House GOP leaders plot to avert shutdown, but may need Democrats

Nancy Pelosi and Paul Ryan are pictured. | Getty

If more than two dozen of the House GOP’s far-right flank oppose the strategy, House Speaker Paul Ryan would need to lean on Minority Leader Nancy Pelosi for votes. | Win McNamee/Getty Images

House GOP leaders are forging ahead with a spending strategy that has drawn flak from far-right members, making it increasingly likely that they will need help from Democrats to avert a shutdown.

One week before a key funding deadline, Speaker Paul Ryan confirmed to members Friday in a Republican Conference meeting that the House will vote on two separate short-term spending bills — one through Dec. 22 and another through January.

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The two-part vote is intended to drum up pressure on Democrats to strike a much-needed budget deal by the time government funding runs out on Dec. 8, GOP aides say. But the unconventional tactic has met with skepticism from conservatives, who fear they’ll get rolled in a last-minute deal before the holidays.

Rep. Dave Brat (R-Va.), a member of the House Freedom Caucus, warned of an “end-of-year Christmas party of spending with Democrats.”

“The budgeting never goes good when everybody loads up the Christmas tree,” Brat said. “You got to give me one heck of a good argument for a two-week [continuing resolution]. I haven’t heard it yet.”

If more than two dozen of the House GOP’s far-right flank oppose the strategy, Ryan would need to lean on Minority Leader Nancy Pelosi for votes. That trade-off would almost certainly require the GOP to make painful concessions in a spending deal, like bigger boosts for domestic programs.

GOP leaders explicitly warned during the closed-door meeting that they would need to seek help from Democrats if their own members voted against keeping the government open.

“They said, basically … ‘Hey, if we’ve got the votes, then we do it. If we don’t got the votes, then you got to go do things to get votes from elsewhere outside the conference,’” Rep. Mark Amodei (R-Nev.) told reporters.

Democrats are so far refusing to commit to helping Republicans pass a spending bill, ticking off a list of long-simmering political issues like protections for Dreamers, or young undocumented immigrants, and funding for the Children’s Health Insurance Program.

“We have no resolve on CHIP, we have no resolve on the Dreamers, so without any of that resolved, why, why would I vote for an extension?” Rep. Rosa DeLauro (D-Conn.) told POLITICO. “I’m going to wait and see what we’ve got.”

Pelosi stressed her commitment to bigger domestic spending levels, as well as a Dreamers deal, in a news conference Thursday. But she also underscored her intention to avoid a public showdown. “We want to keep government open. That’s what we are about,” Pelosi told reporters.

House Republicans began whipping the votes Friday morning, with a vote tentatively planned for Wednesday — two days before the Dec. 8 deadline.

Emerging from the meeting, many Republicans said they remain undecided. The biggest question: What will GOP leaders concede to Democrats in spending talks over the next week?

Both parties say they hope to have a spending deal in hand before the deadline — laying out the fiscal 2018 budget for the Pentagon and domestic programs. Members said that agreement will likely be the biggest deciding factor in who votes for the bill.

“I think it’s 50-50 right now,” said Rep. Mark Walker (R-N.C.), who leads the influential Republican Study Committee, adding that he and many of his members remain undecided until they learn the spending levels.

A deal next week would still require Congress to pass a second stopgap bill on Dec. 22, which would buy time to actually craft an omnibus. That spending process has been on hold for months as GOP leadership slow-walked negotiations during a hectic push for a tax bill.

Republican appropriators dubbed the “double CR” as a last-ditch plan to force leadership of both parties into a long-awaited spending accord.

“This gives us a chance to get that number before a shutdown looms Christmas Eve,” Rep. Hal Rogers (R-Ky.), a former Appropriations chairman, told POLITICO.

“We have no choice,” he said. “[Leadership] has been preoccupied, rightly so, with the tax bill, but now this shutdown is looming upon us, and that’s the urgent thing that we’ve got to address.”

Rogers acknowledged that Democrats would likely be needed in next week’s vote, though House Appropriations Chairman Rodney Frelinghuysen (R-N.J.) disputed the idea.

“Let’s give the leadership some opportunity to talk to some of the members,” he said.

Multiple GOP sources say next week’s short-term funding bill won’t touch immigration or health care, and would simply be a “clean” CR.

But conservatives say they’re worried about that Dec. 8 stopgap bill in the Senate, where GOP leaders have privately floated the idea of attaching an Obamacare stabilization provision to help win votes for its tax package.

“I think there’s some double-bank shots involved with the Senate tax piece. I think there’s a couple tricky deals here,” Brat said.

Jennifer Scholtes contributed to this report.

http://www.politico.com

The GOP Tax Bill Will Hurt U.S. Universities

House Republicans are pictured here. | Getty Images

House Ways and Means Committee Chairman Rep. Kevin Brady (center) speaks as other House Republicans listen during an event at the Capitol to celebrate the passing of the tax reform bill. | Alex Wong/Getty Images

In The Arena

And that means it will hurt our economy, too.

It seems odd that a tax bill purporting to boost economic growth would take resources away from the institutions most vital to promoting it. But that’s just what the Tax Cut and Jobs Act, which has passed the House and is heading to a vote in the Senate, does.

The legislation takes the unprecedented step of taxing the income of certain private universities—specifically, it imposes a 1.4 percent tax on net endowment income for universities with endowments larger than $250,000 per full-time student. Some commenters have applauded the tax, as if it would rectify everything they consider amiss with higher education in America. But few of those supporters have examined the measure’s dire consequences—repercussions that would frustrate everything from access to college in America to the top-notch university research that creates U.S. jobs.

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As a former investment banker with 33 years of experience doing commercial and investment banking, I know a good investment when I see one. I know that the way out of the jobs dilemma in America is education and research. America’s global competitiveness depends on both. That’s why I welcomed the chance to become a trustee of Yale University, where I have served since 2008. I am also the chair of the Investment Committee, which oversees the management of the Yale endowment. I have taken part in investment decisions and have shaped policies to achieve maximum benefits for current faculty, students and staff while leaving enough resources on the table to ensure that the next generation of faculty, students and staff is able to enjoy comparable levels of support. That’s the central idea of an endowment—to provide a permanent source of support that sustains its purchasing power indefinitely.

As a trustee, I have participated in numerous decisions that the endowment made possible, such as adopting broader interpretations of students’ “financial need” and committing, as Yale has for decades, to meet every penny of that need. Or building two new residential colleges to expand enrollment in Yale College by 15 percent because the university was denying admission to too many highly talented students. Or investing in new academic resources, such as the Center for Teaching and Learning, that encourage fresh approaches to teaching across the university.

And yet Congress would reduce the capacity of colleges and universities to do this essential work—build the human and intellectual capital the country requires to thrive as a global leader.

The 70 or so institutions targeted by the proposed tax are among the most generous providers of financial aid from their own resources, drawn substantially from their endowments. At many of these schools, spending on grant aid is 20 times the total amount that students receive from federal programs, such as Pell Grants. At Yale and several other schools, parents who make the median family income or less are not expected to make any payment toward their children’s education. It is hard to see how students would be better off if Congress taxed the funds to be spent on financial aid.

University endowments also contribute significantly to advances in medicine and high-tech innovation. As anyone who has seen a modern lab knows, research is expensive. Federal grants contribute to this research, but they fall far short of covering the full cost. Universities make up the rest out of private gifts and their own funds. Yale, for example, funds 40 percent of the total cost of all research conducted on campus. This academic research drives commercial innovation and America’s job growth—two-thirds of the scientific articles cited in U.S. patent applications were published by university faculty and their graduate students. It is difficult to see how the country would gain from taxing funds that would otherwise be spent on research that spurs innovation and job creation.

Furthermore, many of the colleges and universities facing an endowment income tax are the economic anchors of local economies. Yale, for example, makes voluntary payments to New Haven and other towns; it funds scholarships for any New Haven public high school graduate with a B average or higher to attend any public or private university in Connecticut; the Yale Homebuyer program has dispensed millions to employees who buy (and occupy) a home in New Haven. (Yes, the participating employees pay taxes on the benefit.) I doubt that the federal government will step in to sustain these efforts if universities are taxed.

It’s simple: Taxing the resources that support student aid, teaching, research and community investments does not make sense—and it represents a fundamental change in tax policy toward charities. For decades, government has refrained from taxing public charities in recognition of their contribution to social welfare. The Tax Cut and Jobs Act reflects a new maxim: “If we can tax it, we will.” That policy does not bode well for any charity, whether they are colleges with smaller endowments, museums or hospitals. But, more important, it does not bode well for the future of our country.

Douglas A. Warner is former chairman of JPMorgan Chase and a member of the Yale Corp.

http://www.politico.com

Trump plans to declare Jerusalem the capital of Israel

President Donald Trump is pictured. | AP

The White House is considering having President Donald Trump unveil the plan during a speech at the National Defense University in Washington. | Alex Brandon/AP

President Donald Trump and his senior aides are preparing for a Wednesday announcement that the United States recognizes Jerusalem as the capital of Israel, according to a senior administration official.

The official said the specifics of the announcement are still in flux, adding that the White House is considering having Trump unveil the plan during a speech at the National Defense University in Washington.

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The move, coupled with plans under consideration to eventually move the U.S. Embassy in Israel from Tel Aviv to Jerusalem, could complicate efforts by Trump’s son-in-law and adviser Jared Kushner to restart peace talks between the Israelis and the Palestinians.

Aides have said plans are still in flux and may change. The president had faced a Friday deadline under a 1995 law to issue a waiver allowing the embassy to remain in Tel Aviv, something presidents have routinely done since 1999.

Trump promised as a candidate to move the embassy, a longstanding concern of some American Jews and evangelical voters. He deferred taking such a step in June, signing a waiver in order to give Kushner time to work on his peace plan.

A White House spokesman said Thursday: “The president has always said it is a matter of when, not if. The president is still considering options and we have nothing to announce.”

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Stock market tumbles after Flynn charges

A man in a Trump hat is pictured at the New York Stock Exchange | Getty Images

A trader works on the floor of the New York Stock Exchange on Thursday. | Drew Angerer/Getty Images

Updated

NEW YORK — Stocks went on a wild ride on Friday following news that former White House national security adviser Michael Flynn would plead guilty in the Russia investigation, bringing the probe closer to President Donald Trump.

After falling more than 300 points, the Dow recovered most of its losses as traders digested the news on a day when the Senate was poised to pass a massive tax cut for U.S. corporations. The Dow finished down just 40 points to 24,231.

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The tax cut plan has helped drive stocks to new highs this year along with the Trump administration’s efforts to roll back regulations across a swath of major American industries.

Typically, stocks have sold off on news viewed as threatening to the Trump presidency. But they often recover just as quickly when investors begin to contemplate that even in the event that Trump is somehow forced from office, his likely successor, Vice President Mike Pence, would probably pursue similar economic and regulatory policies without as much drama. Friday was no different as the market processed the Flynn news.

“If this is impacting the chance of the tax package not being passed, then I get a more prolonged and bigger market decline,” said Jim Paulsen, chief investment officer at the Leuthold Group. “However, beyond that, financial markets might believe that even more favorable legislation could be achieved under a more cohesive Republican Party that is simply not possible with Trump in office. Ultimately, a peaceful transition to Pence may be met favorably by the financial markets.”David Kotok, chief investment officer at Cumberland Advisors, said markets “would prefer a less belligerent and non-tweeting replacement for what we have experienced.”

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Comey tweets after Flynn guilty plea: ‘But let justice roll down like waters’

Former FBI Director James Comey reacted to former national security adviser Michael Flynn’s guilty plea on Twitter and Instagram Friday, tweeting a verse from the Bible about justice.

Comey posted a picture of rapids on his Instagram account Friday after the plea was announced, accompanied by the caption: “‘But let justice roll down like waters and righteousness like an ever-flowing stream’ Amos 5:24.”

The former FBI director, who was fired by President Trump earlier this year, has frequently reacted to major developments in the ongoing special counsel investigation into possible collusion between the Trump campaign and Russia with cryptic quotes posted on his social media accounts.

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In October, Comey, then using the pseudonym “Reinhold Niebuhr” on Twitter, tweeted about “man’s inclination to injustice” after former Trump campaign chairman Paul Manafort and his business associate, Richard Gates, were indicted for money laundering under the probe.

“‘Man’s capacity for justice makes democracy possible, but man’s inclination to injustice makes democracy necessary.’ Reinhold Niebuhr,” Comey tweeted at the time.

Flynn pleaded guilty Friday to making false statements to the FBI and announced a plea deal with special counsel Robert Mueller’s team of prosecutors.

Flynn faces up to five years in prison for the charge of lying to investigators.

http://thehill.com