WASHINGTON – Sen. Bob Corker raised fresh questions about the GOP tax bill, throwing Tuesday's voting in doubt after critics said he and other lawmakers - and President Donald Trump - would personally benefit from a provision giving breaks for real estate holdings.
The Tennessee Republican had endorsed the bill last week in a crucial turnaround that provided momentum as GOP leaders try to ensure passage with their slim 52-48 majority. Their numbers narrowed as Sen. John McCain returned home to Arizona over the weekend as he battles brain cancer.
But after weekend reports that wealthy real estate developers like Corker would benefit from tax treatment in the final bill, the senator faced intense backlash and accusations, which he denied, that he traded his vote.
Corker - who gave his support without having read the entire bill - said he was unaware of the provision. It had been part of the House GOP bill, he said, and was included in the final version merged with the Senate.
"Beginning on page 25, line 3, there is a policy related to pass-through businesses and what is known as the alternative limitation on the deduction amount," Corker wrote Sunday in a letter to Sen. Orrin Hatch (R-Utah), the chairman of the Finance Committee.
"Because this issue has raised concerns, I would ask that that you provide an explanation of the evolution of this provision and how it made it into the final conference report. I think that because of many sensitivities, clarity on this issue is very important and hope that you will respond in an expeditious manner."
Hatch responded in a letter Monday that he was "disgusted" with reports that "distorted" the bill-writing process, denying the provision was jammed into the final bill at the last minute.
"It takes a great deal of imagination – and likely no small amount of partisanship – to argue that a provision that has been public for over a month, debated on the floor of the House of Representatives, included in a House-passed bill, and identified by (the Joint Committee on Taxation) as an issue requiring a compromise between conferees is somehow a covert and last-minute addition to the conference report," Hatch wrote.
Sen. Marco Rubio (R-FL) said Friday that he believes the recently passed GOP tax bill did too much to help the bottom line of America’s largest corporations.
“I thought we probably went too far on [helping] corporations,” the Florida Republican told the Fort Myers-based News-Press.
“By and large, you’re going to see a lot of these multinationals buy back shares to drive up the price,” Rubio continued. “Some of them will be forced, because they’re sitting on historic levels of cash, to pay out dividends to shareholders. That isn’t going to create dramatic economic growth.”
The bill passed by the Republican-controlled Congress and signed into law by President Donald Trump last week slashed the corporate tax rate from 35 to 21 percent. It also includes a number of provisions that benefit the country’s wealthiest residents rather than the middle-class Americans the GOP has insisted will benefit from the plan, including a cut to the top income tax rate and for pass-through businesses.
The bill will go into effect on Jan. 1, 2018.
Rubio told the News-Press he was unconcerned about polls showing that most Americans disapprove of the legislation, saying the media has unfairly influenced peoples’ opinions and that ultimate perception of the bill will be based on “what their paycheck is telling them.”
WASHINGTON ― The White House and congressional Republicans have sought to portray their tax plan as primarily a middle class tax cut. But lately, some of them have been admitting that big money political donors and wealthy CEOs, two groups that overlap heavily, are the ones who care about it the most.
“The most excited group out there are big CEOs, about our tax plan,” Gary Cohn, the leading White House economic adviser and former chief operating officer at Goldman Sachs, said in an interview with CNBC on Thursday.
Cohn’s statement is no doubt true ― it just isn’t exactly the message Republicans want to send as they argue that their bill isn’t just a sop for the rich and powerful. But over the past few weeks, several Republicans have indicated that the tax bill would boost the wealth of the already rich and ensure that their political donations keep flowing to help the GOP hold power in 2018.
“My donors are basically saying, ‘Get it done or don’t ever call me again,’” Rep. Chris Collins (R-N.Y.), himself a millionaire, said on Tuesday.
Sen. Lindsey Graham (R-S.C.) told reporters on Thursday that a failure to pass tax reform would fracture the Republican Party and lead to more far-right wing primary challengers. “The financial contributions will stop,” he added.
It isn’t often that politicians admit that their failure to pass legislation will impact their ability to collect money for their campaigns. They usually try to avoid an appearance that campaign contributions are linked to specific legislation.
Lawmakers aren’t the only ones talking about the connection between legislation and campaign money. Conservative donors and those running the political groups that help elect Republicans have issued similar dire warnings.
“(Donors) would be mortified if we didn’t live up to what we’ve committed to on tax reform,” Steven Law, the head of Senate Leadership Fund, a super PAC affiliated with Senate Majority Leader Mitch McConnell (R-Ky.), told the New York Post.
Those big donors are already trying to push the tax cut legislation across the finish line by spending tens of millions of dollars on political advertising. Nonprofit groups that do not disclose their donors, like 45Committee, American Action Network, America First, Americans for Prosperity, and Freedom Partners, plan to spend at least $43 million on a campaign to pressure specific members of Congress to pass the bill, according to the The Wall Street Journal.
45Committee was founded by Sheldon Adelson, the billionaire casino oligarch, and Joe Ricketts, the billionaire owner of the Chicago Cubs who recently shuttered multiple news organizations he ran after the workers voted to unionize.
Billionaire brothers Charles and David Koch run Americans for Prosperity and Freedom Partners, which are funded by a network of multi-millionaires and billionaires from across the country. American Action Network’s board of directors includes lobbyists and strategic advisers to lobbying firms hired to influence the tax legislation.
Academic studies have shown that the wealthy have both an inordinate amount of influence over policy while holding dramatically different policy priorities than the rest of the population. Cohn and Republican lawmakers’ remarks make that clear ― and happen to play directly into congressional Democrats’ line of attack against the tax cut bill.
“Their pay masters, if you will ― the hard, hard right ... the Koch brothers ― all they want to do is cut taxes,” Senate Minority Leader Chuck Schumer (D-N.Y.) told HuffPost on Tuesday. “They don’t care about the deficit, they don’t care about the country, they don’t care about the middle class ― they just want their taxes reduced. And they run the Republican Party.”
Sen. Elizabeth Warren (D-Mass.) made the same argument in an op-ed for The Washington Post: “The Republican leadership has outsourced its economic agenda to a handful of billionaires and corporate donors.”
“Representative Chris Collins confessed that donors are telling him to cut their taxes ‘or don’t ever call again,’” Sen. Brian Schatz (D-Hawaii) tweeted. “That’s why this bill raises taxes on middle-class families.”
Republicans’ series of telling gaffes confirming Democratic Party critiques of their agenda wouldn’t be complete without one from President Donald Trump.
In a phone call urging Democrats to support the bill, the president ― a billionaire and former political donor himself ― reportedly told them, “My accountant called me and said, ‘You’re going to get killed in this bill’” if it doesn’t include an estate tax cut.
The head of a conservative Republican faction in the U.S. Congress, who voted this month for a huge expansion of the national debt to pay for tax cuts, called himself a "fiscal conservative" on Sunday and urged budget restraint in 2018.
In keeping with a sharp pivot under way among Republicans, U.S. Representative Mark Meadows, speaking on CBS' "Face the Nation," drew a hard line on federal spending, which lawmakers are bracing to do battle over in January.
When they return from the holidays on Wednesday, lawmakers will begin trying to pass a federal budget in a fight likely to be linked to other issues, such as immigration policy, even as the November congressional election campaigns approach in which Republicans will seek to keep control of Congress.
President Donald Trump and his Republicans want a big budget increase in military spending, while Democrats also want proportional increases for non-defense "discretionary" spending on programs that support education, scientific research, infrastructure, public health and environmental protection.
"The (Trump) administration has already been willing to say: 'We're going to increase non-defense discretionary spending ... by about 7 percent,'" Meadows, chairman of the small but influential House Freedom Caucus, said on the program.
"Now, Democrats are saying that's not enough, we need to give the government a pay raise of 10 to 11 percent. For a fiscal conservative, I don't see where the rationale is. ... Eventually you run out of other people's money," he said.
Meadows was among Republicans who voted in late December for their party's debt-financed tax overhaul, which is expected to balloon the federal budget deficit and add about $1.5 trillion over 10 years to the $20 trillion national debt.
"It's interesting to hear Mark talk about fiscal responsibility," Democratic U.S. Representative Joseph Crowley said on CBS.
Crowley said the Republican tax bill would require the United States to borrow $1.5 trillion, to be paid off by future generations, to finance tax cuts for corporations and the rich.
"This is one of the least ... fiscally responsible bills we've ever seen passed in the history of the House of Representatives. I think we're going to be paying for this for many, many years to come," Crowley said.
Republicans insist the tax package, the biggest U.S. tax overhaul in more than 30 years, will boost the economy and job growth.
House Speaker Paul Ryan, who also supported the tax bill, recently went further than Meadows, making clear in a radio interview that welfare or "entitlement reform," as the party often calls it, would be a top Republican priority in 2018.
In Republican parlance, "entitlement" programs mean food stamps, housing assistance, Medicare and Medicaid health insurance for the elderly, poor and disabled, as well as other programs created by Washington to assist the needy.
Democrats seized on Ryan's early December remarks, saying they showed Republicans would try to pay for their tax overhaul by seeking spending cuts for social programs.
He's playing his base for the coming elections.
It has taken decades, but it appears that anti-government crusader Grover Norquist’s dream of cutting the government down to a size he can drown in a bathtub is on the verge of becoming reality. No doubt 2018 will go down as a watershed year for Republicans who finally have the authority to at least begin achieving one of the conservative movement’s raison d'être.
It has been the Republican Party’s wet dream to “devolve government to the local level” since FDR and the 1930’s New Deal and they took a giant step towards that goal with a massive gift to corporations and the wealthy who own them. In case there is any confusion, “devolve government to the local level” means abolishing the federal government in its entirety - including all agencies, acts of Congress, departments and programs created for “the general welfare” of the people.
Many Americans are either too stupid or have not been paying attention to the ulterior motive behind the GOP’s “monumental tax scam;” it goes beyond forcing the majority of population to fund corporate and religious entitlements or transferring the U.S. treasury to the oligarchs funding the Republican movement. Although those are crucial to the Republicans’ and Trump’s plan to make America great for the wealthy, they are not the only goal.
The larger goal is what Trump’s chief advisor Steve Bannon described as “deconstructing the administrative state.” Since Trump, the Kochs, and congressional Republicans are prohibited from issuing an edict abolishing all federal agencies, acts, departments and established laws, they will “defund the administrative state” instead.
Republicans will still collect taxes from working class Americans, but instead of funding federal agencies that serve the people, they will give those tax dollars to corporations and religious groups in the form of entitlements. When tax revenue stops covering entitlements for the rich and the religious, Republicans will “defund the administrative state” with extreme prejudice; that will be a major Republican goal in 2018.
Bloomberg reported yesterday that former Treasury Secretary Jacob J. Lew said that Trump and congressional Republicans’ decision to add significant debt in the form of tax cuts for the rich is leaving the country broke. Mr. Lew said in a Bloomberg Radio interview that:
“It’s a ticking time bomb in terms of the debt. You cannot run a fiscal policy by spending trillions of dollars you don’t have at a time that the economy is doing well.”
Mr. Lew thinks that because Republicans created tax reform for the rich and corporations without Democrats’ input, it will be difficult for “the administration” to convince Republicans to fund any “basic functions of government.” For dog’s sake, Mr. Lew is smart enough to know “the administration” could not possibly care less about “a functioning government, deficit or debt, or whether children get thrown off healthcare;” Trump cares about Trump.
It isn’t clear which “administration” Mr. Lew was referring, but it was not Trump or any of his conservative cronies. It is no secret that Republicans pledged to the Koch brothers two years ago that when they controlled Washington they would “go after the federal government, all of it,” and “the administration” has done its part to begin the purge. At least Lew has been paying attention to congressional Republicans’ own statements about where they intend to start deconstructing the government and who they intend to hurt in the process. He said:
“The next shoe to drop is going to be an attack on the most vulnerable in our society. How are we going to pay for the deficit caused by the tax cut? We are going to see proposals to cut health insurance for poor people, to take basic food support away from poor people, to attack Medicare and Social Security. One could not have made up a more cynical strategy.”
The strategy was “made up” at least a couple of decades ago and of course, it is “cynical” by design. It is a conservative strategy that involves abolishing every last element of the New Deal and any federal program since leading up to today. The tax reform is vicious in enriching the already wealthy, but it is the permanent corporate tax cuts that will be the end of “basic government functions.” Remember, the corporate tax cuts are forever and they will allow a greater number of the biggest corporations in America to avoid paying taxes forever — by design.
John Cassady at the New Yorker fairly summed up what is going to happen. After noting the “tax reform” is already going to bring in much less revenue, he concurred with other experts that it is not only “unworkable,” it has already “launched an avalanche of new loopholes to exploit.” He explained:
“What isn’t yet fully appreciated is how porous and potentially unstable the rest of the tax code will be. With a corporate rate of just 20 percent, and a big new break for proprietors of unincorporated businesses and certain types of partnerships, the new code will contain enormous incentives for tax-driven restructurings, creative accounting, and outright fraud.”
Mr. Cassady said “these contortions” are designed to undercut federal revenues, which he acknowledges many Republicans welcome as an easy means of shrinking the federal government.
“The shortfall in tax revenues could be enormous. That is what Republicans want to happen. There are some in the Party who would like to see the tax base decimated, the I.R.S. crippled, and the federal government forced to slash spending on domestic programs, particularly entitlement programs. Nevertheless, for anybody who believes in a properly functioning government, a rational, clearly defined tax system is essential. The Republican reform doesn’t meet that standard.”
As one or two Americans might be aware, the concept of a “properly functioning government” is anathema to Republicans. Their idea of a functioning government is one that takes assets from the masses to fund “the security state, the religious state, the military state, and the corporate state.”
As this author has noted for a few years now, if any American wants a preview of how this “dismantling of the administrative state” plays out and the deleterious effects it will have on the people they can look at what happened in Kansas. Republicans gave massive tax gifts to the rich and corporations and raped the state government in the process by design. In fact, one Kansas Republican appealed to congressional Republicans barely two months ago and warned them to avoid Kansas’ tax cut disaster. However, true to his word to Kansas Governor Sam Brownback, Mitch McConnell and Republicans are “doing the exact same thing to the federal government” that Brownback did to Kansas because they control Washington.
It is an unpleasant fact that most Americans have no awareness that their government is under assault from the people they elected to “govern” on their behalf. It is a bigger travesty that many Americans are unaware exactly what their federal government does; Americans are inherently ignorant. But they will get a clue when their workplace protections, safe transportation, clean air and water standards, safe medicine, equal rights protections, education, healthcare, and national parks are abolished under the guise of reducing the deficit to pay for corporate tax cuts. It is what Republicans are celebrating will be a very Happy New Year.
President Joe Biden has a message for new House Speaker Kevin McCarthy the day before a meeting between the two to discuss how to avoid a catastrophic default on the U.S. debt.
There really is no negotiating on raising the debt ceiling. Also, what the GOP is talking about would only make things worse.
A memo the White House released Tuesday morning says Biden will have two questions for McCarthy, a California Republican whose caucus is threatening to refuse to increase the debt ceiling without give-backs on the budget.
First, Biden will seek a commitment from McCarthy that he will ensure the country will pay its already-incurred debt, National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young said in the memo.
Secondly, Biden wants to know when Republicans will release their budget, which would show what programs the new House majority would cut to reduce the deficit and the debt.
"The United States must never default on its financial obligations. Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos," Deese and Young wrote in the memo previewing the Wednesday meeting, the first one-on-one Biden will have with McCarthy since the tumultuous vote for speaker earlier this month.
McCarthy issued a terse response on Twitter.
“Mr. President: I received your staff’s memo. I’m not interested in political games,” the speaker tweeted. “I’m coming to negotiate for the American people.”
The memo reflects the increasingly stark comparisons with Republicans Biden has been making ahead of his State of the Union next Tuesday and his expected announcement that he will seek a second term as president.
While attacking Republicans for threatening to cut such popular programs as Social Security and Medicare, Biden has been touting his record as president, including passage of a bipartisan infrastructure law. The president will be in New York City Tuesday afternoon to promote the $292 million the law is providing for the Hudson Tunnel Project, which is projected to create 77,000 jobs.
The debt ceiling, once a pro forma vote, has become a vehicle for Republicans to demand cuts in the budget. Their argument is that if the country continues to spend on credit, the deficit and debt will only get worse, weakening the economy.
However, increasing the debt ceiling does not authorize any new spending; it merely ensures that the country has the ability to pay bills it has already run up because of spending Congress has already approved. Failure to raise the debt ceiling before the country actually runs out of money would result in massive job losses, an expensive decline in the country's credit rating and other severe fiscal damage, economists warn.
The memo noted that Republicans did not object to increases in the debt ceiling when Donald Trump was president, and that "Speaker McCarthy’s unwillingness to-date to taking the threat of default off the table makes him an outlier, including among current and former leaders of his own party." Senate Republican Leader Mitch McConnell, Kentucky Republican, for example, has said repeatedly that America must never default on its debt.
McCarthy has said publicly that the United States must not default on its debt. But both the speaker and the president must contend with a determined contingent within the Republican caucus that is adamant about getting budget cuts before agreeing to raise the debt ceiling. That same group nearly deprived McCarthy of his speakership, and under new House rules, a single member could force a "no-confidence" vote on McCarthy, imperiling his leadership post yet again.
Biden is scheduled to release his budget March 9. While the GOP has not said when it will offer its budget, legislation the House Republicans have proposed or already approved would actually increase the deficit by hundreds of billions of dollars over the next decade, the memo said. Those items include rescinding funding for the IRS, extending the Trump-era tax cuts and repealing Inflation Reduction Act provisions allowing for Medicare negotiations on certain drug prices and imposing a 15% minimum tax on high-earning corporations.