Congress seen as not likely to pass tax overhaul quickly
After their humiliating loss on health care, Republicans in Congress could use a quick victory on a big issue. It won’t be an overhaul of the tax code. Overhauling the tax code could prove harder to accomplish than repealing and replacing Barack Obama‘s health law. Congressional Republicans are divided on significant issues, especially a new tax on imports embraced by House Speaker Paul Ryan. And the White House is sending contradicting signals on the new tax, adding to the uncertainty. House Republicans also can’t decide whether to move on from health care. Ryan canceled a scheduled vote on a House GOP plan after it became obvious that Republicans didn’t have the votes. He said he will continue to work on the issue but one of his top lieutenants on health care, Rep. Kevin Brady, R-Texas, says he is now “100 percent” focused on a tax overhaul. Ryan says Congress can work on both at the same time. It won’t be easy. Here’s why: ___ REPUBLICAN DIVIDE House and Senate Republicans largely agree on the broad outlines of a tax overhaul. They want to lower tax rates for individuals and corporations, and make up the lost revenue by scaling back tax breaks. But they are sharply divided on a key tenet of the House Republican plan. The new “border adjustment tax” would be applied to profits from goods and services consumed in the U.S., whether they are domestically produced or imported. Exports would be exempt. House GOP leaders say the tax is key to lowering the top corporate income tax rate from 35 percent to 20 percent. But good luck finding a single Republican senator who will publicly support the tax. Sen. Rob Portman, R-Ohio, is the latest in a long line of Republican senators to come out against the tax. ___ ABSENT DEMOCRATS Senate Finance Committee Chairman Orrin Hatch, R-Utah, says he wants to work with Democrats to overhaul the tax code. “A bipartisan bill would allow us to put in place more lasting reforms and give the overall effort additional credibility,” Hatch said. Majority Leader Mitch McConnell, R-Ky., has said it is bad policy to pass major legislation without bipartisan support. “Without some meaningful buy-in, you guarantee a food fight,” McConnell wrote in his memoir last year. “You guarantee instability and strife.” But in the House, Republicans haven’t reached out to Democrats in any meaningful way. ___ WHERE’S THE WHITE HOUSE? “Obviously we’re driving the train on this,” White House press secretary Sean Spicer said. But President Donald Trump‘s administration has been all over the map on tax reform. Trump at one point said the House border tax is too complicated, then said it’s in the mix. Treasury Secretary Steven Mnuchin told a Senate panel that “there would be no absolute tax cut for the upper class” in Trump’s tax plan. However, the plan Trump unveiled during his presidential campaign would provide big tax breaks to high-income households. Since taking office, Trump has promised “massive” tax cuts for the middle class. A former Treasury official under President Barack Obama says the White House needs to stake out clear goals on tax overhaul to guide the debate in Congress. “I think it’s important for the administration to signal early the general shape” of what they would like to accomplish so that there are fewer proposals vying for attention, said Michael Mundaca, a former assistant Treasury secretary now at Ernst & Young. ___ TAX CHANGE IS DIFFICULT There is a reason it’s been 31 years since the last time Congress rewrote the tax code. Since then, the number of exemptions, deductions and credits has mushroomed. Taxpayers enjoyed $1.6 trillion in tax breaks in 2016 — more than the federal government collected in individual income taxes. That huge number could provide plenty of tax breaks that lawmakers can scale back so they can lower tax rates significantly. There is just one problem — all of the biggest tax breaks are very popular and have powerful constituencies. Nearly 34 million families claimed the mortgage interest deduction in 2016. That same year more than 43 million families took advantage of a deduction of state and local taxes. The House Republicans’ tax plan would retain the mortgage deduction and eliminate the deduction for state and local taxes. ___ HEALTH CARE Both Trump and Republicans in Congress made big campaign promises to repeal and replace Obama’s health law, so the issue won’t go away. However, several players say negotiations on a way forward are non-existent. In the meantime, Trump is stoking animosity among a key voting bloc by criticizing them on Twitter. Two factions in the House GOP had members oppose the health plan: the hard-right Freedom Caucus and the moderate Tuesday Group. Ryan has suggested that they get together to sort out their differences, but it’s not happening, according to one key lawmaker. “We are not currently negotiating with the Freedom Caucus. There was never a meeting scheduled with the Freedom Caucus. We will never meet with the Freedom Caucus,” said Rep. Chris Collins, R-N.Y., a member of the Tuesday Group. Trump tweeted: “The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast. We must fight them, & Dems, in 2018!” To quote a favorite saying of the president, Not nice. Republished with permission of The Associated Press.
House GOP health bill facing fresh House committee test
The White House and Republican leaders are talking to rank-and-file lawmakers about revising the GOP health care overhaul, hoping to keep a rebellion by conservatives and moderates from snowballing and imperiling the party’s showpiece legislation. Four days after a congressional report projected the bill would pry coverage from millions of voters, signs of fraying GOP support for the legislation were showing. The measure would strike down much of former President Barack Obama‘s 2010 overhaul and reduce the federal role, including financing, for health care consumers and is opposed uniformly by Democrats. In a fresh test of Republicans’ willingness to embrace the legislation, the House Budget Committee was considering the measure Thursday. Republicans expressed confidence the bill would be approved, but the vote could be tight. The panel can’t make significant changes but was expected to endorse non-binding, suggested changes to nail down votes. The bill would eliminate the tax penalty that pressures people to buy coverage and the federal subsidies that let millions afford it, replacing them with tax credits that are bigger for older people. It would cut Medicaid, repeal the law’s tax increases on higher earning Americans and require 30 percent higher premiums for consumers who let coverage lapse. Overt GOP opposition grew after the nonpartisan Congressional Budget Office projected Monday that the legislation would push 24 million Americans off coverage in a decade and shift out-of-pocket costs toward lower income, older people. Obama’s law has provided coverage to around 20 million additional people House Speaker Paul Ryan, R-Wis., told reporters Wednesday that leaders could now make “some necessary improvements and refinements” to the legislation. But he declined to commit to bringing the measure to the House floor next week, a schedule Republican leaders have repeatedly said they intended to keep. At a late rally in Nashville Wednesday, President Donald Trump said: “We’re going to arbitrate, we’re all going to get together, we’re going to get something done.” Vice President Mike Pence met with House GOP lawmakers and pressed them to unite behind the legislation. “‘It’s our job to get it out of here and get it to the Senate,’” Pence told Republicans, according to Rep. Dennis Ross, R-Fla. That would let Trump pressure “Democrats in these red states to come on board,’” Ross said, referring to Republican-leaning states where Democratic senators face re-election next year. But insurgents still abound. Conservatives want to end Obama’s expansion of Medicaid to 11 million additional low-income people next year, not 2020 as the bill proposes. They say a GOP proposed tax credit to help people pay medical costs is too generous, and they want to terminate all of Obama’s insurance requirements, including mandatory coverage of specified services like drug counseling. Rep. Mark Meadows, R-N.C., head of the hard-line conservative House Freedom Caucus, continued pushing for changes. He claimed at least 21 members of his group would oppose the measure as written; the bill would fail if 22 Republicans join all Democrats in opposing it. But underscoring the push-pull problem GOP leaders face in winning votes, moderates feel the tax credits are too stingy, especially for low earners and older people. They oppose accelerating the phase-out of the Medicaid expansion and are unhappy with long-term cuts the measure would inflict on the entire program. Terminating the Medicaid expansion in 2020 and not 2018 “is sacrosanct to me,” said moderate Rep. Tom MacArthur, R-N.J. In a new complication, Sen. Charles Grassley, R-Iowa, said the measure lacked the votes to pass in the Senate, where Republicans hold a precarious 52-48 majority. That left House members angry over being asked to take a politically risky vote for legislation likely to be altered. Moderates “don’t like the idea of taking a vote in the House that may go nowhere in the Senate,” said Rep. Charlie Dent, R-Pa. Amid the maneuvering, a federal report said more than 12 million people have signed up for coverage this year under the very statute that Republicans want to repeal. That figure underscored the potential political impact of the GOP’s next move. Republished with permission of The Associated Press.
Updates from the 1st presidential debate
The Latest on the first of three presidential debates between Democrat Hillary Clinton and Republican Donald Trump (all times EDT): 10:45 p.m. Both candidates concluded the first presidential debate by saying they will accept the outcome if the other wins. Hillary Clinton spoke directly to viewers and said, “It’s not about us, it’s about you.” Donald Trump initially dodged the same question, saying he would make a “seriously troubled” America “great again.” He added: “I’m going to be able to do it. I don’t believe Hillary Clinton will.” But Trump finished his answer by saying that if Clinton wins, “I will absolutely support her.” ___ 10:43 p.m. Hillary Clinton is punching back at Donald Trump’s assertions that she doesn’t have the “stamina” to be president. Trump has questioned whether Clinton has the physical fitness to be president and he repeated the criticism to her directly during the debate. Clinton’s response? Trump shouldn’t talk about stamina until he’s tried out the busy schedule she kept up as secretary of state. Trump didn’t answer moderator Lester Holt’s original question about his past comments that Clinton doesn’t have the “presidential look.” Clinton suggested the remarks were about gender, and she reminded the crowd of Trump’s past comments calling women “pigs” and other derogatory names. ___ 10:42 p.m. Donald Trump says NATO needs to “go into the Middle East with us” to combat the Islamic State group. And he is taking credit for NATO focusing resources on combating terrorism. In fact, the alliance agreed in July to contribute aircraft and conduct training in Iraq and has increased intelligence coordination there. And NATO set up an anti-terrorism program in 2004 — years before Trump criticized them as a presidential candidate. Earlier this year, Trump criticized NATO for not focusing on terrorism. He said that afterward, he saw an article reporting that NATO was opening a new, major anti-terrorism division. He said Tuesday that NATO’s action was “largely because of what I was saying, and my criticism of NATO.” ___ 10:40 p.m. Donald Trump is avoiding a specific declaration on how he would use nuclear weapons if he’s elected president. The Republican nominee said during the first presidential debate that he “would not do first strike” because “once the nuclear alternative happens, it’s over.” That statement suggests he would not authorize a nuclear attack unless the U.S. was struck first. But in the same answer Trump said he “can’t take anything off the table.” He mentioned adversary nations such as North Korea and Iran. President Barack Obama has considered changing existing policy to state clearly that the United States would not deploy nuclear weapons without first being attacked by nuclear weapons. But he met resistance and has elected not to make such a shift. ___ 10:38 p.m. Hillary Clinton is accusing Donald Trump of being too easily provoked to keep the United States from going to war — perhaps even one involving nuclear weapons. Trump says: “I have much better judgment than she does. I have much better temperament.” That drew laughs from some in the debate crowd, and prompted Clinton to exclaim: “Woo! OK!” Clinton then pivoted to policy, defending the U.S.-led war in Afghanistan. Clinton said Iran was “weeks away” from a nuclear bomb when she became secretary of state — and says the Obama administration thwarted that progress. She continued that Trump didn’t have “good judgment or the right temperament” because he could take the country to war over small issues, like being mocked on Twitter. ___ 10:35 p.m. Donald Trump is continuing to insist he opposed the Iraq War before the U.S. invasion despite evidence to the contrary. Trump says during the debate that he “did not support the war in Iraq,” calling that charge “mainstream media nonsense.” But there is no evidence Trump expressed public opposition to the war before the U.S. invaded. Trump was asked in September 2002 whether he supported a potential Iraq invasion in an interview with Howard Stern. Trump briefly hesitated, then responded: “Yeah, I guess so.” Presented with the comment during the debate, Trump responds: “I said very lightly, I don’t know, maybe, who knows.” He’s also telling reporters to call Fox News host Sean Hannity to confirm private conversations he said they had about the war. Hannity is a top Trump supporter. Clinton voted in favor of the invasion in 2002 while she was a New York senator. She has since said it was a mistake. ___ 10:27 p.m. Donald Trump is interrupting the moderator of the first presidential debate to insist he has the best temperament for the office. Trump repeatedly made the assertion after clashing with moderator Lester Holt over his early support for the Iraq War. Then he segued to his temperament. “I think my strongest asset by far is my temperament,” Trump said. “I know how to win.” Clinton and her allies have repeatedly hit Trump over his temper and inability to take criticism. ___ 10:23 p.m. Hillary Clinton says one key to fighting terrorism in the United States is working closely with Muslims living here. Clinton says Donald Trump has “consistently insulted Muslims abroad, Muslims at home.” She says Muslim people can provide information that law enforcement may not be able to obtain anyplace else. Both candidates were asked to explain how they would combat terrorism in the U.S. Clinton says her plan includes an intelligence surge to obtain “every scrap of information” and to “do everything we can to vacuum up intelligence from Europe, from the Middle East.” ___ 10:20 p.m. Hillary Clinton says defeating the Islamic State group and taking out its leaders would be a top priority as president. Clinton says she’s hopeful the Islamic State group would be pushed out of Iraq by the end of the year. She says the U.S. could then help its allies “squeeze” the terrorist group in Syria. Clinton says she would do everything possible to take out the group’s leaders, and make that one of her administration’s organizing principles
