Trump Signs the Tax Bill

Although he was originally planning to sign the tax bill in January, President Donald Trump changed his mind after watching newscasts on television reminding him that he promised to sign it before Christmas. So yesterday, he signed it into law. It is the most sweeping tax bill in 30 years. As he signed the bill,Trump said: "Democrats don't like tax cuts. They want to raise your taxes and spend money foolishly ... in many cases."

Trump congratulated AT&T, Comcast, Wells Fargo, and Boeing for announcing they would give their employees bonuses as a result of the huge tax cut they will get. What he didn't mention (and may not even know) is that these bonuses are small potatoes compared to what the companies will save in taxes, and all of them are trying to curry favor with his administration in hopes of getting something big from the government. AT&T wants permission to merge with Time Warner so it will have its own content to send down its wires and possibly block competing content now that net neutrality is gone. Comcast does not want the government to start investigating its merger with NBC or set conditions to it. Wells Fargo would love to get out from under the fines it was hit with when it cheated its customers. Boeing sells the Defense Dept. lots of airplanes at very high prices and would like to keep doing so in the future. Few economists expect many companies to raise wages as U.S. corporations are sitting on a $2 trillion pile of cash and could easily have done so a year ago if they wanted to. When the PR efforts die down, most of the tax cuts will benefit the wealthy in general and stockholders in particular. Very little will trickle down to the middle class.

Trump also signed a temporary funding bill, which lets the government operate until Jan. 19, when it will once again run out of money unless Congress passes a proper budget. (V)

Trump Aides Talk Him Out of Holding News Conference

Donald Trump very badly wanted to hold a (rare) news conference Friday, so he could do a little crowing about the tax bill. His aides talked him out of it. What he envisions is question after question about, "How big is this win?" and "How did you achieve such an amazing win?" and "As far as wins go, has there ever been a more bigly win than this win?" What the reporters will actually ask, however, is questions about Russiagate, and the people who will lose their insurance because of the tax bill, and how Trump himself is going to benefit enormously from the tax plan, and so forth. Even if cameras were not allowed—a dubious choice for a presidential press conference—it was likely to be a train wreck.

At the same time they are protecting him from those meanies in the Fourth Estate, however, Trump administration insiders are trying to prepare him for the bloodbath that could be coming in the midterms. In particular, evidence abounds that suburban women are abandoning the party in droves, and that they are substantively motivated by the GOP's and Trump's support for Roy Moore. The goal of RNC chair Ronna Romney McDaniel, along with the GOP leaders of Congress and others, is to get Trump to stop saying things that aggravate women, to get him to say some things that will actually please suburbanite voters, and to persuade him that he needs to be very, very selective about where he campaigns in 2018. Given how frequently he shoots himself in the foot, the odds that Trump follows this advice are not very good.

In a similar vein, Republican strategist Karl Rove has advised Trump to hide (not his word, but clearly his idea) in the White House in 2018 and not campaign for Republicans. Rove clearly understands that Trump is toxic and his association with Republican candidates hurts them more than it helps them, except for candidates in states or districts so red that they don't need any help. But Trump actually likes campaigning, so he will surely ignore Rove's advice.

What we have here, quite clearly, is an administration that is handling the President with kid gloves, and is maintaining a carefully cultivated bubble for him to exist in. This happens in American politics—see Richard Nixon circa 1973 or LBJ circa 1967. However, it's not very common, and it's all but unheard of 11 months into a president's term. It also does not work out too well in the long run, generally speaking. (Z)

Tax Law Could Change How Many Americans Work and Live

Provisions of the new tax law affect many aspects of people's lives and may cause them to change their behavior in numerous ways. To start with, corporations and pass-through companies get tax breaks that employees don't. As a consequence, people are going to jump through hoops to get salary income reclassified as business income. This has been widely discussed in the media. But there are many other items in the new law that will affect how people live as well.

For example, the lifetime limit on gifts plus inheritances is going up to $11 million for individuals and $22 million for couples. This is surely going to cause a flood of gift giving in the coming years, especially from wealthy parents who have already given the previous maximum to their children but who can now give additional millions tax free.

Commuting may be affected. The break that companies receive for paying for their employees' transit passes and bicycle costs is gone. Some companies may now stop paying, leading some employees to drive to work.

Love is also on the line. On the one hand, the marriage penalty for couples making less than $600,000 combined is gone, so lovebirds who avoided getting married for tax reasons can now tie the knot. Well, unless they live in high-tax states. Two single people can deduct $10,000 each in local and state taxes, but a married couple also gets only $10,000. This is a reason not to get married or maybe one to get divorced. Note, however, that the individual tax rate changes will expire at the end of 2026, so you should consider how long you plan to be married before making any hasty decisions on this front.

Speaking of divorces, starting in 2019, divorced taxpayers can not longer deduct alimony and recipients of it no longer have to report it as income. So depending on which side you are, you might want to slow down or speed up those divorce proceedings. (V)

Trump's Political Advisers Argue with Each Other

Yesterday, some of Donald Trump's political advisers gathered at the South Portico and had a tense impromptu meeting about political strategy. Among those present were Chief of Staff John Kelly, counselor Kellyanne Conway, political director Bill Stepien, digital specialist Brad Parscale, communications director Hope Hicks, and former Trump campaign manager Corey Lewandowski. Tempers flared as Lewandowski lit into the White House staffers and the RNC, saying they were not raising enough money and were not effective for what is sure to be an epic battle for the House and Senate next year. For their part, the outsiders basically told Lewandowski not to butt in and pointed out that they are the ones responsible for advising the president, not him. Trump was present, but did not take part. He just listened.

The role of the RNC also came up. Some of the White House staff said that Ronna Romney McDaniel, whom Trump recently browbeat into dropping her middle name, wasn't doing enough to defend Trump and that it needed to hire more Trump loyalists. McDaniel has argued that Trump reverses himself on a dime, making it hard to figure out how to support him. Of course, her real loyalty is to the Republican Party, and when many Republicans have already concluded that it is to their advantage to keep as much distance as possible between themselves and Trump, it is hard for her to turn the RNC into Trump's biggest fan club. (V)

Conservative Groups Are Planning Massive Marketing Effort to Sell the Tax Plan

Republicans know their tax plan is extremely unpopular. In fact it is less popular than previous tax increases. Worse yet, it is the least popular major legislation in many decades. To avoid having this bill take down the entire Republican Party in 2018, conservative groups are planning a multimillion dollar marketing campaign to convince people that they will save a lot of money on their taxes and the economy will zoom. The Koch brothers will spearhead the effort, with TV ads and town halls to "educate" voters.

It will be a steep hill to climb. To start with, most people already think that the plan mostly helps the rich. It won't be easy to dispel that impression, in large part because it is true. The advertising blitz will tell people to look at their paychecks in February and note the increased take-home pay. The fact that mortgage interest and state and local tax deductions will be reduced is not likely to be part of the message. Nor will the fact that rich people and corporations will get far more than average Americans.

The Koch brothers' network, which has already spent $15 million pushing the plan before it was even passed, is going to run town halls with economists, accountants, and members of Congress to explain the benefits (but obviously not the downsides). Another effort will be digital ads on websites popular with young men who make less than $50,000 per year, reminding them that they will no longer have to buy health insurance.

Will it work? Democrats think not. Ezra Levin, co-executive director of Indivisible, said: "I think they are going to spend millions of dollars trying to put lipstick on this pig, But unfortunately there's nothing they can do to change it from being a pig." (V)

Ethics Case Against Trump Thrown Out

Assisted by the Citizens for Responsibility and Ethics in Washington (CREW), a group of disparate individuals and businesses—some restaurateurs, a hotel owner, and a few others—filed suit against Donald Trump for violating the Constitution's emoluments clause. Their argument is that, as both president and owner of a vast business empire, he is gaining unfair competitive advantage, and that is against the law.

From a legal standpoint, the case has a pretty obvious weakness (or maybe two). The emoluments clause specifically relates to foreign governments, and how they might use gifts or other concessions to gain special favor with the president. It is not easy to prove that this is taking place, and, more importantly, that the plaintiffs are suffering direct injury as a result. Consequently, U.S. District Court Judge George Daniels, a Bill Clinton appointee, tossed the suit, finding—very predictably—that CREW et al. did not have standing to sue. In his words:

As the only political branch with the power to consent to violations of the Foreign Emoluments Clause, Congress is the appropriate body to determine whether, and to what extent, Defendant's conduct unlawfully infringes on that power. If Congress determines that an infringement has occurred, it is up to Congress to decide whether to challenge or acquiesce to Defendant's conduct. As such, this case presents a non-justiciable political question.

CREW says that they will appeal. However, unless they can find a more friendly judge than a Democratic appointee who sits in Manhattan, then it will be up to Congress to enforce the emoluments clause. Pro tip: Don't hold your breath. (Z)

More People Approve of Mueller than Disapprove

A CNN/SSRS poll shows that 47% of Americans approve of the way special counsel Robert Mueller is handling the probe of Russia's interference in the 2016 election while 34% disapprove. Fully 19% can't make up their minds. For months, conservative news outlets have been pounding Mueller as being biased and on a witch hunt. Most likely, absent all these efforts, Mueller's numbers would have been better. Donald Trump's numbers on the investigation are worse, with only 32% approving of how he is dealing with it and 56% disapproving of how he is dealing with it. Finally, 61% of adults say the matter is serious and should be investigated while 34% say it is a mainly an effort to discredit Trump.

From the crosstabs, we see the usual pattern on whether people approve of Trump's handling of the matter. Trump's approval is 32% among white college graduates, 30% among women, 24% among 18-34 year-olds, 18% among nonwhites, and 12% among Democrats. Trump does best with people making $50K or more (37%), 65 plussers (38%), white noncollege graduates (43%), and Republicans (63%). (V)

Polling, Trump Style

Pollsters have long understood that the way in which you ask questions can profoundly influence the results of a poll. The folks who run the Trump Make America Great Again PAC apparently realize that, too. In a fundraising blast on Friday, they included a highly-scientific poll that begins thusly:

If one is sending out a poll to one's rabid supporters, one wouldn't think that one would need to cook the books. Still, The Donald will undoubtedly be delighted to hear that he got fewer "poor" ratings than his predecessor. (Z)

California Will Be Ground Zero for House Battles in 2018

California is a blue, high-tax state. The new tax, which limits deductions for state and local taxes to $10,000 is not going to be popular there, and Repubicans who voted for it are going to have trouble explaining it to their constituents. Eleven California Republicans voted "yes" on the final tax bill and some of them are going to be intensely targeted by Democrats in 2018. Here is the list of California Republicans who voted for the final bill, along with the PVI of their district:

District	Representative	PVI
CA-21	David Valadao	D+5
CA-10	Jeff Denham	Even
CA-25	Steve Knight	Even
CA-39	Ed Royce	Even
CA-45	Mimi Walters	R+3
CA-22	Devin Nunes	R+8
CA-08	Paul Cook	R+9
CA-42	Ken Calvert	R+9
CA-50	Duncan Hunter	R+11
CA-23	Kevin McCarthy	R+14
CA-01	Doug LaMalfa	R+17

Clearly the top five on the list are going to be in deep trouble. Democrats need to flip 24 seats to take control of the House, and if they can win these five, they need only 19 more somewhere. Actually, part of the "somewhere" may be in California. Two California Republicans in swing districts, Darrell Issa and Dana Rohrabacher, voted against the bill, but that may not be enough to protect them from the wrath of angry voters whose taxes have gone up. Their districts are R+1 and R+4, respectively. (V)

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---The Votemaster and Zenger