Hi, pals. The Senate passed a tax bill, the president's former national security adviser pleaded guilty to lying to the FBI, and my (very small) hopes for a slow news cycle over the holiday season have been dashed.
This newsletter covers President Trump and how his policies affect greater Philadelphia. You can sign up here to get it in your inbox, for free, every week. You can send suggestions/complaints/questions my way by email or on Twitter, and if you like this newsletter, please forward it to a friend!
Today, let’s talk about the tax bill.
What’s at stake
You may not have been awake when the Senate passed a literally handwritten tax bill in the wee hours of the morning on Saturday (your correspondent certainly was not), so let's recap a bit. Most analyses suggest that most Americans who pay income taxes will see some tax cuts in the short term — but many will actually see their taxes increase in the long term. (The New York Times has a fun interactive — "fun" being a relative term — laying this out.) But the overall benefit for low and middle-income households ends up being pretty small, if anything at all, the Tax Policy Center found. And high-income earners make out best, the Wall Street Journal reported. (Democrats, perhaps predictably, do not fare well.)
Then, of course, there's the huge tax breaks for corporations (which may actually backfire on the Senate), the $1.5 trillion increase in the deficit, and the repeal of the Obamacare individual mandate, which the Congressional Budget Office estimates would result in 13 million fewer insured people and a hike in premiums. (Kaiser has a good summary of the healthcare effects of this not-just-a-tax-bill.)
The local angle
Again, parts of this bill were handwritten at 2 a.m. on a Saturday, so analysts are still working some of the effects out. My colleague Jon Tamari wrote a good rundown on the local impact shortly before the bill's passage. Mark Stier, the director of the Pennsylvania Budget and Policy Center, a statewide think tank, says he's nervous about the repeal of the state and local tax deduction, which he says could make it harder to fund an already cash-strapped state.
Both of Pennsylvania's senators have been quite outspoken on the bill. Bob Casey told me last week he was skeptical (skeptical is probably putting it lightly) of the Republican argument that tax cuts for corporations would translate into higher wages for workers. (An amendment he floated requiring corporations to do so was voted down Friday.)
As the bill worked through the Senate Friday, Pat Toomey got some late-night flack for pushing an exemption to universities' endowment taxes that Democrats said would benefit a conservative college in Michigan and hurt universities here in PA. But at a presser in Philly yesterday, he said he was confident the tax bill would help low and middle-income families and boost the economy.
There are enormous differences between the Senate and House bills — all of which have to be worked out before a final bill is passed. For example, a controversial provision that would tax tuition reimbursements for grad students — making them pay taxes on what they describe as money they never actually see, and a real concern in this university town — is included in the House bill and missing from the Senate bill. The Senate bill repeals the individual mandate; the House bill does not.
So unless the House decides to just try to pass something, anything and rams the Senate bill through, we're in for a few weeks of furious negotiation before the holiday break.
(Also of note: some of the promises GOP leadership made to get Sens. Susan Collins and Jeff Flake on board last week might not come to fruition. House conservatives are already furious, the Daily Beast reports, that Collins was promised bills that would offset the loss of the individual mandate, and that Flake finagled a pledge to work on a DACA bill.)
What they’re saying
In other news…
Former national security adviser Michael Flynn pleaded guilty to lying to the FBI about his contacts with the Russians during the President Trump's transition. And Robert Mueller has subpoenaed the Trump family's records at Deutsche Bank, the German bank that lent Trump a cool $300 million before he became president, in what could be a new chapter in Mueller's investigation.
Pennsylvania is instituting new restrictions on special events grants after staffers organizing last year's Democratic National Convention made out with six-figure bonuses, my colleague Claudia Vargas reports.
The government is staring down a potential shutdown this week because it's 2017 and of course it is. In short: there's a spending bill deadline coming up, the GOP needs Democratic votes to get it through, and Dems are digging in on DACA, the program that protects young undocumented immigrants who arrived here as children, and which President Trump will shut down in March unless Congress arrives at a fix.
Rep. John Conyers (D.,Mich.), accused of sexual harassment by several staffers, is retiring.
What I’m reading
A non-political palate cleanser
Please read my colleague Allison Steele's comprehensive history of scrapple, the objectively superior breakfast meat. (Fight me.)