Tax reform shocker: the White House actually has a plan - Axios
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Tax reform shocker: the White House actually has a plan

Carolyn Kaster / AP

Here's a shocker that shouldn't be a shocker: The White House actually seems to have its act together on tax reform. Activists and business leaders who've been meeting with Gary Cohn, Steven Mnuchin, Marc Short & Paul Teller from legislative affairs, and Sean Spicer (who's leading the comms strategy), all tell us the same thing: They're surprised about how much planning and organizing the White House has already done, given its ham-handed approach to the health care rollout.

The administration will start pitching the tax reform effort in mid-August, according to sources involved. They're hoping to get the bill itself finalized for mark-ups after Labor Day (count us as skeptical on that.) But while that happens, expect to see CEOs, White House surrogates, and high-profile conservative activists start talking up the plan.

Sources close to the effort say the White House is looking to avoid the mistakes of the health care debacle, when they failed miserably to build nationwide support.

Here's what to expect:

  • President Trump wants to pitch tax reform aggressively. Our sources expect him to make the case for the plan by barnstorming the Midwest states he won in November. Reince Priebus is in charge of his schedule, so this will be a major test of his organizational skills.
  • The White House is engaging CEOs across the country, looking for them to hold town halls, do media appearances, and write letters to their employees explaining the benefits of tax reform. They want members to return to their districts in August and hear from business leaders and other influential constituents about why tax reform needs to get done.
  • They're talking to local mayors and county commissioners, too. And they're pressing outside groups to spend big on advertising support.
  • A wide range of groups — from movement conservatives to downtown lobbying shops — are fired up. This includes Heritage Action, Americans for Tax Reform, the Business Roundtable, and the Koch brothers' network, which is already rolling out a multi-million dollar ad and grassroots organizing campaign to support comprehensive tax reform.
  • We expect the White House to float a few tax policy trial balloons in August.
  • The aim is to get as many administration officials involved as possible, regardless of their day jobs. UN Ambassador Nikki Haley, for example, has nothing to do with tax reform. But White House officials think she could be an asset because she's a great communicator and a former small business leader.

On the substance:

  • The "Big Six" leading the tax code rewrite — Speaker Paul Ryan and Rep. Kevin Brady, Sens. Mitch McConnell and Orrin Hatch, Treasury Secretary Steven Mnuchin, and National Economic Council Director Gary Cohn — are currently working through their disagreements.
  • One of the toughest remaining disputes is whether to start letting businesses immediately write off the cost of equipment (known as "full expensing"). This would be hugely expensive, so some conservatives oppose it. But House Leadership argues it would juice short-term economic growth.
  • Another major unsolved problem is how (or if) to pay for all these tax cuts. Some in the White House would happily just blow out the deficit, but Leadership suspects most Republicans wouldn't be on board with that.

Be smart: There's a reason it's been more than 30 years since Congress passed real tax reform: It's damn hard.

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Roy Moore refuses to concede

Republican U.S. Senate candidate Roy Moore looks at election returns. Photo: Brynn Anderson / AP

Republican candidate Roy Moore said late Tuesday night that the election for Alabama's U.S. Senate seat wasn't over.

"God is always in control. Part of the problem with this campaign is we've been painted in an unfavorable and unfaithful light. We've been put in a hole, if you will...what we've got to do is wait on God, and let this process play out...The votes are still coming in and we're looking at that." However, Alabama's Secretary of State told CNN the people of Alabama had spoken, and Doug Jones was the winner.

Go deeper: How Alabama elected Doug Jones.

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Winners & losers from the Alabama special election

Photo: John Bazemore / AP

A Democrat will serve as an Alabama Senator for the first time in two decades after Republican Roy Moore's campaign collapsed following allegations of child sexual abuse.

Why it matters: This is a big, unexpected win for Democrats, and follows another key victory in the Virginia governor's race. It's bad news for the Steve Bannon brand of conservatism and President Trump, who went all in for Moore in the closing weeks.

​Winners:

  • Doug Jones, who had never run for public office before, and won as a Democrat in a red state.
  • Democrats​ now have another important notch on their belt, and will close the gap in the Senate to 51-49.
  • #MeToo: Many voters believed Moore's accusers, and the accusations brought down his campaign.
  • Mainstream Republicans: Moore's baggage would have presented plenty of problems for the GOP down the road, even if they are losing a vote in the Senate.

Losers:

  • Roy Moore: He did the unthinkable, and lost to a Democrat in a statewide Alabama race.
  • Steve Bannon: He was the one promoting Moore from the beginning, over fierce objections within his own party.
  • The Republican Party: The RNC and the president backed an accused sexual predator, and lost. They're also now down a Senate seat.
  • President Trump: He decided to throw his full-throated support behind Moore, and in so doing made his second incorrect bet on the Alabama race. Not to mention, he was the one who appointed Jeff Sessions as Attorney General — considering it a safe seat.
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Trump, Biden, Clinton react to Doug Jones' victory over Roy Moore

Democrat Doug Jones pulled out a victory over Republican Roy Moore on Tuesday night, after a race that was turned on its head by allegations of child sexual abuse against Moore. Moore was the second Alabama Republican endorsed by President Trump to lose, after he Moore defeated Trump-backed Luther Strange in the primary. Trump congratulated Jones on "a hard fought victory."


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Both Trump-endorsed candidates lose in Alabama

Trump told voters to elect Roy Moore. Photo: AP

President Trump has now twice endorsed the losing candidate in Alabama. He backed Luther Strange in the Republican primary, and threw his weight behind Roy Moore for the general election. Moore was defeated by Democrat Doug Jones tonight.

The big picture: Trump won Alabama by almost 20 points in the 2016 election, but Alabama voters rejected his favored candidates in the Senate race. The same thing happened on Nov. 8 in Virginia, when voters elected Democrat Ralph Northam over Trump-backed Republican Ed Gillespie by a 9-point margin.

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FBI agents on Russia probe called Trump an "idiot"

Photo: AP

Two FBI agents who were assigned to investigate alleged collusion between the Trump campaign and the Kremlin exchanged text messages in which they referred to President Trump as an "idiot," Politico reports, citing copies of the messages provided to Congress by the Justice Dept.

The backdrop: Special Counsel Robert Mueller fired one of the agents, Peter Strzok, from the investigation in late July, "immediately" after he learned of the text exchange, the Justice Dept. told Congress. Lisa Page, the other agent in question, had already left Mueller's team by that point.

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In tax plan negotiations, corporate rate currently sits at 21%

Rubio. Photo: Pablo Martinez Monsivais / AP

The corporate tax rate currently stands at 21%, according to three sources familiar, as lawmakers work to finalize the tax bill they hope to vote on by next week.

  • Why it matters: Both the House and Senate passed bills that would cut the top corporate rate to 20%, but hours after the Senate bill passed, President Trump said he would accept a 22% rate.
  • Sen. Marco Rubio tweeted on Tuesday, likely referring to reports that the individual rate is being lowered to 37%: "20.94% Corp. rate to pay for tax cut for working family making $40k was anti-growth but 21% to cut tax for couples making $1million is fine?" Rubio had wanted to raise the corporate tax to pay for a more generous child tax credit, but was shut down.
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Charming Charlie becomes 20th major retailer to file for bankruptcy this year

Charming Charlie, the Houston-based jewelry and accessories retailer, announced Tuesday that it reached an agreement with lenders and equity sponsors to clear the way for its filing of Chapter 11 bankruptcy.

What went wrong: Charming Charlie's bread-and-butter, affordable jewlery, is an ideal product for online sellers, given that it can be warehoused and shipped cheaply. What's more, even as business migrated online, Charming Charlie overextended itself, opening 79 stores between 2013 and 2015.

Why it matters: It's the twentieth major retailer to have filed for bankruptcy protection in 2017.

Charming Charlie burst onto the retail scene in 2004, with stores uniquely organized by color, and offering products at prices between high-end jewlery stores and discount shops like Claire's, which is aimed at the teenage market.

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Tillerson says he'd meet with North Korea without preconditions

Photo: Susan Walsh / AP

Secretary of State Rex Tillerson said on Tuesday that the U.S. was dropping the precondition that North Korea give up its nuclear weapons before sitting down together, according to CNN.

"We are ready to have the first meeting with precondition...Let's just meet, and we can talk about the weather if you want. Talk about whether it's going to be a square table or a round table, if that's what you are excited about. But can we at least sit down and see each other face to face, and then we can begin to lay out a map, a road map of what we might be willing to work towards."

Why it matters: Tillerson said demanding North Korea denuclearize is "unworkable," and that Trump agrees it isn't plausible. Tillerson did demand, however, that North Korea "ensure a period of quiet during talks," per CNN.

  • The White House released a statement in regards to Sec. Tillerson's comments, saying: "The President's views on North Korea have not changed. North Korea is acting in an unsafe way not only toward Japan, China, and South Korea, but the entire world. North Korea's actions are not good for anyone and certainly not good for North Korea."
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Washington Post reporters barred from Moore's election night party

Photo: Brynn Anderson / AP

The Moore campaign has revoked press credentials from reporters for the Washington Post and asked them to leave an election party tonight in Alabama. The campaign also reportedly notified the Post on Monday that its reporters' credentials were denied. It was the Post that broke the story of the first sexual misconduct allegations against Moore.

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Trump's lawyer says Mueller is done interviewing White House staff

Photo: Andrew Harnik / AP

Ty Cobb, President Trump's White House lawyer, says "all the White House interviews are over” in Special Counsel Robert Mueller's Russia probe, NBC reports.

  • The big picture: Trump's team has repeatedly tried to take the president out of the spotlight of Mueller's investigation and stated that the probe will wrap up this year.
  • The backdrop: Jay Sekulow, one of Trump's private lawyers, told Axios' Mike Allen that he believes a second special counsel is needed, to investigate potential conflicts of interest in the FBI and Department of Justice.