for the week ending November 17, 2017
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In order to pass the tax bill through Senate without Democrat votes the bill, under Budget resolution rules, must not increase the deficit more than $1.5 trillion over ten years. As a result of that requirement Senators face a ‘dialing for dollars’ situation where some provisions (not allowing deductions for state and local property, and sales taxes, for example) have met resistance from states that would suffer more than others. House and Senate tax-writers then have looked for other ways to reduce the 10 year cost of the bill.
One such way now reported as part of the Senate bill is to repeal the individual mandate under the Affordable Care Act. (See ObamaCare below)
But just passing a budget resolution that says you can increase the deficit by $1.5 trillion as the tax bills promise isn’t that cut and dried. We are still living under the Sequester which means that unless the bills come to the Senate floor with a rule waiving the statutory pay-as-you-go requirement the Sequester must kick in and would make significant cuts to several mandatory programs that are not protected from those cuts. Those programs, including Medicare, are mostly social safety net programs.
Once again Republican congressional leadership is targeting the individual mandate, the provision in the law that requires everyone to buy health insurance, for repeal in the Senate tax bill projected to be on the Senate floor the week after the Thanksgiving break. CBO has calculated that repealing the individual mandate would reduce the deficit $338 billion between 2018 and 2027 and reduce those covered by 4 million. There are other considerations of a negative nature CBO discussed but noted that it is difficult to determine some of the potential outcomes of repealing the mandate at this time.
The Senate bill must not raise the deficit over $1.5 trillion if he bill is considered under reconciliation that only requires 51 votes to pass. The only alternative is to try to pass the bill under regular order but that would require 60 votes to pass and those votes are not available because Democrats would not support the bill. Capturing the $338 billion would go a long way to allow the Senate to be more generous with tax cuts or to preserve much loved deductions. Leadership at this time holds that the additional $338 billion would be applied to middleclass tax cuts raising the obvious question; The money that individuals pay for the required insurance or the fines they pay to not have insurance is in the ACA law to offset the higher costs insurers pay to cover preexisting conditions and other more expensive coverage. Without that income insurers would have no choice but to raise rates. (CBO calculates premium hikes of 10% each year over the ten year cycle of the tax bill.) The Senate bill also holds that those who no longer have to pay out for the mandated coverage will have that money to spend and so the economy will benefit.
Those investigations –
Two big deals this week; Attorney General Jeff Sessions again appeared before Congress at the House Judiciary Committee hearing at which he asserted he has done his best to answer questions from Congress and has not tried to deceive Congress. Sessions affirmed that there was a meeting of Trump foreign policy advisors (volunteers) attended by him, Trump, George Papadopoulos and others at which Papadopoulos said he could arrange for a meeting between Trump and Russian President Vladimir Putin. Sessions testified that he responded to Papadopoulos that he was not authorized to arrange such a meeting and should not.
Sessions was pressed, not surprisingly by the Judiciary Committee Chair Bob Goodlatte and other Republicans that the Justice Department should be investigating something called Uranium 1, a loosely outlined Uranium deal, and the missing Clinton emails. Sessions was clear that he has not initiated such investigations but noted he is currently investigating 27 leaks of classified information potentially by Democrats.
While the Mueller Special Counsel investigations remains under tight wraps it appears as though the Manafort / Gates investigation has mostly to do with those two men laundering money from Russia and the Flynn investigation appears to be mostly about his relationships for profit with Turkey and the allegation that he was or was to be paid to return a Turkish official who is living in the US under US protection.
The Atlantic magazine recently reported interesting exchanges between Donald Trump Jr. and Julian Assange, the WikiLeaks head now holed up in the Ecuadorian embassy in London. The exchanges were telling as Assange often tweeted suggestions on how to make Wikileaks look to be not just targeting Clinton through the release of DNC emails stolen by Russian hackers. Trump Jr. did not take him up on that but the exchanges continued through the campaign and after Trump took office.
Finally, the Senate Judiciary Committee is requesting emails regarding Russia and Wikileaks that, the Committee holds, were not provided by Trump son-in-law advisor Jarod Kushner when asked for that data.
The Tax Reform / Cut Plans –
Before wading into what is in the legislation we take a look at where the tax money is coming from.
CBO concluded in its November 2017 baseline that individual income taxes produce $1.6 trillion and individual payroll taxes produce $1.2 trillion totaling $2.9 trillion from individuals. Corporate income taxes produce $310 billion. Simple math tells us that if corporate taxes are cut in half then half of the $310 billion they currently provide would also be reduced by half. Calculating how much the current individual donations would be cut is difficult because a significant number of middle class earners would see a tax cut for a year or two and then would pay tax increases while the corporate cuts appear to be permanent.
The House needed 218 votes to pass HR 1 and got them. The Senate will receive the House-passed bill, will amend it with substitute text and needs fifty votes and the tiebreaker from Vice President Pence to pass the bill. The bill would then return to the House and if it is not willing to go along with the Senate the bill will go to conference which will again be voted on by both bodies before sending to Trump.
Republicans hold it is predominately a middle-class tax break bill, Democrats say it isn’t.
The bill does reduce taxes for middle income Americans earning between $50,000 to $100,000 for about two or three years after which their taxes will go up. Republicans hold that future congresses will extend the middle-income breaks as they did with the Bush tax cut package now still in existence.
The House’s own Joint Committee on Taxation affirms the concerns about future tax breaks; “In 2019, the first year of the JCT’s analysis, 58.2 percent of households would receive a meaningful tax cut, while 8.3 percent would face a hike. But those numbers start to look worse in future years, thanks in part to the expiration of a key credit for families and changes to how the tax code is adjusted for inflation. By 2027, fewer than half of Americans would have a tax cut worth $100 or more, while about 1 in 5 would receive a hike that large, compared with current law.”
Sexual Harassment –
The saga of Judge Roy Moore, the Republican candidate aiming to capture the Senate seat vacated by now Attorney General Jeff Sessions continues with as many as 8 women coming forth to assert that Moore either sexually assaulted or mad improper advances when they were in their teens (14- 18) and Moore was in his 30’s. Moore denies all claims and refuses to step down from the election coming in December. Several Republican Senators including Majority Leader Mitch McConnell have called for Moore to step down, that they believe the women accusers and are considering either trying to produce a Republican write-in candidate or refuse to seat him if he is elected to the seat.
Rep. Jackie Speier (D-CA-14) has testified that sexual harassment has always been part of being a congressional staffer and that two Senators, one Republican and one Democrat currently harass their female staff.
Finally, a Los Angeles radio host has accused Senator Al Franken (D-MN) of groping her and forcefully kissing her while they were travelling to perform for military overseas. She also produced a phot of Franken pretending to feel her breasts while she was sleeping on the plan back to the US. Franken has apologized and welcomes a Senate ethics investigation.
House Speaker Paul Ryan (R-WI) has ordered all House Male Members to take a course in sexual harassment. Several years back the issue of sexual harassment in the House was raised an Congress agreed to apply the EEO laws to its body as well but it was done in such a way that the victim was burdened with a drawn out an frustrating process of over 90 days before they can file their complaint. It was reported that in the past ten years $16 million has been paid our to harassment victims.
Hamilton on Congress
Taxes and Debt
Magic Mondays (Video)
The Senate and House are adjourned and will return to work on Monday, November 27th.
The next edition of TheWeekinCongress.com will be published Thursday evening November 30th.
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