The NPR Politics Podcast - Tax Bill Heads To Vote; Politics Heat Up Around Russia Investigation

Episode Date: December 18, 2017

Congress is aiming to vote on a massive tax bill this week. Who wins and who loses if it passes? Also, the political rhetoric around the Russia investigation is heating up on both sides. This episode, host/White House correspondent Tamara Keith, congressional reporter Kelsey Snell, justice reporter Ryan Lucas and editor correspondent Ron Elving. Email the show at [e-mail]. Find and support your local public radio station at npr.org/stations.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hey there, it's Tamara Keith, host of the NPR Politics Podcast. We're doing a live show in D.C. on January 18th at the Warner Theater. It's called President Trump One Year In, and we would love for you to be there. Can you think of a better Christmas or Hanukkah present for a certain kind of person? No, I didn't think you could. You can find more information and buy tickets at nprpresents.org. We can't wait to see you there. Hi, this is Sarah. I just finished standing in line at the brand new Wawa in Washington, D.C. at 19th and L.

I'm looking forward to a hoagie and a soft pretzel before heading home to Delaware County, Pennsylvania for the holidays. This podcast was recorded at 1.39 p.m. on Monday, December 18th. Things may have changed by the time you hear this. Happy Holidays and here's the show. Hey there, it's the NPR Politics Podcast. This is the week that Congress is aiming to pass a sweeping overhaul of the tax system and send it to the president for his signature. So what's in the bill and how might it affect you? Also, some of the president's allies are stepping up attacks on special counsel Robert Mueller's investigation. I think the American people are ready to turn the page. And some on the left are convinced the president is on the

verge of firing Mueller. Trump and his team deny that. I'm Tamara Keith. I cover the White House for NPR. I'm Kelsey Snell. I cover Congress. And I'm Ron Elving, editor-correspondent. Hello, guys. Did any of you stand in line for coffee at a Wawa? No, I was too busy making my way through the 503 pages of legislative language on the tax bill that Kelsey's going to tell us about. Okay, so on Friday evening, around 530, Republicans released their final tax bill. It is 503 pages long. And I think that there's a plain English summary that is also about 500 pages long. Is that right, Kelsey? It's about that long, yeah. So let's just run through the headlines. We learned some stuff Friday night. Sure. So I think

it's really helpful to think about this. If you are an individual taxpayer, think about how you paid taxes last year. So a lot of people actually don't know the answer to that question. And I think a good way to kind of start and figure out if you are a winner or a loser in this scenario is to pull out those taxes, look at them, and figure out what you paid. So if you are a person with a family living somewhere not in a particularly big city or an expensive area, and you've got a lot of kids, you're probably going to be a winner under this bill. If you're a person living in a big city and you make enough money to buy a house and to have a mortgage, or are going to soon be buying a house and having a mortgage

in a big city, you're probably not going to do as well under this tax bill as you might be doing right now. And if you're a big corporation, you're probably going to do great under this tax bill. It actually, when it comes to things like pass-through businesses, it seems like things are decidedly more complicated with the tax code than they are currently. Yeah, if you're a pass-through business, if you are a person who runs business or has business income that you file on your individual taxes, there are going to be a lot of things you're going to have to figure out. You're going to have to figure out what deductions you do get to take still. Real estate companies are going to be treated differently than the mom-and-pop store on the corner, and they're all going to be treated

differently than, say, the doctor or lawyer or big hedge fund investor. So all of those people who earn money that way are going to have a lot of math to do next year. I am now going to attempt to explain what a pass-through is, and then Kelsey is going to correct me. My understanding of a pass-through is this is either an LLC or an S-corp, certain types of corporations, where when you file your taxes, any profits that the company has flow through to your own individual tax returns. Yep, that's right. And so we often hear people, particularly lawmakers, referring to these as small businesses, but they're not all really that small. Really big companies, like really big accounting firms, are sometimes LLCs or S-corps. It's kind of a distinction that

people make based on how they do their business. So a lot of these service companies or service industries, like accountants, like lawyers, like hedge funds, it makes more sense for them to organize that way, or at least it did under the old tax bill. There's some speculation that people are going to choose to be corporations. I shouldn't say people. Well, people are corporations, too. Or no, wait, corporations are people, too. I'll get this right. Right. So businesses are, there is some speculation that businesses are going to make decisions to become corporations. Many businesses that were once these larger pass-throughs may decide that they like the benefits of the corporate side of the tax code now. So you might see some shifting in that, but it's hard to say that this is just a small business issue. I would say that one very clear winner would be tax lawyers and

creative tax preparers. Yes. And they have always kind of been winners under the tax code. So they just keep on winning. You sort of brushed on this, but I want to go back to it because LLCs are a structure of company that the Trump organization uses a lot, right? Like that is Donald Trump before he became the president had massive numbers of LLCs, like every building was its own LLC. And you mentioned that there is something related to real estate in this legislation. It has gotten a lot of notice in the last, say, 48 hours or so. Right. So this is kind of complicated. It has to do with the way the tax code handles write-offs and debt.

And so real estate and actually big manufacturers end up having a lot of debt because they have to buy big pieces of equipment or they have to buy land in order to move forward with their business model. The House bill had a version of what ended up in the final bill, which would make it so that these businesses, real estate companies and manufacturers primarily, can take advantage of more generous breaks. Well, since you bring up real estate, let's just talk a little bit about what has raised a lot of people's hackles have a lot of employees for all of these pass-through corporations, but do have a lot of property owned by or under the name of these various pass-through corporations. And that would include Donald Trump. And it would also include Senator Bob Corker from Tennessee, who had said for some period of days that he was a hard no against this bill because he couldn't add another

trillion and a half to the national debt, but then turned around on Friday and said, okay, I can vote for it. Not a lot of explanation. He claims he did not know that this provision, that some people at least think might benefit him, had been added. In fact, he has sent an angry letter to the Senate Finance Committee Chairman Orrin Hatch demanding to know how that got in the bill because he doesn't want his decision to vote for the bill characterized as self-serving. Right. And so Hatch has responded. And Corker actually has some plausible deniability here. This was part of the House bill. This is a modification of a House measure. And Corker was not a part of the negotiations melding the Senate bill with the House bill. I've talked to a lot of

aides over the course of the day today, and they said that they believe that Corker's decision was made more because he had a lot of intervention from businesses back home who were saying that they saw a great benefit in this tax bill and that if he wanted to do something that was good for his home state before he leaves, this tax bill would be a good thing. I've also heard a little bit that it has something to do with leaders leaning on Corker to help deliver votes in the event that Senator John McCain, who is being treated for complications related to his cancer treatment, or another senator were gone. They wanted to make sure that they had more safety here. So it's entirely

possible that this was not something that Corker knew about, but he would still benefit from in his business dealings. And as you mentioned that, Senator McCain has returned to Arizona to continue his recovery or his treatment and will not be back until after the first of the year. So his vote is not there. They really do need Corker. Right. And I think Corker, for all of his kind of feelings about the debt and about the deficit, he actually is one of those people who believes that cutting taxes for corporations will grow jobs. And it wasn't a huge stretch for him to change his mind to vote for this. So it may not be a necessarily nefarious choice on his part to switch it.

It sounds like it was a very complicated conversation that lasted over several days and with a lot of pressure from Republican leaders asking Corker to do this for the party movement, not necessarily whether or not he knew anything about this specific change in the bill. In a second, I want to do sort of a big picture. What was promised up front and how does this fit with those promises? But before we get there, let's go just a little bit further into the weeds on the bill. Let's just run through some of the headlines. So the top individual rate is going to come down under this bill from 39.6 to 37 percent, and it would expire after eight years. Like all things on the individual side of the tax code, the rates would expire in 2025. There would be some changes throughout the brackets. People's brackets would be adjusted. And I think that's one of those times where it's good for us

to say that we do not give tax advice here. And we think you should go check it out for yourself to see where you would fall in here. And there are some great graphics on NPR.org. Our colleague Danielle Kurtzleben was hard at work on Friday night helping visualize some of this. Yes. And please do go look at that and make these assessments for yourself for where you fall here. The corporate tax rate would be cut to 21 percent beginning on January 1st. That would be permanent under this bill. The standard deduction, which is the thing that most people take when they do their taxes, it's the first write-off you take. Individuals would be nearly doubled to $12,000 and married couples would get

$24,000 right off the top. And because of that, we would expect more people to do their taxes, just sort of the check a box, no more deductions, just take the standard thing and go with it. $24,000 would cover a lot for a lot of people. But they did decide to cap state and local tax deductions known as SALT at $10,000 for people to use a combination of property and income taxes or property and sales taxes paid to the states. That would not be indexed to inflation. That might sound wonky, but that means that it's $10,000 today and it's $10,000 in eight years, even if inflation and cost of living has gone up. Because a $20 bill isn't worth what it used to be either. Exactly. So that might mean that if they keep this, if they decide to renew it after 2025,

that $10,000 wouldn't necessarily go as far as the economy grows or if there are shifts in the economy. $10,000 might be worth something really different in 10 years than it is right now. Okay, but Kelsey, what about people who don't make the top rate? Because the top rate is like that's above $600,000 a year for joint filers in terms of taxable income. So what about people making under $100,000 a year? Most people will find themselves in a tax bracket that's slightly lower than where they are right now. But again, this will only last for eight years, expiring in 2025. And each person's tax situation is different. So you may see that your bracket

is shifting, but your tax bill at the end of the year may not reflect that. So it all completely depends on each person's tax situation and what deductions they take and how things sort out at the end of the year. Okay. One other thing that is not indexed to inflation is the child tax credit. Yes. So my sweet little deduction, how much is he going to be worth and how much later? Well, the tax credit is going to double from $1,000 to $2,000 per child. This has a lot of benefits for people who are going to be writing off because more of it is available to you if you pay more taxes. So people who pay taxes just through payroll taxes, just when they have withheld from their paycheck and don't have a bill at the end of the year, can only take advantage of about $1,400 of the credit.

That's the part that's refundable and can go towards growing your IRS refund check. One other thing about the child tax credit is the new bill would require a social security number for every child. Now, this is something that Democrats have fought against for years. They say that it is unfair and that it's a level of burden that makes it harder for people to claim this. Republicans say it's a good way to control things and make sure that people who are here in the country illegally don't try to take tax credits that they are not able to take. But it is hugely controversial. And I think you will start seeing fights about the use of Social Security numbers for government benefits continuing over the next several years.

All right. So now I want to go back. Let's go back in time to September 26th. President Trump was speaking at the White House about his goals for the tax plan. He was sitting with a bipartisan group of lawmakers from the House Ways and Means Committee. And this was this was sort of the initial rollout of the blueprint. Our plan is based on four very crucial principles. So I want to go through these four principles and see where we ended up now that it does seem highly likely that this bill is going to pass this week. First, we must make our tax

code simple and fair. It's too complicated. People can't do it. American taxpayers weigh six billion hours each year complying with the tax code under our plan. The vast majority of Americans will be able to file their tax return on a single page without extra record keeping and all of that paperwork. So we're going to make it very, very simple. It's called simplification. All right, guys. Does this simplify the tax code? This is not exactly the postcard we've been talking about. This is not the postcard you're looking for? This is not the postcard you're looking for. The postcard, by the way, has been around for a very, very, very long time.

It's always getting promised by new Republican administrations and new Republican majorities in the House and Senate. Whenever they take over, we're going to simplify the tax code so you can file on a postcard. And let me just say, if you talk to somebody who teaches taxes in a law school or a business school, they will tell you every time. Simplification and fairness are not friends. The simpler you make the tax code, the nicer it is for the people at the high end. And the more difficult it is for fairness to find its way or trickle down to the rest of the tax players. Yeah, that's actually a really important point that Republicans in the Senate particularly have been making. They were wedded to the idea of having more tax brackets because it makes it

easier for them to make sure that the distribution of the tax burden is more evenly spread out. And it doesn't all fall into, if you create one really big middle bracket, that means like lower middle income people were paying the same as upper middle income people, even though their actual, you know, take home pay is much smaller. It's complicated, but it's actually better for many people. And the simple distinction is between regressive and progressive taxes. There are many people who think that there should only be one tax rate, 10%, 15%, whatever it needs to be. And that would be paid by millionaires, people who made a million dollars a year. And it would be paid by people who make less than $50,000 a year. And for some, in at least a nominal way, that's fairness.

Right. So no postcard, but in some ways, for some people, it might be a simpler process if they end up taking the standard deduction instead of itemizing their taxes. And in theory, more people would take the standard deduction because it's bigger. Yeah. And it may not be simple this first year for those people, people who are kind of on the bubble between saying standard deduction and itemizing. There may be a lot of people out there who want to do the math and figure out what works best for them. But the idea is that going forward, it would be simpler. You would know. If you have some certainty in how much you make each year,

you could just say, OK, I know that standard deduction works for me. All right, let's go to the second principle the president talked about. Second, we will cut taxes tremendously for the middle class, not just a little bit, but tremendously. That includes nearly doubling the standard deduction that most families take on their taxes and increasing the child tax credit, which families really want and have been talking about it for a long time. All right, so can all of these things be true? Well, I guess it kind of depends on how you define middle class. The salary that people make in a big city is

different than the salary that people make typically in a lower cost area. So it's hard to say exactly what middle class means in this scenario. And Republicans say that people in every tax bracket will see a reduction, but they won't say that everybody will. So on the whole, they say that most Americans will see a benefit under this bill. But I think we should also just throw out there that very wealthy Americans will see tremendous benefit from this bill. But I think we should also just throw out there that very wealthy Americans will see tremendous benefit from this bill as well. Right, because they're the people who are getting a big reduction at the top rate, and they're the people who are most likely to be itemizing. So they're combining a lower rate with access to both a higher standard deduction and the idea

of being able to keep some of these itemized deductions that they like. So yes, wealthy people will walk away from this doing quite well. All right. Principle number three. Third, we will lower tax rates for businesses to create more jobs and higher wages for Americans. America has the highest business tax rate anywhere in the developed world. We're the highest taxed nation in the developed world. And I think... Fact check on that. The U.S. is not the highest taxed nation in the developed world. That's been fact checked several times and the White House keeps repeating it. That's just not true. But businesses will be getting a tax cut. And so the White House is following through on that promise. Yeah. And the only question is, will the second half of that promise come true? And that's not really up to the president. That's up to businesses.

The question of whether this will create more jobs and higher wages for Americans. Right. All right. Numero cuatro. Finally, we want to bring back trillions of dollars in wealth parked overseas. We want this money invested right here in America. You have close to $3 trillion and it could be much more than that. Nobody really knows what the number is, but we know it's substantially more than $2.5 trillion. And that money is overseas and that

money will come pouring back. Again, this one is up to businesses. Yes, they will have a lower tax rate and that will make it more appealing for businesses to bring back the money that they have parked overseas. But there's no guarantee that they will do this. The change in the system makes it so it's very difficult for them to avoid doing that. But how they invest that money and what they do with it is really up in the air. We will find out over the next year or so how this works out. Let's just do logistics here. We are expecting the House to vote on this Tuesday, right?

Yeah. So the idea is that the House will have a vote early in the day on the thing called the rule, which is kind of what sets up the rules for voting later in the day. And then they will vote sometime in the afternoon on Tuesday to pass this tax bill. They will send it over to the Senate. The Senate will hopefully, if they think in their minds, pick it up somewhere on Tuesday. The vote could happen Tuesday or Wednesday. There is a tiny possibility that the Senate could have some sort of fight about individual provisions and whether or not they fit into these complex budget rules that have been governing this process all along. It's possible that the Senate parliamentarian could decide that some small individual portions

of this bill need to be removed. And if that happens, then the bill would have to get sent back to the House for another vote. But people I've talked to said they don't really expect that to happen, but it's a possibility. So the suspense is not killing us. It is not. We think that this should be a fairly easy, in fact, the easiest part of this week. Yes. So let's get to the less easy part of this week. We have something of a countdown clock running. December 22nd, the day that government funding to do something. We know that they want to pass a spending bill, but we don't know how they're going to get there politically, when they're going to vote on it, or really how long the spending bill would last. People I talk to say that they're getting close, the talks are going well, but that there is no deal in hand. So there are a lot of questions about will conservatives

support a short-term spending bill? Will defense hawks who want to see year-round spending for the military, will they vote for this? Will Democrats vote for this if there isn't a deal on immigration, which they've been calling for? We don't know the answer to any of these questions. And most people I talk to say that we won't really have an answer until the tax bill is done. So that doesn't leave a whole lot of time at the end of the week to make sure that the government stays open. And this is the point where we cue the sleigh bells and we hear the sound of Santa hitching up the reindeer. And why do we push these things right up against a holiday recess? Because that's the way you get them to do their

job and actually cut the deal and compromise. Normally, we would expect that we'll get down to Thursday and they'll go for the short-term solution. They'll go for the two weeks. We'll come back and work this out in January and we won't miss having the family around the tree. But there are some people pushing back against that who feel they're getting rolled. I'm talking about House Republicans here. They're getting rolled on the tax bill by the Senate. And now they're being told they have to sign off on something else they don't like and they can't get any of the things that they really wanted.

And they're feeling like maybe it's time for them to put some coals in some stockings and say no. I guess the overall hope in Washington is that sleigh bells are more powerful and toxicant than jet fumes. And we will see if that is true. Well, and the thing is that President Trump does not want to have his glorious victory signing the first major piece of legislation of his presidency immediately followed by a government shutdown. Yeah, that wouldn't look as shining. OK, we are going to take a quick break. And when we come back, Ryan Lucas is joining us to talk about the latest in the Russia investigation and more to the point, the politics around it. Hey, guys, it's Tamara Keith here.

And we know that you are very passionate about the NPR Politics podcast. We know this because we talk to you online all the time and we hear from you. And you download this podcast and listen to it and ping us if it doesn't come in your feeds quickly enough. So we're hoping that you might be willing to show this passion in one other way by going to donate.npr. We appreciate it. Then go back to social media with the hashtag WhyPublicRadio and say why you did. Thank you so much. We appreciate it. We are back and justice reporter Ryan Lucas is in the studio with us now as well. Like magic. Like magic. Just appear out of nowhere.

You are here for an update that is not so much on Robert Mueller's Russia investigation, because there really haven't been any major legal developments there in a couple of weeks. But to update us on the politics around that investigation, which are getting increasingly, I don't know, what's the word? Muddy? Muddy, murky, cloudy, hazy. We got some words. Yep. OK, so over the weekend, there was this intense focus on a letter that a lawyer for the Trump transition team sent to Congress about emails that Mueller's team acquired from that transition period. And this feels like one of those stories where then you wake up Monday morning and you're like, hmm, what did I miss? But but let's can you just sort of do

the quick and dirty on this? Boil it down to the basics. So basically, a letter from a lawyer for Trump for America alleges that Mueller's team basically improperly obtained Trump transition team emails and electronic devices. And legal experts have kind of questioned the reasoning behind these allegations. Many say the claims that are made in the letter are groundless. The special counsel's office took the rare step of actually responding, said, quote, when we have obtained emails in the course of our ongoing criminal investigation, we have secured either the account owner's consent or appropriate criminal process. They're basically saying we haven't done anything wrong. We obtained these properly.

And then you have lawmakers on the Hill. There were two committees that this was sent to, top Democrat on one of those. This would be the Government Oversight Committee in the House. Elijah Cummings said, basically, there's no support for withholding transition emails from criminal investigators and that everything has been above board. Are there people other than Democrats saying that too? Trey Gowdy, who's the chairman of the Oversight Committee, basically said this is not a matter for Congress. You can decide this in the courts. Normally, Gowdy is one who's quick to kind of take up the torch of if there's something wrong, we will look into it if it affects the president. Hey, Ryan, I had a question about that. How much difference does it

make that we aren't hearing leaders joining in these calls that they're, you know, they're kind of keeping out of this attempt to discredit the investigation? Is that does that make a difference? I think it makes a difference in terms of the politics internally in Congress. But in terms of public perceptions, there's enough out there right now for opinion hosts on Fox News, for right wing print organizations to really take and run with. And if you listen to people like Judge Jeanine Pirro on Fox, she has grabbed this narrative and she has run with it. Here's a little tape from her this weekend. I doubt in American presidential election history that there has been as great a crime or as large a stain on our democracy than that committed by a criminal cabal in our FBI and the Department of Justice who think they know better than we who our president should be. If you have McConnell and Speaker Paul Ryan not necessarily taking up this cause, but they aren't going out and shooting it down day in, day out.

If you have lower level members of the House, I haven't heard it as much from the Senate, but if you have lower level members of the House who are running with this, that provides enough airtime and support from people who are government officials to carry this narrative forward. Hey, Ron, didn't this happen with Ken Starr and the Clinton investigation? Yes, there were quite a few Democrats who did everything that they could do to discredit Ken Starr and, you know, make him out to be, you know, Inspector Javert from Les Miserables and to make him some kind of a villain because he was pursuing, with some degree of doggedness, to be sure, the sexual escapades of Bill Clinton, wherever they may have happened. And when Monica Lewinsky was located, of course, he had just what he needed.

So yes, there were Democrats objecting then. We had Republicans back in 1972 and 73 saying, what is all this business about Watergate? When are we going to be done with it? And so on. And this is to be expected. They are loyal team members. They have very loyal followers who are fervent and who are wondering, why aren't we protecting our guy, whether that's Bill Clinton or whether it's Donald Trump? And why aren't we out there punching back against this Bob Mueller guy? So as this has gotten louder, the left has also gotten louder in raising concerns about what could possibly be the endgame here. There have been rumors about Mueller's imminent demise for months, and Mueller is still there.

The White House, of course, has said that Trump is not going to fire Mueller. Trump himself said over the weekend, I believe, I'm not going to fire Mueller. No, I'm not. No. What else? What else? What do you got? What else have you got? So, Ryan, can the president fire Mueller?

So the special counsel was appointed by the deputy attorney general, Rod Rosenstein. He is the only person who can relieve him of his duty. Now, of course, the president could fire the deputy attorney general and put a new person in his place who could then go through the motions of getting rid of the special counsel. But it is not as simple as Trump decides Mueller's time is done and he kicks him out the door. Though I guess he could also get rid of Sessions and get a new attorney general. That would be another option, yes. Because the attorney general would then take over overseeing the Russia investigation because Sessions, of course, had to recuse himself from said investigation because of his role in the campaign.

I believe the last time we really saw something like this go down, again, October 1973, was a moment, a night when it was necessary to fire several people, including a couple of people who were briefly called the Attorney General of the United States, in order to accomplish a firing that in the end did not save Richard Nixon at all because it inflamed interest in the issue. Now, Ron, the president's lawyers also very much remember this history, and they have made it clear repeatedly, especially Ty Cobb in the White House, as he is called special counsel in the White House, that they are cooperating fully with the Mueller investigation. They want to see it to its conclusion. They believe the president will be exonerated.

And if the president is exonerated, then on some level, it helps to have an investigation that is still considered credible by the time the president is exonerated. That's right. They would like the White House to have clean hands on the day that Robert Mueller says there's nothing here. Move along. And if that day is coming, then they should probably try to encourage some of their allies to be a little less extreme in their accusations about the intentions of Robert Mueller. All right. I think we're going to call that a wrap for today, and we will be back in your feed on Thursday. And in this holiday season, as we head into the end of the year, we're asking you to donate whatever you can to your local public radio station and tell them that we sent you. Your support is the reason we can do what we do, bring you the news and help you make sense of it, or, you know, at least add a little clarity to the mud that is some of this. So if you haven't done it yet, please visit donate.npr.org slash politics and give whatever amount is possible.

It truly doesn't matter how much. Again, that is donate.npr.org slash politics. And when you do, tell everyone why you did with the hashtag Why Public Radio. Thank you so much. I'm Tamara Keith. I cover the White House for NPR. I'm Kelsey Snell. I cover Congress. I'm Ryan Lucas. I cover the Justice Department. And I'm Ron Elving, Editor-Correspondent. Thanks for listening to the NPR Politics Podcast. © transcript Emily Beynon