12 Days. That’s How Long Taxpayers, Federal Agencies, Employers And Accountants Have To Absorb, Adjust To, And Implement What Trump’s Calling “The Biggest In History Tax Cut“
That’s because most of the key provisions go into effect almost immediately. The Senate’s original proposal to delay some of the biggest cuts for a year did not prevail. “There will always be bumps in implementation” one of the bill’s key negotiators told Politico.
The final tally in today’s Senate vote to approve the bill is 51-48. Simple: all Republicans “yes” (except John McCain who wasn’t there), all Democrats “no”.
In the House, a dozen Republican Representatives are expected to vote “no”, along with zero democrats.
An initial House vote (which has to be redone this morning) was 227-203 in favor of the tax bill. (And there’s no reason to expect those numbers will change). The redo the result of a few last minute changes spurred by procedural challenges from Democrat Ron Wyden and Independent Bernie Sanders which we discuss in greater detail below.
The President has a news conference scheduled for early afternoon, so everything should be wrapped up by then.
12 Republicans in the House are expected to vote against. All of them except one hailing from California, New Jersey, and New York, high tax states where their constituents are sure to be slammed by gutting state and local tax deductions. The most controversial of those “no” votes coming from House Appropriations Committee Chairman Rodney Frelinghuysen of New Jersey. He’s really between a rock and a hard place: the “no” vote puts his Chairmanship of the powerful committee at stake, while a “yes” vote would’ve been political suicide. California Republican Tom McClintock, who voted “no” for the original House bill, voted “yes” for this. He’s the only one who “flipped”.
Since the tax bill is front-loaded: most people should see their biggest reductions in the next couple of years, which then will slowly evaporate until they disappear altogether 10 years from now. Although Republicans say they intend to extend/fix that when the time comes. Corporate tax rates on the other hand, will endure.
The Washington Post suggests (as we’ve suggested for months) that passage of the bill today is just the 1st half of a long game, where the 2nd half involves using Republicans using the ballooning deficit they’ve just created as justification for slashing away at Medicare and Social Security. (Let’s see if Trump sticks to his campaign promise not to touch those things as strongly as he did moving the Israeli Embassy to Jerusalem)
Trump directed a Tweet at corporations, which reads in part: “Enjoy, and create many beautiful jobs”.
Trump’s Early Morning Tweet Focuses On Obamacare
And yes, Republicans were able to chop the provision in Obamacare that forces people to buy insurance, because that will result in fewer insurance policies the government will have to subsidize, leaving it with more money, and far more people without insurance.
This aspect of the bill is far from settled: Senate Leadership promised Maine’s Susan Collins, who voted against all Obamacare repeal bills this summer, they’d back measures to support Obamacare markets as part of a year-end spending bill if she voted for tax cuts. But Republicans in the House say they aren’t part of that deal, and have no obligation to pass it.
Last Minute Gambit By Bernie Sanders And Ron Wyden Make Tax Bill Just A Little Better
Procedurally, what the Senators from Vermont and Oregon did is create just a little bump in the road. They brought up a few things in the bill they felt didn’t meet the standards to allow passage by simple majority. And the Senate Parliamentarian agreed. Meaning if Republicans left those few things in, they’d need 60 votes, not 51–a virtual impossibility, since there are only 52 Republicans in the Senate (soon to be 51, God Bless You, Doug Jones!)
That’s forcing House Republicans to pass the bill a 2nd time today, after they had already passed it yesterday, because the Senate was forced to change it in between, and drop those few things. The House Ways and Means Committee, and most mainstream media is portraying what’s happening as the Senate throwing out a few “minor provisions”.
Which is true. Except that those “minor provisions” include Ted Cruz’ idea to allow parents to use tax free 529 education savings accounts to pay for private and religious schools and home schooling. From what we can tell, the part that covers home schooling is what had to be removed, even though its inclusion really had no financial impact on the tax bill (which is precisely the basis for Sanders and Wyden’s objections). And the new rule still could represent the first few flakes in the giant anti-public and higher education blizzard we’ve all been waiting for.
The Washington Post this morning suggest those procedural maneuvers could portend a battle to revise the bill as small errors crop up or small revisions become necessary.
Still, the two Senators did something that forced a change, that’s making the bill a tiny bit less bad, instead of resigning themselves to standing around spouting endless soundbites, which is all Democratic leadership seems to do these days.
The Tax Bill “Story Of The Day”
Today’s is from Vox. It is partly a nice, brief summary of what’s in and what’s not, but also looks at some of the more oddball aspects of the bill. Like did you know public transportation subsidies corporations might provide their employees are no longer tax deductible? (According to Vox Republican Senators argued corporations are getting their tax bills lowered enough. But of course this isn’t really a benefit for corporations, it’s a benefit for their employees…
Senate Nixes Another Trump Nominee
This time it’s New Jersey Republican Representative Scott Garrett, who’s close friends with Vice President Mike Pence. Garrett was slated to run the Export-Import Bank, even though he repeatedly said it ought to be shuttered. (Trump said so too at one point, but then changed his mind).
Earlier this week and last week, several of Trump’s nominees to federal courts were sent packing, some in publicly humiliating fashion. And this Washington Post article points out what we’ve also discussed: the Trump Administration’s emphasis on naming young Conservatives to judgeships, so they’ll be able to serve for 30 or 40 years, means lots of under-qualified people are going to be nominated. The Post story is also interesting in that it reveals the apparatus behind the nomination operation: led from the outside by the Koch and Mercer backed Federalist Society, led from the inside the White House by Chief Counsel Donald McGahn, and also with Trump taking a very hands-on role.
A Few Stories We Found Interesting, In Brief:
• We often argue that rolling back regulations can make things more complicated, not simpler. Here’s one perfect example as reported by Bloomberg: Small-scale chicken farmers are suing to have an Obama Administration rule reinstated, that Trump’s Agriculture Secretary killed. Under current law the farmers have almost no legal recourse if they believe the huge processors that hire them and supply them with chicks and feed engage in unfair business practices.
• Lots of rumors and theories, but still no indication anyone has any solid idea of what Congress is going to do to head off a government shutdown that would happen this Friday if they do nothing.
• Trump’s Chief of Staff John Kelly’s is taking the lead for the White House on legislation to fix DACA, the program that allowed undocumented immigrants who came to the U.S. as children to stay here indefinitely. After meeting with Democratic and Republican Senators who are working on a fix, Kelly said he’d soon put out a list of what Trump would like to see happen. Of course due to his prior position as Homeland Security Chief, Kelly’s very well versed in immigration matters.
• And don’t ever think your vote doesn’t count…A recount in a Virginia State Legislature election leaves the Democrat the victor by just one vote: 11,608 to 11,607. Shelly Simonds had actually been down by 10 votes after the first count. And this isn’t a tiny district either: more than 23,000 total votes were cast. Her victory has added significance: as a result of the outcome, Virginia’s House is now split 50/50.