Nov. 27

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New Senate: DEM 48             GOP 52

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Conyers Steps Down from House Judiciary Committee

After allegations that he fired a staffer for not having sex with him and then used government funds for hush money, Rep. John Conyers Jr. (D-MI), who is 88 and the longest-serving member of Congress, came under intense pressure to do something. Yesterday, he stepped down as the ranking member of the House Judiciary Committee, but said that he would stay in the House and fight the charges. Conyers is from one of the most Democratic districts in the country. It covers much of Detroit and its western suburbs and has a PVI of D+33. His resignation would simply lead to a new and younger Democrat in his seat.

Most Democrats just want him to go away, and fast. They know that going through a process to force him out will be long and painful. Worse yet, it will give the Republicans cover with respect to Alabama Senate candidate Roy Moore. The Republicans will say: "Yeah, sexual harassment is not good, but everybody does it." Of course, what Moore is accused of is far worse than what Conyers is accused of. Moore molested and sexually assaulted teenage girls. Conyers asked an adult staffer for sex and fired her when she refused but then gave her severance pay. He didn't sexually assault her. Nevertheless, many people don't really understand the details. All they see is that Republicans (Trump and Moore) harass women and so do Democrats (Conyers and Sen. Al Franken, DFL-MN). (V)

Now Batting: Hope Hicks

Hope Hicks has quite the resume. She graduated from college, and spent two years working for a PR firm, one of whose clients included the Trump Organization. That led to a job working for Donald Trump himself, in which capacity she earned his trust. She also learned some useful lessons, like buy a suit that fits, and don't go on the record cursing your colleagues during your first week on the job. That gives her a leg up on Sean Spicer and Anthony "Mooch" Scaramucci, and so—just seven years after collecting her diploma—she's White House communications director. It is, of course, rather odd that someone who's never worked as a journalist and never held a press briefing should hold that job, but that's the Trump White House. It is Hicks' general preference—in what is surely a reflection of her lack of seasoning—that she does not like to talk on-camera, and in fact prefers to speak anonymously and/or via e-mail.

This week, however, those dodges will not be available to her as she sits down and speaks with special counsel Robert Mueller and his team. Hicks has reportedly been preparing for this moment for months, with assistance from her lawyer, D.C. heavy hitter Robert Trout. There has been no suggestion that Hicks herself is guilty of wrongdoing, but given that she's been in the Trump family's orbit for years, it's likely she knows some useful details if wrongdoing took place. Those who know her suggest that she's clever enough not to perjure herself, especially since she's essentially an amateur going up against hardened Washington pros. "I think she's smart enough and sensible enough that she knows she'd be doing no one any favors by lying," explained one friend, "the best thing she can do for everyone is to tell the truth." Meanwhile, given the fact that the screws are being put to Michael Flynn Sr., and that Mueller has peeled away enough layers of the onion to get to Hope Hicks, it suggests that his investigation may be moving closer to the Big Fish. In any event, the Trump family now has a bit more to worry about. (Z)

Tax Bill May Still Not Have the Votes

About half a dozen Republican senators are still on the fence with respect to the tax bill, so the administration is sending out the big guns to sell it to them and to the country. The big guns are Secretary of the Treasury Steve Mnuchin and Director of the National Economic Council Gary Cohn. These may not be the ideal people to convince voters or senators that the bill is really good for the average American since both of these men are worth north of a quarter of a billion dollars.

The trouble with people like this is that they have no idea about the world that ordinary people experience. Yesterday, Cohn demonstrated this by saying that the average family will get a tax cut of $1,000, and they can use this to renovate their kitchen or buy a new car. For $1,000 you could buy a modest dishwasher and a medium-quality refrigerator, but a complete kitchen remodeling averages $22,000. As to buying a new car for $1,000, Amazon does have a nice remote-controlled Mercedes toy car for $1,050, but an actual new car will set you back $35,000 on average. Cohn's remark makes him look totally out of touch with reality. The Democrats are going to be having a field day with this.

Nevertheless, what the voters think is only slightly relevant. It's the senators who will be voting on the bill, and they know that if the bill fails, their donors will be furious, their source of funding will dry up, and the party will be in huge trouble in 2018. So, they have to get it passed, one way or another. The current approach is to try to buy off the recalcitrant senators one at a time by cranking up the sausage-making machine. Two senators, Steve Daines (R-MT) and Ron Johnson (R-WI), are unhappy that small businesses get a smaller tax cut than big ones. The leadership is dangling a plan in front of them to allow small businesses to exclude 20% of their income from taxation. Whether this will convince the senators remains to be seen since the corporate tax rate will still be much lower than that for pass-throughs.

Getting Sen. Susan Collins (R-ME) on board may require a change to allow up to $10,000 in local property taxes to be deductible. This provision was in the House bill but not the Senate bill. It would cost $100 billion over 10 years and would need to be offset somehow. But the offset might irk other senators. Threading the needle won't be easy and there isn't much time since voting on the bill is scheduled to begin tomorrow. (V)

Tax Bill May Kill a Future Infrastructure Bill

If the tax bill does manage to pass and be signed into law, it won't be an unalloyed victory for the Republicans because it will probably make an infrastructure bill next year impossible. For one thing, after adding $1.5 trillion to the deficit in the tax bill, few Republicans would be willing to spend another trillion dollars fixing roads, bridges, and airports. But maybe the states could do it? Not likely, because one financial tool the states have long used, private activity bonds, is blunted by the tax bill. Currently, states can issue bonds for public-private infrastructure projects and the interest on them is tax exempt. The tax bill ends that exemption. The reason is clear: To pass the tax bill using the Senate budget reconciliation procedure, new revenue was needed to balance the tax cuts, so many deductions and exemptions bit the dust, and this was one of them. It could be put back in the final bill, but then the money would have to be found somewhere else.

If infrastructure is not next after the tax bill is done, one way or another, what is? Nobody knows. Not even the White House staff. Politico interviewed a dozen senior White House aides and they didn't have a clue what Trump wants to focus on in 2018. Normally, it takes months for the president to gear up for a new initiative, including preparing a draft of what he wants in the bill, talking to senior members of Congress to get them on board, planning a PR campaign, thinking about funding, and much more. None of that has been done. In part it is because Trump is so disorganized that he can't plan 6 months ahead, but also because he really has no interest in policy. He latched onto health care because the Republican leadership told him they had promised this for 7 years and now had to make good on it. He got very excited about taxes because it will save him and his heirs millions, maybe billions, of dollars. But with those two almost finished, the pipeline is about to run dry. Maybe Trump will just forget legislation and spend 2018 going to rallies for House and Senate candidates he likes. (V)

Verdict: It's a Lawsuit over CFPB Leadership

When the employees of the Consumer Financial Protection Bureau (CFPB) Director arrive at work today, they're going to have difficulty figuring out who the boss is. Their former boss, Richard Cordray, declared before quitting on Friday that chief-of-staff Leandra English is the interim director. The President, Donald Trump, declared that OMB Director Mick Mulvaney is the interim director. While a high-stakes game of chicken was a possibility, English has decided to ask the courts to resolve the matter.

English's argument has several parts to it. First, that the bill creating the CFPB, 2010's Dodd-Frank act, states that the director gets to pick his assistant director, and that the assistant director assumes interim leadership if the director resigns. Beyond that, Dodd-Frank clearly establishes the CFPB as an independent agency; to have someone run the agency while still working the White House runs rather contrary to that mandate. Finally, Mulvaney has previously declared that the would like the CFPB dismantled, so he seems a particularly dubious choice.

The argument being made by English's opponents, with Sen. Tom Cotton (R-Wal-Mart) taking the lead, is that her appointment is "unconstitutional." Fortunately, there just so happens to be a copy of that document on the Internet, and in Art. II, Sec. 2 it says:

[The president] shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

Careful readers will observe that Congress is specifically empowered to vest the right to choose inferior officers—like, say, the assistant director of the CFPB—in the heads of departments—like, say, the director of the CFPB. Perhaps they do not cover the Constitution at Cotton's alma mater, Harvard Law. But inasmuch as that is exactly what Dodd-Frank does, then English would appear to have the stronger of the two arguments, and Cotton would appear to have the weaker. Of course, the courts have been known to allow politics to intrude on their rulings on occasion, so we shall have to wait and see what they come up with. (Z)

Surveillance Measure Is Up for Renewal

In 2008, Congress passed a law allowing the NSA to snoop in the emails, text messages, and phone calls of foreigners, even if they were communicating with Americans inside the U.S. The law will expire at the end of this year if it is not renewed, and there is a lot of shared opposition to renewing it and not much time left. Privacy advocates say that it is clear violation of the Fourth Amendment, which says that the government may only snoop on an American after getting a warrant from a judge, and warrants may only be issued with probable cause. The law gives the NSA the authority to snoop without getting the warrant that the Constitution mandates.

Rep. Bob Goodlatte (R-VA) has long said that a clean renewal cannot pass the House due to an unlikely coalition of Freedom Caucus members and privacy-minded Democrats. The House Judiciary Committee tried to address some of these issues with tweaks in the reauthorization bill. Rep. Jim Jordan (R-OH) was asked if the Freedom Caucus would be able to block the bill and he replied: "I doubt it." In the Senate, Sen. Dianne Feinstein (D-CA) tried to put more restrictions on the intelligence community when the renewal bill came up in her chamber, but was unable to get the votes for them. Sen. Pat Leahy (D-VT) is also trying to put restrictions on the NSA, but probably he won't succeed either. Due to the ticking clock, the 2008 law may just be reauthorized without many changes because its supporters say there is no time for debate. (V)

Hoyer: House Yes, Impeachment No

House Minority Whip Steny Hoyer (D-MD) is the second highest ranking House Democrat, behind only Minority Leader Nancy Pelosi (D-CA). Speaking to reporters this week, he shared two predictions for 2018: That the Democrats would retake the House, and that impeachment would not and should not be the first item of business if that happens.

As to the first point, Hoyer's prediction is worth taking seriously, since he's undoubtedly as dialed in as anyone, and probably has the benefit of internal polling that is not available to the general public. As to the second, the moderate Hoyer is surely sounding a warning to progressive Democrats, like billionaire Tom Steyer, who would prefer that Trump be impeached yesterday. What Hoyer undoubtedly understands is that, first of all, an impeachment proceeding that did not get some GOP votes would fail. At best it would be embarrassing to the Democrats, and at worst it would rebound on them and cause a surge in Trump's popularity. This is what happened when the Republicans impeached Bill Clinton. Further, if the blue team comes charging out of the gate with articles of impeachment, it would appear to be politically motivated (in part because it would be politically motivated). The Clinton impeachment was also politically motivated, of course, and if the Democrats respond in kind, then it would move the nation closer to a vicious cycle in which impeachment—instead of being a serious, last-ditch resort—just becomes a parliamentary trick used to hurt the opposition. The filibuster, which was once very rare, has been degraded in a similar fashion.

The only way the Democrats can plausibly move forward with impeachment proceedings is if Robert Mueller's report comes back and declares that Trump was either guilty of collaborating with the Russians, or obstructing justice, or both. With such a document in hand, the Democrats might get some GOP support, and would have political cover. There would probably still be riots in the streets, so the National Guard should be at the ready if it ever comes to that.

On the other hand, if Mueller can't find evidence that Trump colluded with the Russians and his only crime is obstruction of justice, that doesn't taint Vice President Mike Pence in any way. Given that nearly all Republican members of the House fear Trump but don't like him (to put it mildly), to them hearing "President Pence" would certainly brighten up their day. (Z)

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