Senate starts debate on budget, pushing forward with tax reform: Senate Republicans are pushing forward with a budget that is key to accomplishing their goal of passing tax reform this year.
Senators voted 50-47 to start debate on the fiscal year 2018 budget, which includes instructions allowing Republicans to avoid a Democratic filibuster when they pass their tax plan.
With a 52-seat majority, Republicans could only afford to lose two senators, if every member of the Democratic caucus votes no, to pass the budget with Vice President Pence breaking a 50-50 tie.
Sen. Rand Paul (R-Ky.) voted to start the debate Tuesday after blasting a pair of the Senate’s defense hawks over the budget.
But the budget is almost certain of passing after two developments on Tuesday.
The Hill’s Jordain Carney explains: http://bit.ly/2yrTAAt.
Cochran returns to Senate: Sen. Thad Cochran (R-Miss.) returned to Washington on Tuesday after spending weeks on medical leave, easing pressure on Senate Republicans as they push to pass their budget resolution.
“I am pleased to be back in Washington where I look forward to continuing work on the 2018 appropriations bills and to taking part in the debate on the budget and tax cuts. I appreciate all the support and kind words I received while at home,” Cochran said in a statement released by his office.
Cochran’s absence had raised concern that Senate Republicans would struggle to advance their budget, a crucial step in the legislative strategy to pass tax reform.
Without Cochran, the GOP’s narrow 52-vote majority in the Senate left little room for error: http://bit.ly/2yvmW2M.
And McCain to vote yes on budget: Sen. John McCain (R-Ariz.) said Tuesday that he intends to vote for the 2018 budget resolution, all but assuring that the measure will pass without incident this week.
McCain had been holding out support based on an insistence that defense spending increase by billions of dollars.
“For too long, draconian budget cuts to the military have crippled readiness and put the lives of our service members in danger,” McCain said in a statement. “At the end of the day, we all know that the Senate budget resolution will not impact final appropriations.” http://bit.ly/2yQxHOu
Bannon becomes threat for Senate Republicans on taxes: Steve Bannon is becoming a problem for Republicans on tax reform.
President Trump’s former chief strategist is threatening to support right-wing opponents to every GOP senator up for reelection, aside from Sen. Ted Cruz (R-Texas).
He argues that GOP senators are falling short in enacting the Trump agenda, blasting Senate Majority Leader Mitch McConnell (R-Ky.) and his conference over the failure to repeal ObamaCare.
If the GOP follows up with another loss on tax reform, Republican senators know it will just give Bannon more ammunition to use against them.
“There’s one antidote to Steve Bannon: success,” Sen. Lindsey Graham (R-S.C.) told reporters on Tuesday.
A win on tax reform could quiet Bannon, Graham suggested. http://bit.ly/2gqZe1q
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On tap tomorrow
CNN hosts a town hall debate on taxes with Sens. Bernie Sanders (I-Vt.) and Ted Cruz (R-Texas).
Trump, GOP play defense in middle-class tax cut pitch: The Trump administration is pushing back against criticism from Democrats that its tax-reform plan will be a boon for the rich, casting the GOP bid to slash corporate taxes as a win for workers.
The White House has reason to worry that arguments made by Democrats and other critics are resonating. A CBS News poll released Sunday found 58 percent believe Republicans’ tax proposals would favor the wealthy, with just 18 percent saying it would favor the middle class.
President Trump emphasized the middle class in comments on the tax effort on Monday.
“We want to make sure that the middle class is the biggest beneficiary of the tax cuts and tax reform,” Trump said in remarks to reporters.
He also said his efforts are focused at the middle class in a speech last week in Pennsylvania.
“It’s a middle-class bill. That’s what we’re thinking of. That’s what I want,” Trump said, adding that wealthy people have told him that they want the tax plan to focus on middle-income families rather than themselves. The Hill’s Naomi Jagoda reports: http://bit.ly/2yt8syz.
IRS: ‘Significant’ number of Equifax victims already had info stolen: The IRS does not expect the Equifax data breach to have a major effect on the upcoming tax filing season, Commissioner John Koskinen said Tuesday, adding that the agency believes a “significant” number of the victims already had their information stolen by cyber criminals.
“We actually think that it won’t make any significantly or noticeable difference,” Koskinen told reporters during a briefing on the agency’s data security efforts. “Our estimate is a significant percent of those taxpayers already had their information in the hands of criminals.”
The IRS estimates that more than 100 million Americans have had their personally identifiable information stolen by criminal hackers, he said.
The Equifax breach disclosed in early September is estimated to have affected more than 145 million U.S. consumers: http://bit.ly/2yuKggS.
18 Dem AGs sue DeVos for blocking Obama for-profit college rule: Eighteen Democratic attorneys general are suing Education Secretary Betsy DeVos for refusing to enforce an Obama-era rule meant to protect students from predatory career college programs, BuzzFeed News reported Tuesday.
The attorneys general from 17 states and D.C. filed suit against Tuesday after DeVos blocked and then promised to undo an Obama-era rule called “gainful employment.”
It would have stopped federal financial aid funding from going to career college programs at for-profit colleges that leave students with low income and massive debt loads.
The lawsuit alleges that DeVos is violating federal law by not enforcing the rule, BuzzFeed reported.
The Education Department called the legal action “the latest in a string of frivolous lawsuits filed by Democratic attorneys general who are only seeking to score quick political points.” http://bit.ly/2yvkWHO.
GOP tiptoes toward long-held dream to kill estate tax: Republicans have a chance in tax reform to do something that they’ve dreamed of for decades: repeal the estate tax.
But they face some headwinds.
Repealing the estate tax is estimated to cost $279 billion over a decade, contributing to the cost of a GOP plan that could add $1.5 trillion to the federal debt. The benefits from ending the tax would also largely flow to the United States’ wealthiest families and businesses, while President Trump is framing tax reform as a “middle-class miracle.”
A CBS News poll out on Sunday found a majority of voters see the GOP tax plan as tilting toward the rich. And Trump’s Treasury secretary, Steven Mnuchin, acknowledged on Friday that repealing the estate tax would be a boon primarily for the affluent.
“Obviously, the estate tax, I will concede, disproportionately helps rich people,” Mnuchin said, according to The New York Times.
That’s led a handful of Republicans to publicly question the wisdom of fully repealing the tax, which has existed in some form for more than a century. The Hill’s Kim Dixon reports: http://bit.ly/2yvqMZs.
Tech group blasts EU push for higher taxes: The tech industry is pushing back against the European Union’s calls for higher taxes on their profits.
In a letter to the Organisation for Economic Co-operation and Development (OECD), the Information Technology Industry Council (ITI) outlined its concerns with potential tax reforms in Europe.
ITI is a trade association that lobbies on behalf interests of major technology firms like Apple, Google and Microsoft in government, both domestically and abroad.
ITI Director Jennifer McCloskey focused her criticism on the impact of targeting tech companies, in effect “ring-fencing” digital companies into their own tax categories.
“Attempts to isolate business models with a predominate digital component as a separate sector of the economy would ‘require arbitrary lines to be drawn between was is digital and what is not,'” she wrote.
McCloskey floated instead a “simple, stable tax regime” for the entire economy. http://bit.ly/2yvss5o.
Trade rep says White House not actively trying to withdraw from NAFTA: U.S. Trade Representative Robert Lighthizer said Tuesday that the Trump administration isn’t actively pursuing a withdrawal from the North American Free Trade Agreement (NAFTA).
Lighthizer said the goal is to complete an update of the 23-year-old agreement with Mexico and Canada amid President Trump’s repeated threats to pull out of the pact.
“There is no active process for withdrawing,” Lighthizer told reporters.
If the deal falls apart there is no economic analysis as to what would happen but Lighthizer said “my guess is all three countries would do just fine.”
Those questioning the White House’s approach to the trade talks, including business and agriculture groups, have said leaving NAFTA would cause serious damage to the U.S. economy because the three countries are now so integrated. http://bit.ly/2yuXXMU.
Reuters: Mnuchin says he will take on ‘orderly liquidation’ after report: “U.S. Treasury Secretary Steven Mnuchin on Friday said he expects to publish a much-anticipated review of the Financial Stability Oversight Council (FSOC) ahead of a review of special rules that would allow regulators to step in and unwind a troubled lender.” http://reut.rs/2yvnFB2.
Supreme Court agrees to hear American Express case: The Supreme Court on Monday agreed to hear an appeal from 11 states challenging American Express’s rules prohibiting merchants that accept its card from persuading shoppers to use credit cards that charge lower swipe fees.
Ohio initially brought the case, which was joined by Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Montana, Rhode Island, Utah and Vermont. The states claim that the American Express rules violate the federal antitrust law by restricting trade.
The company enacted the rules after Visa and MasterCard started running advertising campaigns in the 1980s targeting American Express’s smaller acceptance network and higher merchant fees, according to court documents.
The states argue that the company’s rules have had the actual market effect of raising the amount that the industry charges merchants.
American Express, however, says its rules have allowed it to compete in a market where Visa and MasterCard command a combined share of 68 percent of credit card transactions: http://bit.ly/2yv3qDr.
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