Dec. 01

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New Senate: DEM 48             GOP 52

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Dem pickups: (None)
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Tax Bill Is Moving Forward

The Republican tax bill got a big boost yesterday when Sen. John McCain (R-AZ) announced that he was supporting the bill. McCain used to be a maverick. In 2001 and 2003, he voted against the Bush tax cuts because they would balloon the deficit. This bill will too, but McCain gave some vague remarks about how economic growth would ease the deficit issues, even though that was not the case after the Bush tax cuts and virtually no economist believes it will reduce the deficit this time, either. He also gave a dramatic vote against repealing the ACA last summer but even though this bill goes partway in that direction (and will cause an estimated 13 million people to drop insurance and cause premiums to zoom up for the rest), McCain is for the bill. He is suffering from an aggressive form of brain cancer and this may be his last big vote. If it is, his legacy is going to be: "Party first."

McCain apparently missed the news that the Joint Committee on Taxation, a nonpartisan body, has scored the bill and concluded that new growth will offset $400 billion of the $1.5 trillion costs over 10 years, thus increasing the deficit by over a trillion dollars. The Senate leadership pooh-poohed the JCT report and said the bill will grow the economy more than the report said it will.

Sen. Susan Collins (R-ME) is moving toward "yes" but isn't quite there yet. She said that a precondition for getting her vote is that the Senate would have to pass the Alexander-Murray bill and the Collins-Nelson bill. The former gives money to insurance companies that have a disproportionately large number of sick customers. The ACA already has a provision to do precisely that, but Donald Trump doesn't want to give them the money, so Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA) drew up a bill that would enshrine the payments in law, at least for two years.

The latter bill creates high-risk pools for sicker people and provides $4.5 billion in funding for the first two years. High-risk pools have been a Republican goal for years. The basic idea (although rarely stated so bluntly) is to have two insurance pools. The first one would be for healthy people (about 80% of the population) and would operate under market principles. The second one would be for sick people (about 20% of the population) and would be subsidized by specific appropriations. Politically, this would be a winner for Republicans because 80% of the voters, would see their premiums drop and would be very happy. In theory, if the high-risk pool were adequately funded, that would be fine, except that was never the intention. The real plan is for Congress to appropriate a specific dollar amount each year for the high-risk pool to cover all treatments for all patients. If the money runs out in, say, April, patients would be told to come back next January. Of course these people would probably not vote for Republicans (and might pretty soon stop voting at all), but if Republicans could get 80% of the votes, they would be very pleased.

But things are a bit more complicated than this because House conservatives have made it very clear they will not support Alexander-Murray. To them, this is bailing out the insurance companies. When asked about Alexander-Murray, Rep. Jim Jordan (R-OH) of the House Freedom Caucus said: "We haven't repealed Obamacare, we haven't cut taxes yet, and we haven't started construction on the border security wall like we told the voters. But before we get any of that stuff done we're going to bail out insurance companies in the spending bill?" That's a complicated way of saying "no." So if Collins insists on passing Alexander-Murray and the Freedom Caucus blocks it in the House, something has to give.

Before it can get to that point, however, the current iteration of the bill must make it through the Senate. Majority Leader Mitch McConnell (R-KY) thought he'd be able to get that done by the end of the day Thursday, but a late fly flew into the ointment. Sen. Bob Corker (R-TN) has insisted that he will not allow the deficit to grow by one penny, much less 100,000,000,000,000 pennies. To assuage him, the GOP planned to put a clause in the bill that would automatically raise taxes if the predicted economic growth does not materialize. However, around 4:30 p.m. ET, Senate parliamentarian Elizabeth MacDonough ruled that such a clause is not kosher. So, Corker's vote is now in serious doubt, and McConnell had to pause the voting process while Republicans scrambled to find another way to keep the Tennessee Senator on board. In addition, Sen. Jeff Flake (R-AZ), who, like Corker, is a free man since he is not running for reelection, is also a deficit hawk and not committed to the bill yet. As if that weren't enough, Sen. Ron Johnson (R-WI) wants bigger tax cuts for pass-through businesses, like the one he owns. McConnell's fabled legislative skills will be sorely tested today. (V & Z)

Tillerson May Be on the Way Out

The New York Times is reporting that within a few weeks Donald Trump will force out Secretary of State Rex Tillerson and replace him with CIA Director Mike Pompeo. Trump won't fire Tillerson directly since he is actually afraid to fire people in real life, but he can get Chief of Staff John Kelly to wield the hatchet when the time comes. Though the preferred option, according to late-breaking news on Thursday, is to shame the Secretary so much that he resigns.

In the course of a year, Trump has gone from liking Tillerson a lot to not liking him at all, despite Tillerson's taking a sledge hammer to the State Dept., something Trump strongly approves of. T-Rex has committed multiple sins as far as Trump is concerned. Probably the biggest one is calling him a "moron" in a private conversation that leaked out. But he has also disagreed with Trump on North Korea, Iran, Qatar, and NATO. In effect, Trump wants to be his own secretary of state.

The expectation is that when Pompeo moves over to the State Dept., Sen. Tom Cotton (R-AR) will be named the new director of the CIA. Cotton served one term in the House before getting elected to the Senate in 2014. He has no background in intelligence gathering or analysis, but Trump likes him personally and also his hard-line views on many topics, for example:

In short, Cotton is about as hard line as you can get and is a very strong Trump supporter. What's not to like here? If he is nominated and confirmed, Gov. Asa Hutchinson (R-AR) will name an interim replacement to serve until a 2018 special election to choose someone to serve out Cotton's term. (V)

How Trump Manipulates the News

Donald Trump has discovered a secret formula for manipulating the news. It works like a charm every time. Jim VandeHei, a cofounder of Axios, has uncovered the formula now. It works like this:

There is no easy way to stop this cycle since the purpose of the Twitter bombs is to get attention and keep the Trump base angry. The journalists on both sides take the bait every time, like dangling catnip in front of a cat. (V)

Trump Feuds with May, Britain

On Wednesday, Donald Trump retweeted three Islamophobic videos from a convicted British bigot named Jayda Fransen. Prime Minister Theresa May was not thrilled that Trump gave the videos or Fransen the visibility that comes with presidential attention, and issued a mild rebuke through a spokesperson. Of course, any time Trump becomes aware of criticism—no matter from whom it comes or how mild it is—he has to respond. And so:

.@Theresa_May, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine!

— Donald J. Trump (@realDonaldTrump) November 30, 2017

At this point, it is hard to imagine any circumstance under which Trump might turn the other cheek. Maybe if Ivanka took a knee during the national anthem.

In any case, the British public is not pleased, either with Trump's retweeting, or with his presumption in attacking their prime minister. Many of them don't love May, but only they get to kick her around. On Thursday, several MPs blasted The Donald in the House of Commons, and May herself said she had no regrets about her response. A sizable percentage of Britons would like to see Trump's invitation to make a state visit be rescinded; London mayor Sadiq Khan is leading the charge. That probably won't happen, simply because the UK needs the US, even if it means holding their collective noses and dealing with The Donald. On the other hand, May currently leads a fragile coalition government, and if she needs to score some brownie points with the British public, who knows what might happen? (Z)

Trump to Hold Rally that Has Nothing to Do With Moore

Donald Trump has semi-endorsed Roy Moore's bid to be the next senator from Alabama, but has said he will not campaign for the former judge. This is apparently the Trumpian version of a principled stand on the issue of child molestation.

In an unrelated piece of news, the White House announced Thursday that Trump will hold yet another campaign rally on December 8—four days before the Alabama election. And that rally will be held in Pensacola, Fla.—just 25 miles from the Alabama border. The administration will spend the next week pretending that is merely a coincidence. But given Trump's shoot-from-the-hip style at these rallies, there is little chance that he will manage to go an hour or two without mentioning Moore, and thus shooting the whole scheme in the foot. In fact, it wouldn't be entirely shocking if Moore made a "surprise" appearance. If so, that would be the most extraordinary collection of lecherous behavior that has ever been gathered together, with the possible exception of when Anthony Weiner dines alone. (Z)

Pelosi Gets Permission to Call for Conyers to Resign from the House

House Minority Leader Nancy Pelosi knows that if she calls for embattled Rep. John Conyers (D-MI) to resign, she will be in a stronger moral position to attack Republicans who have been accused of sexual harassment. The problem is that Conyers is one of the founders of the Congressional Black Caucus and if she calls him out, Conyers might call her a racist. Yesterday, Rep. James Clyburn (D-SC), the highest ranking black person in Congress, called for Conyers to resign, effectively giving Pelosi permission to call for Conyers to leave the House, something she did as well. Conyers already stepped down from the House Judiciary Committee, where he was the ranking member, but he has so far refused to consider resigning from the House. He did say, however, that he will not run for reelection in 2018.

Conyers' district has a PVI of D+33, so the Democrats could nominate a yellow dog and she would win. But only if there is an election. Michigan law states that when there is a vacancy in the U.S. House, the governor, currently Rick Snyder (R), is to call a special election. However, there is no time limit, so Snyder could simply leave the seat open until the Nov. 2018 election, at which time there would be two elections: a special election for the last 2 months of Conyers' term and a regular election for a 2-year term beginning in January 2019. This might be confusing to the voters. The Democrats might have to find a yellow dog and an orange dog to run.

So far, calls for Sen. Al Franken (DFL-MN) to resign have come mainly from Republicans, although Rep. Joe Crowley (D-NY) said it is time for Franken to go. The Senate Ethics Committee has launched an investigation into his alleged behavior. Democrats are hoping that the Committee doesn't find too much and that this blows over. The odds are growing long, however, as two more women accused Franken of inappropriate touching on Thursday, bringing the total to six.

No report on today's sexual harassment charges would be complete without mentioning Rep. Joe Barton (R-TX), who has been sending dirty pictures of himself and sexually explicit messages to a Republican activist. He is currently married to his second wife. Barton, like Conyers, has said he won't run for reelection in 2018 but that he won't resign now. (V)

Manafort Makes Bail

Former Trump campaign manager Paul Manafort has reached an agreement with prosecutors to accept liens against four properties he owns as his bail. He and his lawyers argue that the value of the residences, once mortgages are subtracted, exceeds the required $11 million.

Clearly, Manafort is badly exposed; if not, he would not be considered such a big flight risk. $11 million is a hefty amount of bail for an accused white-collar criminal. By way of comparison, ponzi schemer Bernie Madoff's bail was $10 million. In any case, it's pretty clear that Manafort won't be fleeing the country. So, if he's got dirt on Donald Trump, then there are only three options left:

  1. Manafort takes the fall for The Donald, which is unlikely
  2. Manafort makes a deal, if he hasn't already, to save his own hide
  3. Trump tries to pardon Manafort, and the move likely backfires when New York Attorney General Eric Schneiderman (D) or Virginia AG Mark Herring (D) files charges at the state level, putting the indictee beyond the reach of a presidential pardon

Put another way, fleeing the country, going to the hoosegow for Trump, and a presidential pardon are all long shots. Which means that if Manafort has the goods, he's almost certainly going to sing. It's only a matter of when. (Z)

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