Congress Passes the Tax Bill

Yesterday, the House passed a debugged version of the tax bill that it had already passed Tuesday. Donald Trump is eager to sign it. Republicans say it will create economic growth and will help the middle class. Democrats say it will not help an economy already running at full blast and it throws crumbs to the middle class while actually being a giant Christmas present to the rich and corporations. Tax experts say that rather than simplifying the tax code, as Trump promised during his campaign, it adds enormous complexity and creates a vast number of loopholes that accountants and tax lawyers are already scurrying to exploit to the hilt. Polls say that a large majority of voters believes that the bill is a giveaway to the rich and to corporations. Unless the Republicans can turn that view around, it will be a millstone around their necks in 2018. (V)

Winners and Losers from the Tax Bill

Some taxpayers will see their taxes go down and others will see them go up, depending on their individual circumstances. So, there will be winners and losers. Similarly, there are winners and losers among politicians and government officials. The Hill has a list of political winners and losers, as follows:

WINNERS

• Donald Trump: He got a major bill to sign and fulfilled a campaign promise
• Paul Ryan: Tax cuts were Ryan's signature issue for years and he pulled it off
• Kevin Brady: House Ways and Means Chairman Brady wrote the bill and got what he wanted
• Mitch McConnell: He showed that he can do more than just obstruct, he can also pass legislation
• Lisa Murkowski: She wanted to drill, baby, drill in the Artic National Wildlife Refuge and she got it
• Steve Mnuchin and Gary Cohn: They were the White House officials working on the bill and they got it

LOSERS

• Democrats: They fiercely opposed the bill, lost completely, and got nothing. But wait until next year
• Deficit hawks: The bill adds $1.4 trillion to the deficit but there was nary a peep from them
• Blue-state Republicans: They are going to have to explain to their constituents why their taxes are going up
• Bob Corker: His last-minute conversion makes him look like a hypocrite at best, and corrupt at worst
• Susan Collins: She got a basket of promises about stabilizing the ACA, but few people expect they will be kept. Even she is now admitting that if it does happen, it won't be until next year.

Of course, future developments could change many of these conclusions. If the bill does not bring economic growth and revenue projections prove way too optimistic, the budget could explode and the voters might not be happy next year. (V)

Taxpayers Won't Know How the Bill Affects Them Until after the Midterms

The new tax regime starts Jan. 1, 2018, which means that for many people, the real net effect of it won't become clear until April 2019, when they file their 2018 taxes. The withholding rates will change in January or February, depending on how fast payroll-software companies can get their programs updated. This may work for the Republicans, since many people will see more take-home pay immediately, the but reduction in deductions for state and local taxes, mortgage interest, and other items won't be obvious until April 2019.

That said, the people likely to be affected most by the new $10,000 limit on deducting state and local taxes are affluent suburban professionals with college degrees. These are precisely the people who follow the news and understand what it means for them, even if they don't have the exact numbers. Anyone who checks his or her 2016 tax return and sees a deduction for $15,000 for state and local taxes there knows there is trouble ahead, even if the exact amount is not known. These are the people the Democrats are going to be targeting hard. In many cases, these people are socially liberal, pro-choice, and support gay rights. The only thing binding them to the Republican Party has been taxes. If they are now angry with the GOP on taxes, their loyalty will be sorely tested, and the Democrats know that. (V)

Obamacare Is Not Dead and Gone

Yesterday, Donald Trump crowed at a cabinet meeting: "We have essentially repealed Obamacare." Oops. Not really. What the tax bill does is set the fine for not having health insurance to $0. An expected consequence is that as many as 13 million young invincibles who think they will never get sick may now drop their health insurance. This will result in a sicker pool of insurees, forcing the insurance companies to raise their premiums for everyone else. But it by no means eliminates the rest of the ACA law.

For example, young people up to 26 can still be on their parents' plan. Insurance companies cannot refuse to insure people with pre-existing conditions. The Medicaid expansion is still in place. The online insurance marketplace is not going away. In short, while Trump may think he has slain the dragon, he has merely cut off one of its arms. The rest is alive and still functioning. Depending on what happens with the Alexander-Murray and Nelson-Collins bills, which attempt to shore up the ACA in various financial ways, it will probably continue functioning reasonably well for a while, at least until the pendulum swings and the Democrats are back in power. At that time they may decide it is better to try for single payer than to rescue the ACA. That would mean Trump was right, but not quite the way he intended. (V)

Next Up: Big Problems

Senate Majority Leader Mitch McConnell (R-KY) and Speaker Paul Ryan (R-WI) were all smiles after passing the tax bill. Those smiles will last until tomorrow, when government funding runs out. Unfortunately for McConnell, funding bills can't use the budget reconciliation procedure, so the Democrats can filibuster the funding bill and shut down the government if they don't get major concessions.

And it is not only Democrats vs. Republicans. It is also Republicans vs. Republicans. McConnell promised Sen. Susan Collins (R-ME) that he would shepherd two bills that will stabilize the ACA through the Senate. One way to do that would be to attach them to the funding bill. That would put the House Freedom Caucus on the spot; They could either support the bill (and thus stabilize the ACA, something its members hate with a passion), or they could vote "no" and shut down the government. Another option is to kick the can down the road and fund the government until mid-January. But that doesn't solve any of the fundamental problems, of course. In fact, it makes things worse for the Republicans, because in January Senator-elect Doug Jones will become Sen. Doug Jones (D-AL), reducing the GOP caucus to 51 members, one of whom (John McCain) is very sick and recuperating in Arizona. Sen. Al Franken (DFL-MN) will leave the Senate on Jan. 2, but that will help the Republicans for only one day as his successor, Lt. Gov. Tina Smith (DFL-MN), will be sworn in the next day. In short, the euphoria over the tax bill may be short lived. (V)

Democrats Open Huge Lead on Generic Congressional Poll

A new CNN/SSRS poll shows voters prefer a generic Democrat to a generic Republican by a margin of 56% to 38%, a gap of 18-points in favor of the Democrat. This is the largest gap since CNN began polling this question more than 20 years ago. Four years ago, the generic Republican was 2 points ahead. These numbers, along with the election results in Alabama and Virginia, as well as in the Virginia House of Delegates, where the Democrats picked up 15 or 16 seats, all point in the direction of a blue wave next year. Still, caution is advised. In politics, a week is a long time. A lot can happen between now and the midterm elections. (V)

Virginia House of Delegates Race Is an Exact Tie

A recount in the Virginia House of Delegates district 94 race Tuesday gave Democrat Shelly Simonds a one vote lead over Republican David Yancey. Yesterday, a three-judge federal court gave Yancey one disputed vote, leading to an exact tie, with Simonds and Yancey each getting 11,608 votes. By law, the winner will now be chosen by lot. If Simonds wins, the Virginia's lower chamber will be split evenly 50-50. If Yancey wins, Republicans will have a 51-49 majority. But even if the Republicans do get a majority, they won't be able to have their way because they will have to get their bills past governor-elect Ralph Northam. Whatever happens, it's not likely to be final for a while, because lawsuits are a near-certainty. (V)

Nadler Will Succeed Conyers on the House Judiciary Committee

When Rep. John Conyers Jr. (D-MI) resigned due to sexual harassment charges, the highest-profile committee assignment that he vacated was as ranking member of the House Judiciary Committee. Reps. Zoe Lofgren (D-CA) and Jerry Nadler (D-NY) both wanted very much to be Conyers' successor in that post, and so both campaigned hard behind the scenes for the promotion. The House Democratic Caucus voted on Wednesday, and chose Nadler by a 118-72 vote.

Why should a relatively minor shuffling of the ranks of the Democratic leadership matter so much to these two members, or to anyone else? It is because if two things happen, both well within the realm of possibility, then Nadler will become one of the most powerful and high-profile politicians in the country. The first is the Democrats' retaking the House, which would elevate the Congressman to chair of the Judiciary Committee. The second is Donald Trump being impeached, a process that would be led by the Judiciary Committee, particularly its chair.

Both Nadler and Lofgren were cautious that they were not "running" for the promotion as impeachment candidates. However, both were willing to share their views on the process freely. Nadler believes, quite correctly, that impeachment is only worthwhile for the Democrats if sizable segments of the Republican Party and the voting public accept that it is proper and necessary. Otherwise, the whole thing will look like a partisan witch hunt, as Bill Clinton's impeachment did, and could rebound on the party responsible, as Bill Clinton's impeachment also did. And so, it remains the case that any possibility of moving forward with this remains in the hand of one Robert Mueller. (Z)

White House Takes Petitions Offline

When Barack Obama was president, one of the ways in which he harnessed the power of the Internet was to create a White House-hosted petitions site called "We the People." A promise was made that any petition reaching a set number of signatures would receive an official response from the administration (originally 5,000, then 25,000, and finally 100,000). Sometimes, the site facilitated some good-natured silliness, thus forcing the White House to take an official position on whether the U.S. should build a Death Star or if pop singer Justin Bieber should be deported. Generally speaking, though, it was a useful expression of democracy in action in the 21st century, and it led to some actual legislation, like a bill forbidding gay conversion therapy.

As one might imagine, the petitions have not been as good-natured since Donald Trump took over as president. In fact, the petition that received the most traffic, with 1 million signatures—aka 10 times the theoretical threshold for a response—is one calling for the President to release his tax returns. Another 15 had also reached the 100,000-signature mark, all were critical in nature, and none received responses. It is not too great a surprise, then, that the site has gone dark. Those who visit see a message that includes this explanation:

Thank you for your interest in Petitions.WhiteHouse.gov. To improve this site's performance, the platform is currently down for maintenance and will return in late January. All existing petitions and associated signatures have been preserved and will be available when the site is relaunched. Following the site's relaunch, petitions that have reached the required number of signatures will begin receiving responses.

Certainly, it's possible that this is true. However, it is hard to imagine what kind of overhaul would take six weeks, or why such a project would begin right in the midst of the Christmas holidays. On the other hand, if one wanted to shut down a website without attracting too much attention or negative feedback, this would be the optimal time to do it. Odds are that the site goes back online roughly at the same time that Trump releases his tax returns and construction on the Mexican wall begins. (Z)

Email a link to a friend or share:

---The Votemaster and Zenger