US House Passes Tax Bill, Sending It to Trump

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Bloomberg Jul 4 11:45 · 39k Views

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00:00 Eventually, we got this.
00:01 The president had said there was going to be no more negotiations.
00:04 This was going to be done by the July 4th holiday.
00:06 It is July 3rd in the afternoon,
00:09 and at least passage of the bill is now complete.
00:12 What's next?
00:14 The next thing is the president plans to sign the legislation tomorrow.
00:18 And you can bet that there's now going to be a giant message war between Democrats and Republicans
00:26 over whether this is good for America or bad for America.
00:29 We already had eight hours and 35 minutes of Hakeem Jeffries speaking about how this was disgusting, just to use one of the phrases.
00:36 But they essentially railed against this bill the entire time.
00:40 What are the most contentious aspects of this bill?
00:44 So the Democratic case is that this is essentially a Robin Hood in reverse
00:49 legislation that it takes from the poor and gives to the rich.
00:53 And indeed,
00:54 a lot of the direct benefits from this will go to wealthy people and companies
01:00 and a lot of the
01:01 safety net cuts will wind up hurting
01:03 relatively low income Americans.
01:06 The Republican view is, hey, there's $4.5 trillion in tax cuts here
01:12 to goose the economy, get growth going, and that growth will ultimately we're down to the benefit
01:19 of
01:20 Americans.
01:21 And in fact, we had Treasury Secretary Scott Besson on Bloomberg TV just a few minutes ago, just before this bill was passed.
01:27 And he mentioned that when the CBO was scoring the bill, it didn't even take into account any revenue from tariffs that could ultimately
01:35 be up to $2 trillion on, which would also help to offset some of the cost.
01:39 I'm curious, how did the president win over holdouts?
01:41 Because there came a time when there were no more negotiations.
01:45 And still the members of the House Freedom Caucus did seem to fall into.
01:50 So there were very strong disagreements on parts of this legislation, some from conservatives and some from moderates.
01:58 But generally, most of the Republicans were very much in favor of the tax cuts
02:04 and the increases in defense spending and immigration enforcement that are the core of the bill.
02:09 The disagreements were
02:12 the fiscal conservatives often felt like, hey, this is going to add
02:17 three more than $3 trillion to the deficit.
02:20 That's a lot of money.
02:21 We want to see more spending cuts
02:24 on the moderate side from Republicans.
02:26 People who are vulnerable to challenges in swing districts were saying,
02:30 hey, we're going to cut a trillion dollars from Medicaid.
02:34 This is going to wind up hurting people and costing us
02:37 in the election.
02:37 So you had one camp saying we want to cut more spending and the other
02:42 camp saying, hey, you're cutting too much.
02:44 But at the end of the day, they wanted these tax cuts.
02:48 President Trump has huge sway over the Republican Party.
02:51 This is the one piece of legislation he wants.
02:54 He cranked up the pressure and they more or less agree with
02:58 the main pillars of it.
03:00 Should we expect executive orders or anything like that?
03:02 Was nothing promised in the background?
03:04 That
03:04 might appear over the next weeks to months.
03:08 So there were these discussions with the fiscal conservatives
03:12 in which they received reassurances about executive action.
03:17 Now,
03:17 they haven't detailed exactly what those promises are, so we don't know
03:22 exactly.
03:23 But for instance, one of them was talking about
03:26 the president's going to take
03:27 a very hard line on
03:30 clean energy permitting and things
03:33 to make sure that
03:35 there aren't too many
03:37 clean energy projects that became eligible for clean energy
03:41 tax credits before they expire in about a year or so, particularly for wind and solar installations.
03:48 They'll also received assurances,
03:51 so they say, that the Medicaid stuff will be stringently enforced
03:55 and consequently reduce
03:58 Medicaid spending as much as possible.
04:01 But we haven't heard that from the president.
04:03 We haven't gotten, you know, very clear
04:06 examples of that.
04:08 And then, you know, it depends on what he actually does.
04:11 Well, exactly, Mike, and to that point, is this now peak Trump, Will his supporters, the MAGA supporters
04:18 see any benefit or at least, you know, portions of them see any benefits from this bill immediately?
04:24 And if not, what does it mean for the midterms?
04:27 Well, there were
04:29 a lot of the things that appeal to populists
04:32 were front loaded in the beginning of the bill.
04:34 So for instance,
04:36 elderly Americans will get a bigger standard deduction on their income taxes.
04:41 Workers who get tips or overtime pay will get out for the next 4 years,
04:46 a portion of that pay exempted from taxes.
04:50 For a lot of Americans with families, there'll be an increase in the maximum child
04:56 tax credit.
04:56 So there are some tangible things that help.
05:00 The sort of rank and file Trump voters, and they will come early.
05:04 The spending cuts will be back loaded more.