Posts Tagged ‘House Ways and Means Committee’

Republican Tax Plan Quickly Hits First Hurdle

September 29, 2017

GOP lawmakers from high-tax states oppose repealing individual deduction for state and local taxes

A day after announcing their ambitious tax plan, Republicans debated scaling back one of their largest and most controversial proposals to pay for lower tax rates: repeal of the individual deduction for state and local taxes.

Faced with the potential for defections by House Republicans from high-tax states such as New York and New Jersey, Republicans are exploring ways to satisfy those lawmakers without backing off the lower tax rates they promised.

“The members with concerns from high-tax states have to be accommodated. This has to be dealt with,” said Rep. Peter Roskam (R., Ill.), a senior member of the House Ways and Means Committee whose district outside Chicago ranks 37th out of 435 in use of the deduction. “So, you can imagine a soft landing on this that creative people are putting much time and energy into.”

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Rep. Peter Roskam (R., Ill.)

The fight over the state and local deduction, with more than $1 trillion at stake over a decade, is an early signal of the bruising battle ahead for Republicans trying to pass a tax bill that hasn’t garnered Democratic support and that faces narrow GOP margins in the House and Senate. It is the most obvious case of a bloc of pivotal lawmakers holding a specific concern, but it won’t be the only one.

“The notion that you fix this and then it’s smooth sailing?” Mr. Roskam said. “How naive.”

If Republicans from high-tax states all oppose repeal and stick together, they have the clout to force a change. The top nine states for the deduction, measured as a percentage of income, are represented by 33 House Republicans. With one vacancy in the House, the party can lose no more than 22 GOP votes on legislation if all Democrats remain opposed.

The dispute over the state and local tax break echoes back to 1986, the last time Congress revamped the tax system. Then, too, House Republicans from New York fought against their own party’s plan to repeal the tax break. Aided by Democrats, who controlled the House, they prevailed, and taxpayers can now deduct their property taxes, along with either their income or sales taxes.

More than 90% of filers with incomes over $200,000 claim the deduction, according to the Tax Policy Center. Overall, 38% of the deduction’s value goes to California, New York and New Jersey, which have 21% of U.S. households, the center said.

Rep. Kevin Brady (R., Texas), the chairman of the House Ways and Means Committee, said he is listening to lawmakers from high-tax states and is open to further discussions.

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Rep. Kevin Brady (R., Texas)

“It’s crucial that we deliver tax relief for every American regardless of where they live, including in those states that have high state and local taxes,” said Mr. Brady, whose suburban Houston district ranks 328th out of 435 in use of the deduction, according to the nonpartisan Tax Policy Center. “We will have a choice between keeping that deduction for a few, or lowering tax rates for every American.”

New York Republicans said Thursday that they were concerned that without that deduction, many of their voters might end up paying more in taxes under the GOP plans, and they were waiting for details about tax brackets and other breaks to determine how they would fare.

“I’m also worried that it would exacerbate New York’s status as a donor state to Washington, where we send many more dollars to Washington than we receive back,” said Rep. John Faso (R., N.Y.), whose district is largely in the Hudson River Valley.

Rep. Peter King (R., N.Y.) said that taking away the state and local tax deduction would squarely hit his middle-class constituents on Long Island, whose property taxes can average $15,000 a year and who wouldn’t tend to benefit from other tax breaks contained in the House GOP plan.

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Rep. Peter King (R., N.Y.)

“It doesn’t add up,” Mr. King said. “Even under the best interpretation, maybe a majority of my constituents would break even. So, if the rest of the country is getting a tax cut, the most I can tell my constituents is: It could have been worse for us.”

Republicans don’t intend to produce a detailed plan for weeks. A high-level framework released Wednesday was the product of six top negotiators from the House, Senate and Trump administration, and top policy makers said the state and local tax provision was one of the main deductions they were targeting for elimination.

Possible options under discussion include allowing the break for property taxes but not income taxes, or else converting the deduction into a smaller credit. The plan could also adopt a more general cap on itemized deductions.

Repealing the break would free over the next decade more than $1 trillion that the party plans to use to lower tax rates. Politically, it would be good for most Republicans, shifting more of the federal tax burden from states they represent onto states they don’t and to Washington, D.C.

Repealing the state and local deduction while increasing the standard deduction would also limit the value of other deductions. Fewer people would get over the new, higher threshold to itemize deductions of $12,000 for individuals and $24,000 for married couples, meaning that fewer people would have an incentive to take deductions for home mortgage interest and charitable contributions.

Many higher-income households already have their state and local tax breaks curtailed under the alternative minimum tax. But about three-quarters of taxpayers who owe AMT and deduct state and local taxes would see a net increase if both provisions were repealed, as is the case under the GOP plan, according to economist Frank Sammartino of the Tax Policy Center.

Republicans argue that the deduction lets states raise taxes with fewer consequences, because the federal deduction subsidizes part of the cost. If New York wants higher taxes, they say, New Yorkers should pay.

Democrats and blue-state Republicans say the change would punish their states.

“Republicans used to say that the best decisions are made locally, and now they want to tax local decisions,” said Sen. Chris Van Hollen (D., Md.).

The deduction’s fate in the Senate isn’t clear, either, even though Republicans there don’t represent any of the top nine states for the deduction.

“Chairman [Orrin] Hatch recognizes that every major provision within the tax code has an important constituency and consequence,” said Julia Lawless, a spokeswoman for Mr. Hatch, who heads the Senate Finance Committee. “He will work with members to examine these provisions and make appropriate decisions.”

The fight over the state and local deduction highlights the backlash every decision in the tax debate will bring — a reality glossed over when Republicans described their tax plan Wednesday, said Sen. Bob Corker (R., Tenn.). He said he supports repealing the state and local deduction but was “almost aghast” at the lack of clarity about tax breaks that would have to go away.

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Sen. Bob Corker (R., Tenn.)

“They’re throwing sugar out on the table,” he said. “You haven’t even begun to deal with the spinach part. Not even a little leaf of spinach was thrown out on the table.”

–Kristina Peterson and Laura Saunders contributed to this article.

Write to Richard Rubin at and Siobhan Hughes at


The 30 Republicans Holding Up Tax Reform

September 14, 2017

The Freedom Caucus threatens to side with Democrats and block the GOP majority.

By Karl Rove
The Wall Street Journal
Sept. 13, 2017 6:53 p.m. ET

No matter how persuasive President Trump is, it’s unlikely he can round up enough Democrats to get 60 votes in the Senate for tax reform. That means Republicans will need to use the Senate’s reconciliation process, which avoids the filibuster, to pass their plan with 51 votes. But first the House and Senate must pass a budget resolution—and soon.

A budget resolution sets spending levels and authorizes congressional committees to prepare bills fulfilling the blueprint. With the reconciliation plan in mind, this year’s resolution would set the size of the tax reform and then instruct the House Ways and Means Committee and the Senate Finance Committee to flesh out the provisions.

Gaining agreement on a budget resolution is always tough. No more than a handful of lawmakers from the opposition party ever vote for the majority’s resolution. It helps that Republicans control both the House and Senate, but the GOP must still resolve its internal philosophical disagreements.

House Republicans tend to insist on resolutions that balance the budget within 10 years. This means resolutions that pledge to slow substantially the growth of entitlement spending. Such promises are rarely fulfilled. But putting them in the budget blueprint fuels Democratic ads claiming Republicans will throw grandma off the cliff and deprive poor children of free school lunches. Knowing this, Senate Republicans tend to want resolutions that reach balance after 10 years. Another GOP tension is between defense hawks, who want increased military spending, and deficit hawks, who want all spending restrained or cut.

Then there are nerdy but important technical arguments, starting with how the resolution’s spending baseline is calculated. Beginning with a baseline of “current law” means assuming that a tax break currently authorized for only a year or two will actually expire instead of being reauthorized. But Congress renews some tax breaks annually and probably will keep doing so through the next decade. To account for this, many in the GOP want to calculate the baseline under “current policy.”

It sounds technical, but it quickly becomes political. Democrats demand “current law” because a higher baseline would make tax reform appear to raise the deficit more than it actually would. On the other hand a lower baseline would give tax reform more wiggle room: One GOP budget expert tells me that “current policy” would provide, on paper, $450 billion that could be used to lower rates and make the tax code simpler and fairer.

Dynamic scoring is another geeky fight. A tax reform that generates economic growth will offset some of the government revenue lost from cutting rates. Republicans want their bill evaluated with dynamic scoring because it takes this effect into account and makes reform more attractive. Democrats oppose it for the same reason.

Still, given time and leadership—both on Capitol Hill and from the White House—Republicans could cobble together a budget resolution setting up a strong tax reform, which in turn would juice the economy and redeem the GOP in the midterms.

The biggest obstacle is the House Freedom Caucus. This group of just over 30 Republican congressmen has already slowed up the process by threatening to vote with Democrats against the GOP budget resolution unless they can see and approve, in advance, every major provision of the tax-reform bill. The Freedom Caucus tried in late July to block the House Budget Committee’s passage of a resolution unless the border-adjustment tax was taken off the table—which it then was. Now the Freedom Caucus’s members say they’ll flake on the budget resolution if tax reform includes full, immediate expensing of business investment. But if that’s agreed to, they’ll have more demands.

These lawmakers say they want Congress to operate in “regular order,” with committees grinding away to write legislation instead of leadership handing it down. This is hypocritical bunk. What they want is for their caucus to dictate the details of tax bills to the House Ways and Means Committee, the Senate Finance Committee and the Republican majorities on both sides of Capitol Hill. Their approach is to make demands while threatening to join Nancy Pelosi in opposing the budget resolution unless they get their way.

If the Freedom Caucus acts on its threat, the budget resolution could be voted down, making tax reform impossible. No doubt, following their M.O., the group’s members would then blame the GOP leadership. Even if the resolution passes, the Freedom Caucus’s shenanigans may delay tax reform until 2018. These lawmakers are demonstrating once again that the freedom they most prize is freedom from the responsibility of governing.

Mr. Rove helped organize the political-action committee American Crossroads and is the author of “The Triumph of William McKinley ” (Simon & Schuster, 2015).

Appeared in the September 14, 2017, print edition.

Trump Will Get His Tax Cuts, Vast Majority of Economists Say

August 14, 2017

Bloomberg News

By Rich Miller and Catarina Saraiva

August 14, 2017, 4:00 AM EDT
  • Yet survey suggests the impact on economy will be limited
  • Fed seen raising interest rates, which may blunt stimulus

Rep. Brady Says on Track to Deliver Tax Bill This Year

The pros who make their living forecasting the economy overwhelmingly expect President Donald Trump and his fellow Republicans to push through tax cuts in time for next year’s congressional elections. They just don’t think that the reductions will do all that much to help the economy in 2018.

That’s the message from the latest Bloomberg monthly poll of economists, taken Aug. 4 to Aug. 9. Of 38 respondents, 29 expect Congress to pass tax-cut legislation by November 2018. The policy changes though are only expected to add 0.2 percentage point to the pace of gross domestic product expansion in 2018, according to the median figure from analysts penciling in an impact.

The Bloomberg survey forecasts growth in 2018 to be only slightly higher than this year — 2.3 percent versus 2.1 percent, according to median projections from a broader pool of 71 economists. What’s more, analysts see the economy losing momentum in 2019, with expansion falling back to 2 percent, contrasting with the Trump administration’s forecast of a further pickup.

“I think they’ll do something and it will probably be somewhat stimulative in the short run,” said High Frequency Economics Chief U.S. Economist Jim O’Sullivan, referring to Trump and Congress. “I don’t expect a huge impact from it.”

Cuts to individual and corporate rates would fall short of what GOP leaders and the Trump administration have promised — a once-in-a-generation permanent overhaul of the U.S. tax code, similar to what happened in 1986 under former President Ronald Reagan. If Republicans use a budget procedure for a tax bill to bypass Democratic opposition in the Senate, cuts would have to expire if they add to the long-term federal deficit.

First Half

The administration is betting that a mixture of corporate and individual tax cuts, along with other tax code changes, will eventually help lift annual economic growth to 3 percent, from the 2.1 percent average rate of the last eight years. In the first half of 2017, coinciding with Trump’s first six months in office, output rose at a 1.9 percent annual pace.

In order to win passage of a sweeping tax plan, the administration is holding a weekly, all-hands-on-deck meeting to coordinate strategy between the president and his allies, according to White House officials. The intensive discussions contrast with the at times haphazard approach the administration took in its failed attempt to repeal former President Barack Obama’s health-care law.

White House officials have said they’re still committed to a permanent tax revamp, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November. Trump and Senate Majority Leader Mitch McConnell have sparred in recent days over the amount of time needed to pass complicated legislation, such as repealing and replacing Obamacare.

Trump officials see their policies accelerating GDP growth to 2.7 percent in 2019, on its way to 3 percent within the following two years. Economists beg to differ.

“The type of stimulus being talked about is temporary,” said Nariman Behravesh, chief economist at consultants IHS Inc. “It won’t deliver a sustained increase in growth.”

Texas Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, said Friday that Congress is on track to deliver a tax bill to Trump in 2017. Brady, in a Bloomberg Television interview, acknowledged the goal is “aggressive” but said there’s “urgency” in terms of the economy and U.S. competitiveness.

Fed Action

As the administration aims to add fuel to the economy, the Federal Reserve is expected to be withdrawing it, according to the poll. Economists forecast that the central bank will raise interest rates once more this year and three times in 2018, each time by a quarter percentage point.

That’s in line with Fed policy makers’ own projections but significantly below levels implied in financial markets.

“To keep the economy on a sustainable path of growth, we need to gradually reduce the monetary stimulus put in place during the recession and recovery,” San Francisco Fed President John Williams said in an Aug. 2 speech in Las Vegas. “If we delay too long, the economy will eventually overheat, causing inflation or other imbalances to emerge.”

Policy makers last increased borrowing costs in June, when they boosted the target range for the inter-bank federal funds rate to a range of 1 percent to 1.25 percent.

Taxes, Budget Are Focus for Trump Despite Probes

May 22, 2017

White House, congressional GOP leaders aim to show they can deliver on policy promises

The White House on Tuesday will roll out a budget proposal crystallizing the president’s priorities.

The White House on Tuesday will roll out a budget proposal crystallizing the president’s priorities. PHOTO: ALEX WONG/GETTY IMAGES

WASHINGTON—President Donald Trump is thousands of miles away, but his policy agenda faces tests back home this week as he looks to shift the focus from Russia investigations to his plans for boosting American military power and revamping the tax code.

The White House on Tuesday will roll out a budget proposal crystallizing the president’s priorities in a blueprint that calls for large cuts to social safety-net programs such as Medicaid and food assistance while increasing Pentagon and border-security spending.

While Mr. Trump visits Pope Francis in Rome on Wednesday, Treasury Secretary Steven Mnuchin in Washington will testify about Mr. Trump’s 2018 budget plan before the House Ways and Means Committee. The same congressional panel will hold a separate hearing devoted to a tax overhaul aimed at reducing rates and speeding job growth—a centerpiece of Mr. Trump’s campaign message.

Following a drumbeat of revelations about Mr. Trump and Russia over the past two weeks, the White House and congressional Republican leaders are eager to show that they can deliver on policy promises.

“People in the country need to know that we are busy at work trying to solve their problems,” House Speaker Paul Ryan said. “So I realize that there’s a lot in the media these days. That doesn’t seize up Congress. That doesn’t stop us from doing our jobs, to work on people’s problems.”

A potential land mine for the Trump administration is a report coming out this week from the Congressional Budget Office. The nonpartisan CBO will release its evaluation of the health-care bill that narrowly passed the House on May 4 following an intensive lobbying push by the White House.

The analysis could influence the bill’s fate in the Senate by giving lawmakers a fuller picture of how much the measure will cost and how many people might lose insurance coverage.

Meantime, the congressional machinery devoted to the Russia probe continues.

A high-profile witness will appear before the House Intelligence Committee this week as part of the panel’s investigation into alleged Russian interference in the 2016 election, including questions about whether anyone from Mr. Trump’s campaign colluded with the Kremlin.

John Brennan, the former Central Intelligence Agency director under President Barack Obama, will testify publicly on Tuesday—a hearing that is expected to shed new light on how the Obama administration’s intelligence agencies came to the determination that Russia interfered in the 2016 election.

John Brennan, the former Central Intelligence Agency director under President Barack Obama, will appear Tuesday before the House Intelligence Committee as part of its investigation into alleged Russian interference in the 2016 election.

John Brennan, the former Central Intelligence Agency director under President Barack Obama, will appear Tuesday before the House Intelligence Committee as part of its investigation into alleged Russian interference in the 2016 election. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

The Senate Intelligence Committee is also preparing for a hearing with former Federal Bureau of Investigation Director James Comey after Memorial Day. A final date hasn’t been set. But the hearing is expected to be a moment of high-drama, with Mr. Comey facing questions about a memo he wrote saying that Mr. Trump asked him to back off an investigation into former national security adviser Michael Flynn.

Asked whether he had said any such thing to Mr. Comey, Mr. Trump told reporters at a news conference last week: “No. No.”

Many presidents in modern times have endured distracting investigations that threatened to derail their agendas. Former Republican President Ronald Reagan faced the Iran-Contra scandal, while Democrat Bill Clinton dealt with long-running inquiries into the real-estate deal known as Whitewater and the probe into his affair with Monica Lewinsky.

Last week, the Justice Department named former FBI Director Robert Mueller as a special counsel to head the investigation arising from allegations that Russia interfered in the presidential race. Some allies of Mr. Trump believe this is a welcome development that will enable the White House to concentrate on its priorities and defer to Mr. Mueller while the investigation plays out.

Anthony Scaramucci, who served on Mr. Trump’s transition team, said in an interview Sunday that a stock answer from the White House when it faces questions about the Russia probe should be: “We have a special counsel. Why don’t we just allow them to do their work.”

Inside the White House, Trump aides say they have been discussing ways to compartmentalize tasks so that the probe doesn’t consume the building and doom various policy goals. Some veterans of past administrations believe such concerns are justified.

“There’s reason to be concerned that all of the turbulence surrounding stuff like the Comey firing will distract from and delay what should otherwise be a very robust and positive economic policy agenda,” said Joshua Bolten, a former White House chief of staff under George W. Bush and chairman of the Business Roundtable, a trade group representing some of the biggest U.S. firms. “We don’t have a lot of weeks to spare if serious [tax] reform is going to get through.”

Staying disciplined amid the Russia probe depends to some extent on Mr. Trump and the restraint he is able to show. In the past, the president has seen fit to tweet about various matters in the news that upset him, giving the issues new life.

Since leaving for his trip last week to the Middle East and Europe, Mr. Trump hasn’t addressed the Russia controversy in his twitter feed. Nor has he gone off script in any of his public remarks.

Ken Duberstein, a former chief of staff to Mr. Reagan who dealt with the fallout from Iran-Contra, said that the Reagan White House set up a system in which the counsel’s office focused on the scandal, leaving others to focus on their jobs. He said the Trump White House should consider a similar arrangement.

“A lot of these lessons apply to any president, because every president invariably goes into the ditch on something,” Mr. Duberstein said.

Write to Peter Nicholas at and Byron Tau at

Appeared in the May. 22, 2017, print edition as ‘Taxes, Budget Focus for Trump Despite Probes.’

Democratic Lawmakers Deny Their President: After rejecting part of trade legislation, House supports fast-track authority

June 12, 2015


The President That Never Worked The Halls of Congress, May be Paying The Price

President Barack Obama, with House Minority Leader Nancy Pelosi, made a rare, unannounced visit to Capitol Hill to urge Democrats to support the trade bill.
President Barack Obama, with House Minority Leader Nancy Pelosi, made a rare, unannounced visit to Capitol Hill to urge Democrats to support the trade bill. PHOTO: REUTERS

House rejects Obama on trade authority — humiliating defeat for President Barack Obama

June 12, 2015


The Associated Press

WASHINGTON (AP) — The House derailed a high-profile White House-backed trade bill on Friday, a humiliating defeat for President Barack Obama inflicted by Democratic Leader Nancy Pelosi and dozens of union-backed lawmakers from his own party.

The 302-126 vote left the legislation in perilous limbo, and came a few hours after Obama journeyed to the Capitol to deliver a last-minute personal plea to fellow Democrats to give him power to negotiate global trade deals that Congress could approve or reject but not change.

“I don’t think you ever nail anything down around here. It’s always moving,” the president said as he departed — a prescient remark given Pelosi’s dramatic announcement later on the House floor.

“Slow down the fast track to get a better deal for the American people,” the California lawmaker said in a speech that drew handshakes and hugs from Democrats have labored for months to reject Obama’s request for “fast track” authority in trade talks.

Republicans command a majority in the House, and Speaker John Boehner and the GOP leadership worked in harness with Obama to pass the legislation. But there were many defections among Republicans unwilling to expand the president’s authority and not nearly enough Democrats supporting him for the bill to prevail.

The outcome was also a triumph for organized labor, which had lobbied lawmakers furiously to oppose the measure that union officials warned would lead to the loss of thousands of American jobs.

“The president needs to realize we all represent our districts,” said Rep. Gene Green, D-Texas. He said labor opposition to the effort was “overwhelming.”

Technically, the pivotal vote was on a portion of the legislation to renew federal aid for workers who lose their jobs through imports.

A second roll call followed on the trade negotiating powers themselves, and the House approved that measure, 219-211. But under the rules in effect, the overall legislation, previously approved by the Senate, could not advance to the White House unless both halves were agreed to.

That made the day’s events something less than a permanent rejection of the legislation.

Pelosi said the bill was “stuck in the station,” suggesting that changes could get it moving again.

Even so, it was unclear how majority Republicans and the White House would be able to gain the momentum.

President Barack Obama, House Minority Leader Nancy Pelosi of Calif. and House Minority Assistant Leader James Clyburn of S.C., leave meeting with House Democrats on Capitol Hill in Washington, Friday, June 12, 2015. The president made an 11th-hour appeal to dubious Democrats on Friday in a tense run-up to a House showdown on legislation to strengthen his hand in global trade talks (AP Photo/Carolyn Kaster)

Obama drew applause when he walked into the meeting with Democrats, but sharp words after he left and few if any conversions for his efforts.

“Basically the president tried to both guilt people and then impugn their integrity,” said Rep. Peter DeFazio, D-Ore., one of the most outspoken opponents of the legislation.

Another Democrat, Rep. Steve Cohen of Tennessee, said Obama had told Democrats that “his whole philosophy, life, everything he’s done has been to help people. And he thinks he’s doing that with this trade agreement.”

Cohen added he remains on the fence after hearing Obama make his pitch. He noted that FedEx, a major employer in his district, supports the bill, while longtime political allies in organized labor oppose it.

Business groups generally favor the measure. But strong opposition by organized labor carries at least an implicit threat to the re-election of any Democrat who votes in the bill’s favor.

The debate and vote are certain to reverberate in next year’s presidential election as well. Most Republican contenders favor the trade bill. Among Democrats, Hillary Clinton is uncommitted, despite calls from presidential rival Vermont Sen. Bernard Sanders, an opponent of the measure, to take a position.

The president’s hastily arranged visit to Capitol Hill marked a bid to stave off a humiliating defeat at the hands of his own party.

His visit relegated much of the debate on the House floor to the status of a sideshow.

“Is America going to shape the global economy, or is it going to shape us?” said Rep. Paul Ryan, the Wisconsin Republican who is head of the House Ways and Means Committee and a GOP pointman on an issue that scrambled the normal party alignment in divided government.

But Rep. Sander Levin, D-Mich., countered that the legislation heading toward a showdown vote included “no meaningful protections whatever against currency manipulation” by some of America’s trading partners, whose actions he said have “ruined millions of middle class jobs.”

Democratic Rep. Barbara Lee of California, an opponent of the legislation, said Obama’s appeal “didn’t convince me. It may have convinced other members.”

Other presidents have had the authority Obama seeks. The White House wants the legislation as it works to wrap up a round of talks with 11 Pacific Area countries.

The same measure included a renewal of assistance for workers who lose their jobs as a result of global trade. Normally, that is a Democratic priority, but in this case, Levin and other opponents of the measure mounted an effort to kill the aid package, as a way of toppling the entire bill.

The move caught the GOP off-guard. House Republicans, already in the awkward position of allying themselves with Obama, found themselves being asked by their leaders to vote for a worker retraining program that most have long opposed as wasteful. Many were reluctant to do so, leaving the fate of the entire package up in the air, and Obama facing the prospect of a brutal loss — unless he can eke out what all predict would be the narrowest of wins.


Associated Press writers David Espo, Darlene Superville, Jim Kuhnhenn, Alan Fram, Laurie Kellman and Andrew Taylor contributed to this report.


Nancy Pelosi bucks President Obama on trade

June 12, 2015


By LAUREN FRENCH 6/12/15 1:26 PM EDT Updated 6/12/15 1:38 PM EDT

After weeks of silence, House Minority Leader Nancy Pelosi spoke on the House floor Friday against legislation to give President Barack Obama fast-track trade authority and a related bill to provide aid to workers displaced by trade.

“We have an opportunity to slow down,” the California Democrat said. “Whatever the deal is with other countries, we want a better deal for America’s workers.”

The floor speech by the Democratic leader spelled trouble for President Barack Obama’s bid to complete the 12-nation Trans-Pacific Partnership agreement. Democrats overwhelmingly oppose giving the president fast-track authority to clinch the deal, but there was some hope among trade proponents that Pelosi might help sway enough Democrats to vote for it to get it over the hump.


Instead, she sided with opponents ahead of a pair of critical votes, an ominous sign for trade proponents. Pelosi said she would vote against a jobs aid bill that is critical to winning needed Democratic votes for fast track.

“Its defeat is the only way we will be able to slow down fast track,” Pelosi said.

Read more:



Obama makes personal appeal on trade with key vote in House

June 12, 2015

Associated Press


WASHINGTON (AP) — President Barack Obama made an 11th-hour appeal to dubious Democrats on Friday in a tense run-up to a House showdown on legislation to strengthen his hand in global trade talks.

The president’s hastily scheduled trip to the Capitol coincided with the beginning of debate on the House floor on the legislation, which stands near the top of his second-term agenda.

“Is America going to shape the global economy, or is it going to shape us?” said Rep. Paul Ryan, the Wisconsin Republican who is head of the House Ways and Means Committee and a GOP pointman on an issue that scrambled the normal party alignment in divided government.

But Rep. Sander Levin, D-Mich., countered that the legislation heading toward a showdown vote included “no meaningful protections whatever against currency manipulation” by some of America’s trading partners, whose actions he said have “ruined millions of middle class jobs.”

The legislation would allow Obama to complete global trade deals that Congress could approve or reject, but not change. Other presidents have had the authority, which is dubbed “fast track.” The White House wants the authority as he works to wrap up a round of talks with 11 Pacific Area countries.

The same measure included a renewal of assistance for workers who lose their jobs as a result of global trade. Normally, that is a Democratic priority, but in this case, Levin and other opponents of the measure mounted an effort to kill the aid package, as a way of toppling the entire bill.

The president’s last-minute visit to Capitol Hill marked a bid to stave off a humiliating defeat at the hands of his own party on a top second-term priority.

The move caught the GOP off-guard. House Republicans, already in the awkward position of allying themselves with Obama, found themselves being asked by their leaders to vote for a worker retraining program that most have long opposed as wasteful. Many were reluctant to do so, leaving the fate of the entire package up in the air, and Obama facing the prospect of a brutal loss — unless he can eke out what all predict would be the narrowest of wins.

“If we have to pass something that’s a Democratic ideal with all Republicans to get the whole thing to go,” said Rep. Tom Rooney, R-Fla., “we could be in trouble.”

The main trade bill at issue would give Obama so-called “fast track” authority to negotiate trade deals that Congress could approve or reject, but not amend. He hopes to use the authority, already agreed to by the Senate, to complete a sweeping pact with 11 other Pacific Rim nations which would constitute the economic centerpiece of his second term. Obama says such a pact with Japan, Mexico, Singapore and other nations constituting 40 percent of the global economy would open up critical new markets for American products.

Business groups like the Chamber of Commerce crave the deal; labor unions are ardently opposed, pointing to job and wage losses from earlier trade pacts opponents say never lived up to the hype from previous administrations.

Those colliding interests have produced unusual alliances on Capitol Hill, with House Republicans working to help a president they oppose on nearly every other issue, and most Democrats working against him.

Yet in a convoluted series of events Thursday, the fast-track bill, long the main event, seemed to fade in importance even as Republicans began sounding confident it would command enough votes to pass. Instead, Democrats began eyeing the possibility of taking down the related Trade Adjustment Assistance bill — a maneuver that would be made possible only because of how House leaders decided to link the two of them in rules governing how they would come to a vote.

Republicans said that the sequencing was determined at the behest of House Minority Leader Nancy Pelosi, D-Calif. Pelosi, trying to maintain leverage, has remained noncommittal on the whole issue to the end, even as she worked behind the scenes with House Speaker John Boehner, R-Ohio, this week to solve a last-minute hang-up involving Democratic concerns about cutting Medicare funds to pay for worker retraining.

Nancy Pelosi. Photo by Greg Nash

The intricate solution to the Medicare issue lay in finding another revenue source —various tax penalties — and also lining up the votes in a certain order that made passage of the fast-track bill contingent on passage of the trade adjustment bill. That created the opening for Democratic fast-track opponents to take aim at the trade adjustment measure.

“The TAA is the handmaiden to facilitate the whole deal,” said Rep. Peter DeFazio, D-Ore. “We have the potential to stop this whole train.”

Friday’s outcome appears to depend on how many Democrats defect on the trade adjustment bill — and whether Republicans can make up their numbers. The biggest questions hanging over the House late Thursday were: How many of the 188 Democrats will vote against TAA because it’s the best way to kill fast track? And how many of the 246 Republicans might hold their noses and vote for the jobs program in a bid to save fast track?

The trade issue’s divisiveness was evident when the House voted narrowly, 217-212, on a procedure Thursday to advance the package to Friday’s expected showdown.

The White House, recognizing the precarious position the package is in, dispatched top officials to Capitol Hill Thursday to meet with Democrats, and Obama himself made a surprise appearance at Thursday night’s annual congressional baseball game. Arriving as Democratic and Republican lawmakers faced off at Nationals Park, Obama was greeted with chants of “TPA! TPA!” from the GOP side — the acronym for the Trade Promotion Authority fast track bill.


Associated Press writer Darlene Superville contributed to this report.


Washington (CNN)In another sign that his trade plan might be in jeopardy, President Barack Obama is on Capitol Hill on Friday morning to meet with Democrats to push for support on a vote related to trade authority.

House Democrats, the vast majority of whom are trying to defeat fast-track trade legislation, will gather to hear from the President at their 9:30 a.m. caucus meeting, according to a Democratic aide. A final vote on the legislation is expected Friday, after a procedural vote narrowly passed Thursday evening.

A House Democratic member told CNN the President’s outreach is coming too late and doubts it will save the package Friday.

“Where has he been? He went to the baseball game and didn’t talk to anyone,” this member told CNN.

Democrats will need the majority of votes to carry the Trade Adjustment Assistance bill — which is critical for passing Trade Promotion Authority legislation — but this member, who is an opponent of both bills said there are 124 “hard nos” (out of 188). If that number holds and Obama doesn’t flip votes the TAA bill won’t pass and TPA won’t even get a vote.

With the toxic politics of trade dividing their party, House Democratic Leader Nancy Pelosi and her leadership team has been largely on the sidelines. The Obama administration, instead, is relying on Wisconsin Rep. Ron Kind and a small band of pro-trade House Democrats to pass the President’s top key economic issue.

RELATED: Obama trade agenda in jeopardy as Hill Dems feud

House Speaker John Boehner has said for months the President’s trade agenda can’t pass without help from Democrats, so the low-key Wisconsin legislator has been methodically working behind the scenes to boost the meager Democratic vote — hovering around 20 — higher.

“Our rules, no rules or China’s rules — it can’t be made any simpler than that,” Boehner says, describing his pitch on why members should vote for the bill. He argues that if Congress won’t give the President this authority to negotiate with a host of trading partners, the United States will be at a competitive disadvantage.

Kind is serving his 10th term representing the 3rd Congressional District, located on the western side of Wisconsin. From his post on the powerful Ways and Means Committee, he’s been involved in other key policy battles that divided Democrats, including health care, which he called “exhausting.”

Although he wasn’t in Congress for the fight over the North American Free Trade Agreement (NAFTA) that passed narrowly in 1993, Kind says the fallout from that deal — with jobs going overseas — set up a tough road for Democrats to publicly support legislation setting up another major trade deal.

“Early on I was just encouraging my colleagues to keep your powder dry. There’s going to be a lot of pressure from a lot of groups out there to pin you down early before you have all the facts and information. Keep your mind open and let the administration make the case and not get too far out ahead of it,” he said.

Democrat versus Democrat

Most congressional Republicans back trade promotion authority — the so-called fast-track bill — which would help negotiations between the U.S. and a dozen countries working to finalize the Trans-Pacific Partnership trade deal. The bill guarantees Congress will vote on that deal with limited debate and no amendments. Without the fast-track authority, Obama administration officials say the international negotiations on the broader trade deal will fall apart.

Kind says he’s surprised so few Democrats in the House are willing to support the White House on this issue.

“Every president, from FDR minus Nixon, has had this authority and we should have a very good reason why we would deny our own president, President Obama,” he said.

The challenge intensified in the final stretch before Friday’s vote. A revolt by House Democrats to a bill linked to the fast-track authority — one approving worker retraining programs for those displaced by new trade — threatened to take down the trade bill.

But Kind wasn’t ready to concede, and said he was still hopeful his colleagues would “see the light and give this president the benefit of the doubt.”

Behind the scenes link to the White House and Republican Leaders

In the face of massive and sometimes ugly resistance from members of their own party, labor and environmental groups, Kind and his allies from the pro-business “New Democratic Coalition” have been the bridge to the White House and top House Republicans.

Kind is diplomatic when pressed about Pelosi’s role, which has mostly been on the edges of the debate, repeatedly declining to say whether she will vote for the fast-track bill.

“I think she has created enough space for all of us to make up our own minds,” he said.

As part of outreach efforts to Democrats, Kind and his allies have invited virtually every Cabinet official to come up to Capitol Hill and sell the need for the legislation.

He pushes back at those who knock Obama for not wining and dining lawmakers in an effort to secure their votes.

“There’s all this criticism about him not schmoozing enough with members, not working it, massaging the egos here,” Kind said. “But I give him credit for the intellectual approach he brings to the job. He lays out the case, he lays out the merits and he has enough respect for members for us to figure it out ourselves.”

Kind said he’s been in regular contact with the President, White House chief-of-staff Denis McDonough, U.S. Trade Representative Michael Forman, and other key officials, giving them feedback on which members need information, phone calls and raising red flags on issues.

Before McDonough entered a meeting of all House Democrats on Thursday to appeal for support for the bills, he huddled in the hallway briefly with Kind.

Now what? What Obama can (and can’t) do with a Republican Senate

November 6, 2014
By Kevin Liptak, CNN
updated 12:28 PM EST, Thu November 6, 2014
US President Barack Obama speaks during a press conference in the East Room of the White House on November 5, 2014 in Washington, DC. (Mandel Ngan/AFP/Getty Images)

Washington (CNN) — Time to brush off the veto stamp.

For someone who’s only used it twice, President Obama may need some reacquainting with the last remaining weapon in Democrats’ arsenal. He last rejected a bill from Congress in 2010.

But he’s had blocking from a Democratic Senate majority until now. They’ve stood in the way of bills most Democrats would oppose. Things are likely to change in January, when Republicans take charge of the Senate.

If Senate Republicans follow the path of their House counterparts, he could be faced with proposals to repeal Obamacare and budgets that cut entitlement programs – the type of bills that will meet a quick end at the other end of Pennsylvania Avenue.

Obama to voters: “I hear you”

“Congress will pass some bills I cannot sign. I’m pretty sure I’ll take some actions that some in Congress will not like. That’s natural. That’s how our democracy works,” Obama said at a news conference Wednesday.

So what’s left for either side to achieve? Here are four things that Obama can — and can’t — do with the new Congress:

Immigration – He can sign an executive order

Republicans and Democrats both want to reform the nation’s immigration system. But that’s about as far as the White House and the House GOP have gotten in hammering out an agreement that would increase border security and ease deportations.

Related: 2016 starts now

The White House says the House had its chance on immigration reform when it balked on taking up a measure that passed the Senate on a bipartisan basis. Instead, Obama plans to announce an executive order that most speculate will drastically reduce the number of yearly deportations.

Initially meant for the end of the summer, the announcement was pushed until after the midterms — much to the chagrin of immigration reform supporters. Now the White House says it’ll happen before the end of the year.

But while the action may enrage Republicans, it can’t go nearly as far as legislation would. When the next Congress begins, the Senate bill praised by the White House becomes null — any potential new law would have to pass the Senate again.

Related: Obama delays action on immigration executive action

Obama’s executive order would likely forestall any hope of getting Republicans on board, though Obama reiterated Wednesday his order would be nullified if Congress takes action.

“You send me a bill that I can sign, and those executive actions go away,” was his message to GOP leaders.

Based on public statements from Senate Republicans, however, the chances of a bill after Obama’s executive action are small, meaning any legislative fix to immigration would come in the next Congress — after Obama leaves office.

Climate change – He can add to limits on carbon emissions

If Obama wasn’t getting anywhere with the last Congress on stemming carbon emissions — and he wasn’t — he certainly won’t gain any traction with the new one led by Sen. Mitch McConnell, who defeated his opponent partly by framing her as an ally in Obama’s “war on coal.”

The president has already put forth executive actions curbing emissions from coal plants and putting new limits on emissions, which angered Republicans who claimed it amounted to executive overreach. The White House says more unilateral moves to combat climate change are on the docket ahead of an international climate change conference in Paris next year.

Related: Obama says climate change deniers are “serious threat”

But like immigration, any major new laws designed to curb emissions would meet a quick end in the Republican controlled Senate. And with Republicans — some of whom deny that man-made climate change even exists — chairing key committees with oversight over Obama’s Environmental Protection Agency, the prospects for lasting change appear to have dimmed.

Closing Gitmo – His options are more limited

The chances of shuttering the Guantanamo Bay prison in Cuba through legislative action haven’t changed — they were slim before Tuesday and they’re slim now.

Republicans and Democrats alike on Capitol Hill are wary of signing off on a law that would permit Obama to transfer detainees from the facility to the United States. While other countries have agreed to accept certain prisoners, others are deemed too dangerous to release. The administration wants to find places in the U.S. to house them so the reviled Guantanamo Bay prison can be closed.

Without Congress’ approval, Obama would have to use his own executive authority to push through a change, a move that would undoubtedly prompt cries of overreach by lawmakers. But it would fulfill a promise that extends back to his first campaign for president.

Economy – He needs help from Congress

It’s two areas of economic policy — trade and tax reform — the White House believes could present the most potential for cooperation with a Republican Senate. But even there chances of new deals appear slim.

Two major trade deals, with Europe and about a dozen Asian countries, have been stalled while Senate Democrats refuse to offer so-called “fast track” authority to Obama to get the pacts hammered out. They’re worried the trade measures could ship jobs overseas. Republicans, however, have been more amenable to the plans as potentially a boon to U.S. business. Whether they and Obama can agree on the final plans depends largely on the two sides’ willingness to work together.

Likewise, tax reform is an issue both sides at least agree needs to be addressed. Obama and Republicans want to lower corporate rates and simplify the code. At one point, the White House and House Republicans were casting the issue as the key area of agreement should Congress fall into Republican hands.

But some key players are no longer around: Rep. Dave Camp, the Republican chairman of the House Ways and Means Committee and someone who was open to a tax deal with Obama, is retiring at the end of this Congress. That leaves open whether or not there’s still an opening to find a deal. If there is, it would form a major part of Obama’s legacy.

On Wednesday, Obama insisted the agenda he’s set for himself was still operative.

“The one thing that I’m confident about is that I’m going to be pretty busy over the next few years,” he said.

Lawmakers Fume Over Lost Emails in IRS Probe

June 14, 2014
WASHINGTON June 13, 2014 (AP)