Posts Tagged ‘Jeff Flake’

Trump casts doubt on success of China trade talks — European Union has become very spoiled

May 18, 2018
President Donald Trump said Thursday he doubted high-level trade talks with China this week would be successful because the Chinese have been treated too easily by past administrations. But he also struck a more optimistic tone in the same set of comments.

“The reason I doubt it is because China has become very spoiled,” Trump told reporters ahead of a meeting later Thursday with Chinese Vice Premier Liu He, who is leading the delegation in Washington for talks aimed at averting a trade war.

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US President Donald Trump and top Chinese trade negotiator Liu He

“The European Union has become very spoiled, other countries have become very spoiled because they’ve always gotten 100 percent of whatever they wanted from the United States,” Trump said.

Later he modified his comments, saying he believed the United States and China would be happy with their trade relations because of his tough approach.

Thursday’s face-to-face meeting with Liu shows Trump’s great interest in “trying to reach some remedies regarding unfair and illegal trading practices,” Larry Kudlow, director of the National Economic Council, told reporters earlier. “That’s what we want.”

Heading into this week’s meetings, China has indicated it would ease up on U.S. agriculture if the Trump administration rolls back criminal penalties on Chinese telecommunications giant ZTE – something Trump has already signaled he is willing to do, despite protests from both Republican and Democratic members of Congress.

Trump acknowledged he told Chinese President Xi Jinping he would look at easing the current 7-year ban on ZTE doing business with American companies after it was recently caught violating the terms of $1.19 billion penalty agreement announced last year. But he also defended his administration’s handling of the case.


“Don’t forget it was my administration, with my full knowledge, that put very, very strong clamps on ZTE,” Trump said. “It wasn’t President Obama. It wasn’t President Bush. It was me.”

However, the investigation that led to the record fine on ZTE was started during the Obama administration, even though the penalty for making illegal sales to Iran and North Korea was announced early in Trump’s tenure.

Obama administration officials said they spent two years making the case and were prepared to impose a $1.3 billion fine, but the Trump administration scaled it back.

“They did very bad things to our country. They did very bad things to our economy,” Trump continued. “The one thing I will say they also buy a very large portion of the parts for the phones that they make … from the United States. That’s a lot of business.”

“But anything we do with ZTE [is] just a small component of the overall deal,” Trump said. “I can only tell you this, we’re going to come out fine with China. Hopefully, China’s going to be happy. I think we will be happy.”

However, the House Appropriations Committee on Thursday unanimously approved an amendment to keep the sanctions in place, in one of sign of the difficulty Trump might have satisfying Xi on the issue.

Sen. Jeff Flake (R-Ariz.) also said Trump’s decision to use the sanctions on ZTE as a bargaining chip in negotiations with China was “deeply troubling.”

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“In essence, ZTE has repeatedly engaged in malign activity by deliberately misleading the government for years, all while attempting to deliver American technologies into the hands of state-sponsors of terrorism,” Flake said in a speech on the Senate floor.

Some observers fear that Trump — after promising to push for major changes in China’s industrial policies that put American companies at a disadvantage — is prepared now to settle for a short-term package aimed at significantly reducing the U.S. trade deficit with China, which increased last year to a record $375 billion.

Liu appears set to offer a two-year $200 billion-plus deficit reduction plan focused heavily on purchases of U.S. farm goods and energy products, but that would also shower dollars on as many as 20 other industry sectors, one source familiar with the talks said.

“It’s shaping up to be the art of the bad deal,” the source said. “The impression is the administration is caving or folding its tent after revving things up quite a bit.”

Liu’s visit comes as the Trump administration is moving ahead with plans to impose tariffs on around $50 billion worth of Chinese goods to pressure Beijing to do more to stop theft of American intellectual property and to change policies and practices that require U.S. companies to transfer technology to do business in China.

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China has responded to Trump’s tariff threat by vowing to strike back by raising duties on about $50 billion worth of agriculture, chemical and other goods.

In addition, Beijing has already imposed duties on about $3 billion of U.S. farm products, steel and other goods in response to Trump’s decision to slap an additional 25 percent duty on Chinese steel and 10 percent duty on Chinese aluminum.

U.S. officials initially told the Chinese that they’d be open to granting some relief from the pending tariffs in exchange for a commitment to reduce the trade deficit with China by $200 billion over two years, an administration official said Wednesday.

But the Chinese have countered with a proposal to buy $150 billion in U.S. products instead, though the talks are still very much in flux, the official said.

Neither the White House or the Treasury press office would comment on the prospects for the two sides to reach a deal that primarily involves Beijing writing a series of checks to make Trump happy, without addressing the systemic issues that drove Trump to threaten tariffs.

However, Kudlow indicated the U.S. still had a substantive list of demands it want Beijing to address.


Donald Trump Set to Sign Tariffs Decree Amid GOP Lawmakers’ Dissent

March 8, 2018

Plan would spare Canada and Mexico at the outset and they would remain exempt if new Nafta deal is reached

WASHINGTON—President Donald Trump is expected to sign a decree this week laying out his plan to impose new tariffs on steel and aluminum, sparing both Canada and Mexico, after people on both sides of the issue made final pleas to either scuttle the measure or ensure he doesn’t back off.

At the White House on Wednesday, aides began preparations for the ceremony ushering in a turn in trade policy that could recalibrate relations between the U.S. and its allies and trading partners.


WASHINGTON (AP) — Warning of economic fallout, congressional Republicans and industry groups pressed President Donald Trump on Tuesday to narrow his plan for across-the-board tariffs on imports of steel and aluminum. Trump appeared unmoved, declaring, “Trade wars aren’t so bad.”

The president said he planned to move forward with special tariffs on imported steel and aluminum, contending the U.S. has long been “mistreated” in trade deals.

“We’re doing tariffs on steel. We cannot lose our steel industry. It’s a fraction of what it once was. And we can’t lose our aluminum industry,” Trump said during a joint news conference with Swedish Prime Minister Stefan Lofven.

Hours later, White House economic adviser Gary Cohn, who has opposed the tariffs, announced his plans to depart the White House, another signal that the president intends to go through with the penalties.

The president’s pledge for action, which would be in line with a one of his campaign promises, came after House Speaker Paul Ryan of Wisconsin called for a “more surgical approach” that would help avert a potentially dangerous trade war. Senate Majority Leader Mitch McConnell of Kentucky said there was concern Trump’s plan could lead to such disruptive turmoil.

“We are urging caution,” McConnell said.

House Speaker Paul Ryan says he’s encouraged the White House may reconsider blanket tariffs on steel and aluminum as he urges President Donald Trump take a more “surgical” approach on China and other countries. (March 6)

Republican Sen. David Perdue of Georgia, who opposes the tariffs, said after meeting Tuesday with White House chief of staff John Kelly that the administration was willing to consider his views. “Absolutely. There’s an openness now,” Perdue said.

“I think there’s been a step back,” said Sen. Pat Roberts, R-Kan. “I don’t think he’s reconsidering, but I think he’s trying to figure out what his best step is forward.”

But those views sounded more like wishful thinking after Trump’s news conference, in which he reiterated his plans to impose the tariffs of 25 percent on steel imports and 10 percent on aluminum imports. He said he’d respond to unfair treatment by foreign countries and huge trade deficits. “We’re going to straighten it out and we’ll do it in a very loving way,” Trump said.

The president also reaffirmed the possibility that Canada and Mexico might not face the tariffs if they are willing to offer more favorable terms under the North American Free Agreement, which is being renegotiated.

Senior White House adviser Jared Kushner and staff from the State Department and National Security Council will be meeting Wednesday with Mexico’s president and foreign minister in Mexico City.

Treasury Secretary Steven Mnuchin told lawmakers Trump was trying to balance protections for beleaguered steel and aluminum producers while “making sure that we don’t do undue harm to the economy.”

“We are not looking to get into trade wars. We are looking to make sure that U.S. companies can compete fairly around the world,” Mnuchin said at a House hearing.

Trump has been keenly aware of how the tariffs may play in a March 13 special House election in western Pennsylvania, part of the nation’s steel belt, White House officials have said. The president is headlining a Saturday rally in support of Rick Saccone, who is battling Democrat Conor Lamb in the Republican-leaning district.

The dispute over tariffs has exposed a rift between advocates of free trade, who have long dominated GOP circles, and a president who has railed against China and pushed for more protectionist trade policies.

Internally, White House officials who oppose the blanket tariffs have urged the administration to limit the countries that would be affected and to impose time limits. This would help the president say he delivered on his promise and still try to avoid possible negative consequences, said Stephen Moore, a former campaign adviser and now an economist with the conservative Heritage Foundation.

Republicans in Congress and within Trump’s administration say industries and their workers who need steel and aluminum for their products would be hurt by Trump’s threatened tariffs. They say Americans will face higher costs for new cars, appliances and buildings if the president follows through on his threat and other nations retaliate.

Trump has said the tariffs are needed to preserve the American industries and protect national security. But he has also tried to use them as leverage in the current talks to revise NAFTA.

Business leaders are mobilizing against the tariffs. The Aluminum Association, a trade group representing 114 member companies with more than 700,000 U.S. jobs, told Trump in a letter Tuesday that it was “deeply concerned” about the effects of the planned tariffs and urged him to seek alternatives such as targeting China and other countries with a history of circumventing trade rules.

Ryan said Trump was correct to focus on the problem of the dumping of steel in the U.S. at lower prices. But he said the administration’s approach was “a little too broad and more prone to retaliation.”

“What we’re encouraging the administration to do is to focus on what is clearly a legitimate problem and to be more surgical in its approach,” Ryan said.

Republicans have suggested they may try to undercut the tariffs if Trump goes ahead with them. But Sen. Jeff Flake, R-Ariz., said he was doubtful the GOP majority would be able to muster the votes to pass legislation to block the special taxes.

Flake said it was tough to dissuade Trump because the president “keeps coming back like a homing pigeon on trade deficits.”

Mnuchin defended the possible tariffs, telling lawmakers that Trump “loves farmers and the farm community.” Rep. David Young, R-Iowa, responded, “It doesn’t seem so with some of the policies that are coming out.”

Mnuchin said the administration hopes to release details on the tariffs this week. “He does understand the potential impacts it has on the economy and I think we have a way of managing through this,” he said.


Associated Press writers Alan Fram, Kevin Freking, Martin Crutsinger and Josh Boak in Washington contributed to this report.

Senate to vote Monday on plan to reopen government — Schumer: we have yet to reach an agreement

January 22, 2018

Politico Staff


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Sens. Bob Corker (R-Tenn.), Lindsey Graham (R-S.C.) and Jeff Flake (R-Ariz.) talk to reporters as they exit a meeting with Senate Majority Leader Mitch McConnell on Sunday. Drew Angerer – Getty Images

Party leaders and rank-and-file senators spent all day Sunday haggling over a deal to reopen the government. But Washington’s painful shutdown will nonetheless drag into Day Three.

Shortly after 9 p.m. Sunday, Senate Majority Leader Mitch McConnell announced that the chamber would vote on a plan at noon Monday to fund the government through Feb. 8. In an attempted concession to Minority Leader Chuck Schumer, McConnell said he would take up legislation to protect some young immigrants from deportation if a deal to address their status is not reached by the time funding expires in early February.

But Democrats were not ready to call it a deal, even as McConnell implored the Senate to vote Sunday night to reopen the government. “The shutdown should stop today,” he said.

Schumer said further negotiations were needed and spurned McConnell’s request, pushing a vote until Monday, when hundreds of thousands of federal employees will be furloughed.

“Talks will continue, but we have yet to reach an agreement on a path forward that would be acceptable for both sides,” Schumer said.

The vote Monday is expected to fail absent further progress between the two party leaders before then.

Senate Republicans will have a conference meeting at 11 a.m. Monday to discuss the state of play, aides said.

The late-night exchange capped a furious round of negotiations Sunday between Schumer and McConnell, as well as a group of deal-making senators desperate to reopen the shuttered government. Senators from both parties took a proposal to the party leaders after the centrists met for 90 minutes on Sunday afternoon.

Their proposal would reopen the government through Feb. 8 and have McConnell commit on the Senate floor to holding an immigration vote before that date — a commitment that McConnell approached but did not definitively agree to, in part because Republicans worry they could not complete an immigration debate before the next funding deadline.

Keeping the shutdown going given McConnell’s stated goal of an immigration vote would be “counterproductive,” said Sen. Lindsey Graham (R-S.C.) as the Senate adjourned for the night. As for Democrats’ push for a more firm immigration commitment from the GOP leader, Graham suggested McConnell’s Sunday night statement would have to suffice: “I assume if we get a deal, it will be more formal.”

Sen. Jeff Flake (R-Ariz.), who along with Graham is meeting with roughly 20 senators in both parties, said he hoped the group would meet again.

After not speaking on Saturday, McConnell and Schumer met privately for more than 30 minutes on Sunday. Schumer, however, did not talk to the president, an aide said.

Flake said the Senate needs to move independently of the White House at this point to resolve the confrontation that’s produced the first shutdown in more than four years.

“The important thing is breaking with the White House on this and not relying on the White House to give its approval,” Flake said.

Despite his public thaw after two days of lashing Democrats, it remains to be seen whether McConnell can provide enough reassurance to Democrats to win their votes. Some Democrats said they need to know the House would take action on an immigration bill, too.

“We have to have in our own mind some way to ensure that the House feels a need to bring up the issue as well,” said Senate Minority Whip Dick Durbin (D-Ill.).

The centrists are eager to end the brinkmanship that has erupted at the one-year mark of Donald Trump’s presidency. Democrats insist that any funding legislation extend Obama-era protections for undocumented immigrants who came to the United States as children, while Republicans have said they won’t negotiate on immigration until the government reopens.

The group of roughly 20 moderates includes Sens. Lamar Alexander (R-Tenn.), Chris Coons (D-Del.), Joe Manchin (D-W.Va.), Susan Collins (R-Maine), Flake, Graham, Mark Warner (D-Va.), Lisa Murkowski (R-Alaska), Tim Kaine (D-Va.) and Jeanne Shaheen (D-N.H.).

Some liberals are still wary. They fear that Speaker Paul Ryan (R-Wis.) could repeat the exercise of 2013, when the Senate passed an immigration bill and the House didn’t take it up.

“It depends on whether it’s part of a must-pass bill. That is my strong preference. The goal is to have the [DREAM] Act passed,” said Sen. Richard Blumenthal (D-Conn.) in an interview. “I have no confidence, zero, in Paul Ryan bringing that bill to the floor.”

Republican leaders are also skeptical. They believe committing to an immigration vote would just throw Democrats a lifeline and prefer to negotiate on the Deferred Action for Childhood Arrivals program only after the government reopens.

“Does that mean if we have an agreement by [Feb.] 15 that that’s not good enough?” Senate Majority Whip John Cornyn (R-Texas) said of the plan to hold an immigration vote by Feb. 8. “I just think people are nervous because they shut down the government and are looking for face-saving.”

Still, McConnell listened to the presentation by a group of GOP senators to allow such a vote by Feb. 8. He thanked those Republicans on the floor Sunday evening.

So far, House Republican leaders have rejected the idea of committing to holding an immigration vote on the House floor and are refusing to negotiate on anything beyond a three-week continuing resolution. Ryan said Sunday the House will accept a short-term bill through Feb. 8 but will commit only to an immigration bill “that the president supports to fix this problem.”

Lawmakers had hoped to reach a deal before Monday, when federal employees would normally return to work, to lessen the impact of the shutdown.

Though negotiations in the Senate gained some traction, both parties continued to execute their public relations strategies. Democrats blasted Trump, blaming him for walking away from an immigration deal with Schumer on Friday that they say could have prevented the shutdown.

“How can you negotiate with the president under those circumstances where he agrees face-to-face to move forward with a certain path and then within two hours calls back and pulls the plug?” Durbin said on ABC’s “This Week with George Stephanopoulos.”

Schumer offered Trump support for the border wall in exchange for a deal to protect the nearly 700,000 so-called Dreamers facing deportation. But since then, Republicans and Democrats have publicly sparred over whether Schumer was offering full funding for the wall or not.

Republicans, meanwhile, accused Democrats of taking “hostages” in order to strong-arm the GOP into an immigration deal that has eluded Congress for years.

“This is the Democrats trying to hold our military hostage for an issue that has been with us for decades,” House Freedom Caucus Chairman Mark Meadows (R-N.C.) said on ABC. “I think we need to resolve it — the president wants to resolve it — but you don’t do that in the middle of a shutdown.”

But even Republicans seemed uncomfortable defending a Trump campaign ad saying Democratic leaders would be “complicit” in murders committed by undocumented immigrants during the shutdown. Republican leaders know they will need Democratic cooperation to break the shutdown logjam.

“I don’t know if that’s necessarily productive,” Ryan said of the Trump ad.

So far, Trump has not called for a meeting with the “Big Four” congressional leaders — McConnell, Schumer, Ryan and House Minority Leader Nancy Pelosi (D-Calif.) — and Republicans on the Sunday news shows gave no indication he would do so. But White House legislative affairs director Marc Short said Trump has been in touch with GOP leaders throughout the weekend.

“The president has been involved,” Short said on NBC’s “Meet the Press.” “Yesterday he was speaking to Leader McConnell, Leader Ryan. He also spoke to Kevin McCarthy.”

John Bresnahan and Rachael Bade contributed to this report.


Flake Says Trump’s Fake News Claims as Damaging as Stalin’s

January 15, 2018


ByChris Strohm

  • President ‘reflexively’ brands press as enemy, lawmaker says
  • GOP Arizona senator plans to deliver floor speech this week
Senator Jeff FlakePhotographer: Andrew Harrer/Bloomberg

Arizona Republican Senator Jeff Flake plans to compare President Donald Trump’s repeated attacks on the media to those made by Joseph Stalin, the infamous dictator of the former Soviet Union, in a speech this week.

“When you reflexively refer to the press as the enemy of the people or fake news, that has real damage,” Flake said Sunday in an interview on ABC’s “This Week.”

“And then now, today, you have authoritarians across the world using the term ‘fake news’ to justify cracking down on their opposition or — or stanch legitimate debate,” Flake said. “That’s nothing we should be proud of.”

Flake said he’ll expand on the Trump-Stalin comparison during a speech on the Senate floor, probably on Jan. 17. That’s the same day that Trump announced he’ll give out awards to media outlets he claims are producing “fake news.”

“The Fake News Awards, those going to the most corrupt & biased of the Mainstream Media, will be presented to the losers” on Jan. 17, Trump said in a Jan. 7 Twitter message. “The interest in, and importance of, these awards is far greater than anyone could have anticipated!”

The president has repeatedly railed against what he says is fake news. In February, he called the media “enemy of the people” in a tweet.

Forbade by Khrushchev

“The FAKE NEWS media (failing @nytimes, @NBCNews, @ABC, @CBS, @CNN) is not my enemy, it is the enemy of the American People!” Trump wrote.

“It bears noting that so fraught with malice was the phrase ‘enemy of the people,’ that even (later Soviet leader) Nikita Khrushchev forbade its use, telling the Soviet Communist Party that the phrase had been introduced by Stalin to for the purpose of ‘annihilating such individuals’ who disagreed with the supreme leader,” Flake will say in his Senate speech, according to NBC News, citing excerpts provided.

In addition to his regular claims of “fake news,” Trump attempted this month — through a cease-and-desist order sent by an attorney — to halt publication of a book critical of him and his administration, Michael Wolff’s “Fire and Fury: Inside the Trump White House.”

Flake has been a vocal critic of the president in recent months. The first-term senator announced in October that he won’t seek re-election in 2018. In November, Trump tweeted that Flake, whom he called “Flake(y),” was “unelectable” and had quit the race amid “anemic polls.”

In response to Trump’s planned awards, the Committee to Project Journalists, a nonprofit organization that promotes press freedoms worldwide, announced a “Press Oppressors” awards list on Jan. 8. The president was named as a winner along with Turkish President Recep Tayyip Erdogan, Russian President Vladimir Putin, and others.

Republicans Feel Triumph, Fear Tragedy

December 4, 2017

Tax plan, Mueller’s Russia probe help produce two potential divergent paths

President Trump speaking to reporters at the White House Monday morning.
President Trump speaking to reporters at the White House Monday morning. PHOTO: JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES

In the era of President Donald Trump, when up can be down and down can be up, it’s no surprise that the Republicans’ hour of great accomplishment also is their hour of great peril.

That is precisely where things stand as a new week dawns upon a thoroughly changed political landscape. Washington’s tectonic plates shifted twice last week, first when special counsel Robert Mueller announced a guilty plea from a now-cooperative former Trump national security adviser, Mike Flynn, and then when the Republican Senate passed the party’s top legislative priority, a giant tax cut.

(And by the way, passage of a tax bill by the full Congress, which now seems assured in coming days, was always the highest priority for most Republican leaders, outstripping even repeal of the Affordable Care Act.)

The Republican establishment’s bargain with Mr. Trump always has been essentially this: It is worth putting up with his excesses and an undercurrent of mutual mistrust because ultimately he would promote and then sign the Republicans’ long-sought tax cut. The benefits of the latter would outweigh the dangers of the former.

Now the test of that proposition begins. Will it go well or badly for the GOP? Let’s look at the two potential scenarios for the party:

The Positive Scenario:

The tax cut and its benefits for American businesses extend and solidify already-robust economic and job growth. The prospect, and ultimately the reality, of greater business investment send positive ripple effects into wage growth. All that builds a firmer footing beneath a booming stock market.

Politically, the tax bill erases 11 months of doubts about Republicans’ ability to govern effectively and washes away the party faithful’s memories of failed efforts to undo the health law, known as Obamacare, and the concurrent exposure of deep intraparty divisions.

Moreover, it’s clear that Mr. Trump’s barbs directed at senior members of his own party—Senate Majority Leader Mitch McConnell, Sens. John McCainJeff Flake and Bob Corker, and House Speaker Paul Ryan —don’t get in the way of the GOP uniting for something really important. The idea that Republicans can repeat that feat in 2018 on health and infrastructure doesn’t seem so far-fetched.

In short, the first year of the Trump presidency suddenly looks a lot better, which sets the table nicely for the 2018 midterm elections. Republican plans to make Democratic House leader Nancy Pelosi rather than Mr. Trump the unpopular face of the election year succeed. Republicans suffer some losses in House races but retain control of Congress.

Meanwhile, the Mueller investigation picks off a few more figures around Mr. Trump but never quite proves either collusion with Russians or a presidential effort to obstruct justice. Mr. Trump manages to avoid stirring the pot with Twitter rants that actually make his case worse, and the inquiry wraps up early next year having struck blows but no fatal damage.

The Negative Scenario:

Middle-class Americans revolt against the tax bill, concluding that they agree with Democrats that the rich and corporations are the real beneficiaries, not them. Middle America also is frightened and then appalled by the tax bill’s coming boost to the national debt, and Trump voters decide the party and the president they supported in 2016 don’t share their common-sense aversion to running up big bills and leaving them for the kids.

Meantime, a failure to agree on a new spending bill forces a government shutdown just before Christmas, and the GOP fails to put the blame off on Democrats. That instantly sullies Republicans’ newfound reputation for governing effectively.

Corporate leaders don’t make the kinds of job-creating investments Republicans predict. Meanwhile, the tax cut’s stimulative effect overheats an economy already near full employment, pumps up an overextended stock market and compels the Fed to keep raising interest rates. The bubble bursts.

The Obamacare infrastructure also collapses in 2018, and Republicans now are the party bearing the blame for health-market chaos.

Something bad for Republicans happens in Alabama’s special Senate race next week. Either a victory by party nominee Roy Moore, who takes on those party leaders who disowned him over allegations of sexual misconduct involving teens, which he has denied, or a shocking Deep South victory by his opponent cascades into momentum for Democrats in 2018.

Mr. Mueller uses information from Mr. Flynn and others to carry his inquiry deep into the Trump circle. Two potential nightmare scenarios for the White House emerge: Trump world financial entanglements with Russians gave the Kremlin leverage over the eventual president, and it’s shown Mr. Trump obstructed justice to stop investigators from finding out. Mr. Trump, feeling the pressure from Mr. Mueller, becomes ever more defensive and wedded to conspiracy theories that he vents on Twitter, as he did over the weekend. Impeachment by a Democratic House becomes a possibility.

Either scenario is entirely plausible, which says plenty about today’s volatile climate.

Write to Gerald F. Seib at

Senate Passes Sweeping Revision of U.S. Tax Code

December 2, 2017

Republican-backed plan lowers corporate rate to 20% and reduces individual rates

Senate staff talk on the first floor of the Capitol in Washington on Friday.
Senate staff talk on the first floor of the Capitol in Washington on Friday. PHOTO: ALEX EDELMAN/ZUMA PRESS

WASHINGTON—The Senate passed sweeping revisions to the U.S. tax code past midnight Saturday after Republicans navigated a thicket of internal divisions over deficits and other issues to place their imprint on the economy.

The bill, which included about $1.4 trillion in tax cuts, would lower the corporate rate to 20% from 35%, reshape international business tax rules and temporarily lower individual taxes. It also touched other Republican goals, including opening the Arctic National Wildlife Refuge to oil drilling and repealing the mandate that individuals purchase health insurance, which would punch a sizable hole in the 2010 Affordable Care Act. But some objectives, such as repealing the alternative minimum tax, fell by the wayside in last-minute wrangling.

“In the end it all came together and we’re pretty excited about what we’ve been able to accomplish for the American people,” Senate Majority Leader Mitch McConnell (R., Ky.) said in an interview Friday. “We’ve got a corporate rate at 20% that we think makes us competitive in the world again and provided substantial middle-income tax relief.”

The bill passed 51-49, with all but one Republican voting for it and all Democrats voting against. The sole Republican, Sen. Bob Corker of Tennessee, stated his opposition before the vote, citing worries it would expand budget deficits.

The bill’s ultimate passage would mark a legislative victory for President Donald Trump and his fellow Republicans. Mr. Trump has made the tax overhaul a centerpiece of his economic policy goals, focusing on a rewrite of business taxes, which he has argued make the U.S. uncompetitive internationally. The bill could also give lawmakers something to campaign on in the 2018 midterm elections.

Democrats blasted the bill, calling it an unacceptable giveaway to corporations and the wealthy. They also criticized last-minute Republican adjustments and waved handwritten amendments around the Senate floor to show how hastily the changes were being made.

“A flurry of last-minute changes will stuff even more money into the pockets of the wealthy and the biggest corporations while raising taxes on millions in the middle class,” Sen. Chuck Schumer of New York, the chamber’s Democratic leader, said.

The House and Senate still need to reconcile competing versions of the tax plan, something GOP leaders hope to do by Christmas. The House and Senate bills overlap in many ways, and lawmakers expressed optimism about getting a final deal done.

“The bills are not all that different,” Mr. McConnell said. “We tried to move ours somewhat in the House direction.”

Senate Republicans called their bill an economic booster shot, their best chance to create faster sustained growth and higher wages. But it comes with risks. Congress’s own nonpartisan analysis found that the economic benefits would be modest and fade over time.

The Joint Committee on Taxation estimated that the tax cuts wouldn’t pay for themselves, as Republicans promised. Instead the analysis found they would increase deficits by $1 trillion over a decade, even after accounting for economic growth.

Reconcile This

The House and Senate tax bills differ in some important ways which will need to be sorted out in a conference committee of lawmakers from both chambers before final passage.

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Investors, for now, are more excited about the prospect of lower corporate taxes than about the risks associated with larger government deficits. The Dow Jones Industrial Average rose 673.60 points for the week, or 2.9%, to 24231.59. Yields on 10-year Treasury notes, which might be expected to rise if bond investors were worried about deficits, remain comfortably low, below 2.5%.

Senators began voting on amendments late Friday night and that continued into early Saturday. They defeated, 29-71, an attempt by Sen. Marco Rubio (R., Fla.) and Mike Lee (R., Utah) to expand the child tax credit for low-income families, which would have been paid for by setting the corporate tax rate at 20.94%.

Vice President Mike Pence broke a tie in favor of a proposal from Sen. Ted Cruz (R., Texas) to allow the use of 529 savings accounts to pay for elementary and secondary school costs, including private-school tuition.

Saturday’s vote came after a week of long hours and frantic rewriting and deal-making. The GOP tax effort wobbled late Thursday after the Joint Committee on Taxation analysis raised the concerns of budget hawks about deficits. An attempt to add deficit countermeasures in the bill failed to clear parliamentary rules.

Mr. McConnell and his team salvaged the measure with a series of last-minute deals to sway wavering senators.

Sens. Steve Daines (R., Mont.) and Ron Johnson (R., Wis.) won bigger tax breaks for pass-through businesses such as partnerships and S corporations. Sen. Jeff Flake (R., Ariz.) secured more aggressive depreciation rules to encourage business investment after 2022.

Sen. Bob Corker (R. Tenn.) speaks to members of the media at the Capitol in Washington on Friday.
Sen. Bob Corker (R. Tenn.) speaks to members of the media at the Capitol in Washington on Friday.PHOTO: ALEX WONG/GETTY IMAGES

Sen. Susan Collins (R., Maine) scored a $10,000 deduction for property taxes, an expanded but temporary deduction for people with large medical expenses, and a promise of future bipartisan health-care legislation to mitigate the effects of repealing the individual health-insurance mandate.

“This bill will provide much-needed tax relief and simplification for lower- and middle-income families, while spurring the creation of good jobs and greater economic growth,” Ms. Collins said.

To help pay for some of those changes, Republicans increased a new tax on companies’ stockpiled foreign profits to 14.5% for cash and 7.5% for illiquid assets, from 10% and 5% in a previous version.

Senate Republicans abandoned other goals. They preserved the alternative minimum tax instead of repealing it. They backed off a plan to abolish the estate tax. They retained seven tax brackets instead of collapsing them into three as planned. And after years of warning about the rising national debt and promising a tax overhaul that would be revenue-neutral, they chose to proceed despite warnings the measure would add to deficits in the long run.

Lawmakers released the final changes—moving around hundreds of billions of dollars—a few hours before the last vote, and there was no updated analysis of the bill’s impact on taxpayers and the economy as Republicans moved toward voting on it.

“The Republicans have managed to take a bad bill and make it worse. It was chock-full of special-interest giveaways before tonight,” Mr. Schumer said.

The bill would overhaul much of the U.S. tax system in ways that tax experts are only beginning to understand.

Mr. Trump and some Republicans set the 20% corporate tax rate as an immovable objective and despite some occasional doubts, the GOP stuck with it. That is a win for domestic retailers and manufacturers who have spent years building the political case for a lower tax rate.

Pass-through firms, which pay their business taxes through individual returns rather than corporate returns, won major concessions. They would get a 23% deduction from individual rates. More than half of U.S. business income goes to pass-throughs, and more than half of that goes to the top 1% of households.

Tax analysts said this deduction opens new and unprecedented avenues for tax avoidance, with individuals likely seeking to declare as much of their income as possible as lower-taxed business profits.

Even in a bill that provides sizable tax cuts to many, some taxpayers are set to lose. The bill would prevent individuals from deducting state and local income taxes. That is likely to raise federal taxes on upper-middle-class wage earners in high-tax states, such as California, Connecticut, Maryland, New Jersey and New York. They are all represented by Democrats in the Senate.

The standard deduction would be nearly doubled and the child tax credit would rise, while personal exemptions would be repealed. For many households, that combination would modestly increase the amount of earnings that aren’t subject to income tax.

The bill also would push millions of households out of itemizing deductions. That would reduce the incentive to deduct mortgage interest and charitable contributions. But nonprofits, home builders and real-estate agents were unable to sway Republicans to reverse course on the measure.

Debt-reliant businesses would lose, too, under a provision that limits interest deductions to 30% of income.

Republicans said those changes were necessary to lower the rate and make other changes that would encourage investment in the U.S.

“The reforms that we make in this bill allow American companies to compete and win against those other countries around the world,” Sen. John Thune (R., S.D.) said.

Write to Richard Rubin at and Siobhan Hughes at


Senate passes Republican tax plan in major win for Trump and party leaders

December 2, 2017

By  Erica Werner and Damian Paletta
The Washington Post

December 2 at 1:51 AM

Senate Republicans passed a $1.5 trillion tax bill early Saturday morning that bestows massive benefits on corporate America and the wealthy while delivering mixed blessings to everybody else.

After a frantic round of negotiations, Republicans came together in near unanimity behind the landmark legislation. The final vote was 51 to 49, with Sen. Bob Corker (R-Tenn.) the lone GOP holdout. Democrats unanimously opposed the bill.

The measure still has to be reconciled with an earlier House-passed version before being sent to President Trump. Yet in getting the bill through the Senate, Republicans succeeded where they failed earlier this year, when their efforts to repeal the Affordable Care Act collapsed in mortifying fashion.

This time, urged on by donors and fearful of facing voters in next year’s midterm elections without a legislative achievement to show, Republicans said time and again that failure was not an option.

“The American people wanted change,” said Sen. John Barrasso (R-Wyo.). “We were able to deliver.”

The centerpiece of the GOP plan is a move to lower the corporate tax rate from 35 percent to 20 percent, starting in 2019. The Senate tax bill would also temporarily cut tax rates for families and individuals until 2025.

But the bill would kill a number of tax benefits. It would subject fewer people to the estate tax, a levy charged on massive inheritances, but stop short of eliminating that tax altogether.

The most recent review of the bill by the Joint Committee on Taxation, Congress’s nonpartisan tax analysts, found that only 44 percent of taxpayers would see their burden reduced by more than $500 in 2019 but that high earners would fare much better than the poor under the bill.

And the bill makes other changes that reach far beyond the tax code itself. It repeals the individual mandate from the Affordable Care Act, a major change that was added in recent weeks as part of a broader GOP effort to dismantle the Obama-era law. The individual mandate creates penalties for many Americans who don’t have health insurance, but the repeal would leave 13 million more people uninsured. It authorizes oil drilling in the Arctic National Wildlife Refuge in Alaska. And by curtailing deductions for state and local taxes, it will put pressure on some state and local spending on education, transportation and public health programs.

The tax package still must clear a couple more hurdles before it can become law. There are numerous differences between the House and Senate versions, ranging from when certain tax cuts expire to how the estate tax is handled, and though none are seen as show-stoppers, complications could arise. There will be major implications for the taxes paid by families and individuals based on how those discussions go. And the negotiations over the tax bill will proceed as Congress simultaneously faces a Dec. 8 deadline for government funding to expire.

Nonetheless, GOP leaders still aim to get a final bill on Trump’s desk before Christmas.

U.S. Sen. Ron Johnson talks to reporters after a vote in the Senate on Nov. 30 in Washington. (Mark Wilson/Getty Images)

For Trump, a victory on the tax plan would stand as a signal triumph, in sharp contrast with the political troubles besetting the White House on other fronts, especially with the Senate action coming on the same day that former national security adviser Michael Flynn pleaded guilty to lying to the FBI about his contacts with the Russian ambassador.

In a span of hours Friday, Senate GOP leaders secured the final few votes they needed, from Sens. Ron Johnson (R-Wis.), Jeff Flake (R-Ariz.) and Susan Collins (R-Maine).

The concessions made to get them on board forced GOP leaders to add more than $250 billion in tax cuts for individuals and businesses to their plan. To offset some of these costs, they had to abandon efforts to fully repeal the alternative minimum tax for individuals and companies, instead scaling it back.

The AMT was put in place in the 1980s as a way to prevent wealthier Americans from using tax deductions to avoid paying taxes.

Flake announced his “yes” vote after he said he had secured leadership backing for two priorities: one related to how businesses can deduct major investments like equipment purchases and the second involving a solution for immigrants brought illegally to the United States as children.

“Having secured both of those objectives, I am pleased to announce I will vote in support of the tax reform bill,” Flake said in a statement.

Flake said his deficit concerns were allayed by a new approach to the bill’s expensing deduction, which allows businesses to write off the full cost of investments in equipment and facilities. The change calls for gradually phasing out the break after five years instead of abruptly canceling it. That adds $34 billion to the cost of the bill, but Flake said it would save money in the longer term by making lawmakers less likely to extend the break in the face of pressure from business interests.

Flake also said the administration and Senate leaders had agreed to work with him toward a resolution for immigrants brought illegally to this country as children. Known as “dreamers,” these immigrants were granted temporary protections under the Obama administration, which Trump has announced he will revoke in March.

Flake is a longtime proponent of reforming immigration laws and wants permanent protections for dreamers. He said Vice President Pence had committed to working with him on the issue, though without offering a timeline or a specific solution.

Johnson came on board after leadership sweetened the deal for certain businesses whose owners pay taxes through the individual code rather than at corporate rates. Johnson retains partial ownership in one such “pass-through” business, and the issue has been a key concern.

“I appreciate the Senate leadership’s willingness to work to close the gap between pass-through businesses and C corporations,” Johnson said. The term C corporations refers to those businesses that file their taxes on the corporate side of the code.

Senate GOP leaders had proposed allowing pass-through owners to deduct 17.4 percent of their income from their taxes and then pay taxes on the remaining income. Johnson and Sen. Steve Daines (R-Mont.) argued for days that this was not generous enough for these businesses, and GOP leaders reluctantly raised the deduction level to 20 percent, which added roughly $60 billion to the size of the tax cut. But Johnson continued holding out, and on Friday he said the deduction had been raised to 23 percent, securing his support.

That meant that he and Daines were able to extract $114 billion in tax cuts for these firms in just a few days.

Collins said leadership had promised her the bill would protect certain deductions individuals use to lower their tax bills, including on matters related to medical expenses and tax payments to state and local governments. Collins also said leadership had agreed to support passing two bipartisan bills to help stabilize the health insurance system set up under the Affordable Care Act.

Senate leaders had little margin for error, since they can lose only two GOP votes and still prevail in the closely divided chamber. Democrats are unanimously opposed to the bill, and took turns Friday delivering scorching floor speeches slamming it as a giveaway to the rich.

And as evening wore into night Friday with Republicans still fine-tuning the final language of the bill, Democrats exploded in outrage when Sen. Claire McCaskill (D-Mo.) said she received a list of planned changes from a lobbyist and not from Republicans in the Senate who were keeping all their decisions closely held.

A few minutes later, a 479-page draft of the changes leaked out to the public. It included several pages of hand-written changes to the bill. Democrats, who were effectively powerless in trying to stop the bill’s passage, tried to cast the last-second changes as boondoggles for corporations which had not been debated or explained.

Some of the hand-written changes were crammed in the margin and hard to decipher.

Sen. Jon Tester (D-Mont.) posted a video of himself on Twitter acting incredulous as he slammed the bill down on a table.

“This is your government at work,” he said in disgust.

Friday’s progress was a turnaround for Republicans after the bill hit snags Thursday. An unfavorable economic analysis had inflamed Corker, who was demanding assurances that the bill will not add to the deficit. Corker wanted a “trigger” added to the bill to kick in and raise rates if growth projections weren’t met, but the Senate parliamentarian ruled his plan unworkable under the complex rules governing the legislation.

The result was a tense standoff Thursday evening, as Johnson, Flake and Corker threatened a last-minute objection to stop the tax bill from passing. This forced GOP leaders to scramble to try to accommodate some of their concerns, before the lawmakers finally relented.

Negotiations went through the night, but on Friday it emerged that Corker’s demands had not been met. There will be no “trigger” in the bill, nor any other mechanism to make up for a $1 trillion deficit increase that congressional scorekeepers say will result from the bill, even when taking into account economic growth.

Corker was grim-faced as the outcome became clear.

“I am disappointed. I wanted to get to yes,” he said in a statement. “But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations.”

Sen. James Lankford (R-Okla.), who had also pushed to address deficit issues, said he was disappointed there would be no mechanism to do so but insisted the bill would produce more growth than most analysts have suggested.

“I think it’s a stronger bill with a safety net, the just-in-case piece. But that’s not what we have,” Lankford said. “I’m going to be ‘yes’ either way. It’s walking the tightrope with a net or without a net. You prefer to have a net, but I think it’s going to work.”

With the bill on the floor, senators offered amendments from both sides Friday, but they were largely disposed of in predictable partisan fashion.

GOP leaders had feared trouble from an amendment pushed by Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) to further expand the child tax credit for low-income families. To do so, they proposed slightly increasing the corporate tax rate, moving it back up to 22 percent, a change opposed by fellow Republicans. GOP leaders were concerned Democrats would vote for the amendment and that it would pass, creating a new headache for leadership.

But in the end the Rubio-Lee amendment failed by a wide margin, 71-29. Rubio and Lee had scaled their measure back in an effort to draw GOP support, but that didn’t work. Instead they drove away Democrats, who were mostly not eager to add a bipartisan veneer to a bill they oppose anway. A more robust Democratic version of the amendment also failed.

There was a moment of drama during amendment debate over a measure by Sen. Ted Cruz (R-Texas) to bring the Senate bill in line with the House version by expanding the use of education savings accounts to allow them to apply to expenses for religious schools and homeschooled students. The amendment stood at a vote of 50-50 after Collins and Sen. Lisa Murkowski (R-Alaska) joined all Democrats in voting “no.” Vice President Pence was summoned and broke the tie in favor of Cruz.

Republicans on Verge of Passing Tax Bill

December 2, 2017

RIGHT NOW Senate begins debate as Republicans release revised tax bill with significant changes.

• Senator Mitch McConnell, the majority leader, said “we have the votes” and Republicans expect the legislation to pass.

• Democrats are crying foul over getting a revised, nearly 500-page bill just hours before being asked to vote on it.

• The revised bill includes a significant number of changes, including a modified version of the alternative minimum tax on wealthy individuals.

• Senator Susan Collins of Maine said she has secured the changes she needs to vote yes. For example, the bill will now include a $10,000 deduction for state and local property taxes.

• Three previous Republican holdouts — Senators Jeff Flake of Arizona, Steve Daines of Montana and Ron Johnson of Wisconsin — threw their support behind the bill.

• An effort by Senator Bob Corker of Tennessee to include future tax increases to offset the deficit impact of the bill was rejected by Senate leadership, prompting Mr. Corker to say he is unable to support the legislation.

GOP Says It Has Enough Votes to Pass Senate Tax Bill

December 1, 2017

Sen. John Cornyn says party has 50 votes after Sens. Ron Johnson and Steve Daines signal support

Sen. Steve Daines (R., Mont.) on Capitol Hill in Washington on Nov. 27.
Sen. Steve Daines (R., Mont.) on Capitol Hill in Washington on Nov. 27. PHOTO: J. SCOTT APPLEWHITE/ASSOCIATED PRESS

WASHINGTON—Senate Republican leaders said they were poised to pass their tax bill as soon as today after a flurry of late deal-making won over wavering senators.

Sens. Ron Johnson (R., Wis.) and Steve Daines (R., Mont.) backed the bill after securing larger tax cuts for pass-through businesses such as partnerships and S corporations.

Sen. John Cornyn (R., Texas) said Republicans have the 50 votes they will need to pass the bill and Sen. Bob Corker (R., Tenn.), a possible no vote, said the bill will probably pass.

Ron Johnson (R., Wisc) on Capitol Hill in Washington on Nov. 30.
Ron Johnson (R., Wisc) on Capitol Hill in Washington on Nov. 30. PHOTO: MICHAEL REYNOLDS/EPA-EFE/REX/SHUTTERSTOCK

Republicans haven’t released the details or scheduled a vote.

Mr. Johnson and Mr. Daines had earlier stopped short of offering their support for the tax bill, holding out for better treatment for “pass-through” entities like partnerships and limited liability companies that pay taxes through returns of individual owners. Under an agreement reached with Senate Republican leaders, pass-throughs that qualify for the special treatment will now have a top rate of just under 30%.

Their plans to vote for the tax bill were outlined by aides to both men. Republicans were still negotiating early Friday with deficit hawks including Sens. Corker and Jeff Flake (R., Ariz.) for a way to rein in deficit, as well as Susan Collins (R., Maine), who had been optimistic about coming around to the bill, but who had some demands that needed to be satisfied.

Sen. Collins said she has made no announcement or decision on the tax bill.“We’re making very good progress,” she said as she headed toward a meeting of GOP senators.

Republicans started Friday in better shape than the night before.

On Thursday, the nonpartisan Joint Committee on Taxation released an analysis stating the Senate plan wouldn’t meet the party’s goal of paying for itself through stronger economic growth. The bill would generate $458 billion in revenue from economic growth and add an extra $51 billion over a decade in interest payments, leaving the net cost of the bill at about $1 trillion over a decade, the JCT analysis found.

That report left GOP leaders scrambling to lasso the 50 votes they need to pass the measure as they tried to come up with a way to placate senators concerned about budget deficits. Republicans have 52 seats in the chamber.

Their first attempt to placate the deficit hawks, including Messrs. Corker and Flake, fell short due to procedural challenges. They had wanted to add into the bill a trigger that would set tax increases to kick in if projected growth didn’t materialize. But that ran afoul of the Senate parliamentarian, and Thursday evening Senate leaders halted votes on the bill.

The list of Republicans who still haven’t cemented their support for the tax bill has narrowed to include Ms. Collins, Mr. Corker, and Mr. Flake. Other senators being watched were Marco Rubio of Florida and Mike Lee of Utah, who want to make a child tax credit more generous, and James Lankford of Oklahoma.

Mr. Johnson also won agreement for rules to make it easier for pass-through entities to make a transition into corporations, an aide said. The Senate tax bill aims to cut the corporate tax rate from 35% to as low as 20%. The new rate was still being negotiated.

The changes sought by Messrs. Johnson and Daines would be offset by broadening the business tax base, a GOP aide said.

Write to Siobhan Hughes at, Richard Rubin at and Kristina Peterson at

Uncertainty looms over Senate’s tax bill

December 1, 2017