not going to be able to have something ready by January 1st. So people can`t expect any change in their paychecks until at least February. They`ve got to figure out sort of how much to withhold from everyone`s checks. So, you know, we say January 1st is when it`s going to start.

I mean, you know, there`s going to be a lot of time for writing rules and that sort of thing, it`s going to take a while.

MADDOW: So, to be clear, just to put a finer point on that, the Republican argument for this has been -- especially in the sort of discussion about how unpopular the bill is, they`ve been saying since it became clear this thing was going to pass, don`t worry about it, the poll numbers on this will go up, people will love us for this bill when they look at their paychecks next month, when they look at their next pay stub and they see how great they`re going to do from this tax bill.

Democrats have been arguing against that saying regular people aren`t going to do great from this tax bill. But you`re saying, no matter, how you`re going to do, nothing`s going to change. In January, they`re not even going to try to put anything into effect until February?

BECKER: Right. It`s just -- I mean, it just it just takes too long to write the rules. I think what Republicans would say is that, you know, a tax cut in February is better than no tax cut at that time and so, you know, I know this bit this bill`s unpopular right now, but for them, the best chance they have is to get these tax cuts rolling as fast as they can. That`s why they put that January 1st effective date and so they want it they want that happening as soon as they possibly can.

MADDOW: In terms of the sort of warnings that we`re getting from people who administer payroll for large companies and people who are looking at that just as a big segment of how portions the American wage economy are, you know, functionally managed, I don`t envy people who are trying to figure this out on their own on behalf of a company they work for in terms of what people`s brackets are, what people`s withholding is, how those things change.

Are the basic forms that people use for signing up for employment, the basic stuff that we all fill out in terms of getting our wage income, is that -- is that all going to change? Do we know what those new forms are going to look like? Do people who do payroll know how to do this yet?

BECKER: Yes, it`s not going to be a rest of the holiday I don`t think. So, you know, that -- the form we use now isn`t going to be operational. But what we don`t know yet is what the IRS is going to do about it and how long it`s going to take them to do about it.

The tax bill -- there`s no longer personal exemptions, which is sort of how we figure out withholding. So, they could decide 2018, we`re just going to have to roll with that, figure it out how we can we`ll see if it works out OK, and then by 2019, we`ll have that into effect.

But, you know, we just passed this today, there`s no word yet on what the IRS is really going to do on that.

MADDOW: Which would make sense if they weren`t rolling it out until 2019, but since they`re trying to roll it out for 11 days from now, we`ll see.

Bernie Becker, tax reporter for, appreciate your time tonight. Thank you for being here.

BECKER: Hey, thanks for having me.

MADDOW: All right. We`ll be right back. Stay with us.


MADDOW: (AUDIO GAP) seeing this in times of crisis. It`s called a product brigade. It`s a pre-fire engine reference basically.

A fire broke out, people form a human chain between the fire and nearest water source and they pass full buckets of water all the way down the line person to person all the way from the water source down to the source of the fire.

Really, though, today you get a super happy bucket brigade, where there`s no fire, even Santa shows up. There`s good cheer and great joy over people putting out the in this case proverbial political fire that they have all assembled to fix with this happiest of all bucket brigades. This happy store is next.

Stay with us.


MADDOW: Last night, we covered that nail biter of a recount in Virginia where a Democrat won a legislature race by one single vote. It was crazy watching that recount not least because in the November elections, Virginia Democrats got more than 200,000 more votes than Virginia Republicans did on election night. Democrats got more votes than Republicans by 10 percent.

But because of the way Virginia districts are drawn to favor Republicans, that huge Democratic edge in voting statewide including that one-vote Democratic margin in the one district yesterday, that still left Democrats and Republicans tied in terms of the number of seats they each controlled in the legislature. That`s what we thought was going to happen after that one vote margin recount yesterday.

But then today, a recount official asked the three-judge panel certifying that race to reconsider one ballot. You can see a bubble filled in for the Democrat and for the Republican and then there`s an additional mark through the bubble for the Democrat. The judges said that`s a Republican ballot.

That means the Democrat doesn`t win by one vote. That means the race is a tie. Virginia Democrats say they`re exploring their legal options. Virginia Republicans say, OK, OK, it`s a tie, let`s call it a tie. And they want to settle the race by flipping a coin.

It`s a remarkable outcome, right? Considering the Democrats did get 200,000 more votes in the state for this election.

Even when Democrats win big, it`s often not enough to overcome the advantage Republicans built for Republicans when they drew the districts. This has been true in Virginia. It`s been true in states around the country.

And that`s what makes this scene potentially very important around the country. These are hundreds of people in the rain forming a human chain to move 188 boxes off that truck and up the stairs into the Michigan state bureau of elections.

These are volunteers with the group called Voters Not Politicians. They`re happy because inside those boxes are more than 400,000 signatures putting something on the ballot in November that would change the way Michigan draws its districts so they don`t be partisan anymore. Instead, it would a 13-member bipartisan commission, Republicans, Democrats and independents.

They`ve got 100,000 surplus signatures. There`s no guarantee to make it on the ballot but probably will. And if they get it on the ballot, I bet they`ll win.

What happened there in Michigan, though, this effort, citizen-led volunteer-led effort to stop making districts a partisan thing, to make it a nonpartisan, independent, technocratic thing. I think it`s going to work in Michigan. And I think that could end up blazing a trail for people in Colorado, and Missouri, and Ohio, and South Dakota and Utah, people all over the country who are trying to get on the ballot next November with initiatives that stop partisan drawing of districts.

Really, there`s not a lot of substantive work that`s done on the structural stuff that changes our politics, but that`s doable stuff and it`s starting to work.

That does it for us. We`ll see you again tomorrow.


Good evening, Lawrence.




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