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House Voting Now On GOP Tax Reform Bill; House Passes GOP Tax Reform Bill. Aired 12:30-1p ET

Aired December 20, 2017 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

[12:33:33] JOHN KING, INSIDE POLITICS ANCHOR: Welcome back. Live pictures of the House floor, that's Kevin Brady, the Chairman of the House Ways and Means Committee

The House just moments away from voting on $1.5 trillion tax cut plan. Maybe you favor it, maybe you oppose it. It is reality. They're are about to vote. We'll take you back to the floor live when they do. Then it goes to President Trump who will sign it within days. First, they'll have a big celebration today.

Up late last night, back at work early today tracking the votes on Capitol Hill CNN's Phil Mattingly. Phil, no doubt they're going to get to the finish line, so talk us about the buildup to this vote and exactly when these changes kick in.

PHIL MATTINGLY, CNN CONGRESSSIONAL CORRESPONDENT: Yes. So the interesting thing obviously, John, is that the House is voting again. I think there was a lot of thought the Senate going to finish this out last night. There were some technical changes that needed to be changed in the Senate that's why we're revoting but I did run into one House Republican earlier who said the only thing better than voting on tax cuts once is voting on tax cuts twice. So they're not worried at all about where this is going very clearly.

Now, the process from here once this bill is passed in the House it will be cleared for the President's signature. Now as you notice, it takes a couple days to enroll the bill actually get it over to White House and then the White House has to decide when they want the President to sign it. But I will say in the near term, there are already buses parked outside the Capitol building waiting to take Republican members over to the House. At 3:00 p.m. the White House will have a ceremony.

They are very, very thrilled to tout this victory. They know the bad poll numbers. They know the Democratic attacks that have come fast and furious over the course of the last couple weeks, even months, but the fact that they have the legislative victory after an otherwise very frustrating year particular on health care.

And, John, as you know will, a legislative victory that also repeals Obamacare's individual mandate, that also opens up ANWR for drilling. Those are three big victories in one single piece of legislation. They're very happy to celebrate that in just a couple of hours, John. [12:35:13] KING: And Phil, take me behind the scenes a little bit. If the Democrats are watching, they don't like this bill. They're having a final vote right now, just a bit on the mood. We've played a clip of Speaker Ryan on Fox News early today. He's just beyond giddy.

If you're a Republican and you've serving Congress for many years, this is something you have wanted to do since the day you've got here. As we watch this final vote play out and this is historic, ladies and gentlemen, a big tax cut being passed in the final month of the first year of the Trump presidency here.

Take us, Phil, just behind the scenes how people are reacting.

MATTINGLY: So, I think this is a really important point. The difference between health care and the tax overhaul. And obviously, a tax overhaul is something that hasn't happened in 31 years. It's extraordinarily difficult. Nobody wants their ox is gored. You have industries affiliates (ph) stakes here that's why it's been so difficult.

But the difference between health care and tax reform is ideological alignment. When it came to health care, if you took Ted Cruz and Susan Collins, there was never a way that you were going to bridge the gap on how they viewed the health care industry or the health care marketplace should exist. That is not the case on taxes. Ted Cruz and Susan Collins both believe in tax cuts, have both run campaigns on tax cuts. So, you take that and then you take the stinging defeat of health care.

One of the interesting elements, I'd just speaking to one lobbyist last night just kind of recounting how all this happened. He talked about going to fund-raisers for members after the August recess and he asked each one of them, who is getting the blame for the health care failure back in your district? Everybody is talking about President Trump, how he's not doing this well.

And to a person, he told me, every single member told him no one says President Trump is bad at his job. Everybody says we are bad at this job. That was the motivation, that's how they ended up getting to this final point, a point that just a couple of months ago, nobody thought they could reach by the end of this year, John.

KING: Phil Mattingly on Capitol Hill. Phil, I appreciate all the hours on recent days. We'll continue to watch the vote right here.

Let's bring the conversation into the room. Let's keep this vote up. And again, you're watching history. You watching history, whether you like it, support it, aren't sure about it. Republicans are about to send a big tax cut bill to the President.

Carl, let me bring you in at this point because you spent a lot of time over the years up on Capitol Hill. There aren't people like Paul Ryan --

CARL HULSE, CONGRESSIONAL CORRESPONDENT, THE NEW YORK TIMES: I saw the last tax cut. KING: You saw the last tax cut. You saw the last tax cut. And so, you know, it is a -- this is a historic moment for the country and again, in the polarized world we live in, that has its domino effect in ramifications. But put this in a context for us.

HULSE: Yes, this is -- I wrote in my piece today, this is what a lot of these Members of Congress came here to do. This is precisely what they want to do, a corporate tax cut. The other things are sort of extras, Christmas tree, if you will, that gives them some added benefit. But they really wanted to cut, they hear from their business leaders.

This is a big moment for them. That's why we get this weird dichotomy where the Republicans are celebrating and this is a huge achievement for them. You know, Paul Ryan is dropping the mic basically and then the Democrats are looking at this and going, these guys have really just stepped in it. They've made a huge political miscalculation.

But, you know, hand it to the Republicans, they got this through, they got their big win. Mitch McConnell said, you know, I had wanting to do this for years, the stars aligned with Trump and that's what happened.

KING: If nothing else and we'll see how this plays out. We'll see if the President and the Republicans are right about economic growth, for example. We'll see if the President and Republicans are right about businesses using some of that tax cut, not for dividends and not for profits but to hire new workers and build new factories. That will be the story of 2018, 2019 into the President's reelection campaign in 2020.

But at the moment here, what we have seen in the recent days is remarkable Republican discipline. Phil touched on it in unity after months of dysfunction.

ELIANA JOHNSON, NATIONAL POLITICAL REPORTER, POLITICO: I was going to say, you know, I think for the first time Republicans are reaping the benefits of controlling the two branches of government, the legislative branch and the executive branch. They really I think unexpectedly had been at each other's throats and there was so much squabbling and disunity in the Republican Party that it was essentially like they were not in control of the levers of government. But now, they really are seeing the benefits of controlling all the branches of government.

KING: And then --

SAHIL KAPUR, NATIONAL POLITICAL REPORTER, BLOOMBERG: Absolutely right. I spoke to Senator McConnell yesterday who talked about the enthusiasm that his members felt about this which is very different than health care. He compared those meetings to a root canal. He said there was very low enthusiasm on health care. On Obamacare repeal, they were taking away more than they were giving, which is always a painful thing for lawmakers to do with their constituents.

On taxes, it's the exact opposite. They're giving more than they're taking away. And there was a certain level of enthusiasm and, you know, also a palpable desperation after failing on health care that staffers and members felt coming from leadership, coming from their constituents to do something, to not squander this opportunity of unified government.

KING: And I just want to remind our viewers as you watch the screen there. Welcome to Washington. On the motion to concur in the Senate amendment, that's what they call it in the House of Representatives because that's what they're doing. They're agreeing with what the Senate did last night. What the Senate did last night is a big tax cut plan. If you were writing the headlines, you would say final passage of big tax cut.

[12:40:02] And the challenge now, this will close the chapter on this debate. The President will get, the President deserves a legislative victory, a win. Then the question is what is the political impact, what is the economic impact, what is the policy impact.

The Democrats are hoping -- listen to Nancy Pelosi here, the House Democratic Leader. They are hoping, number one, the middle-class does not view this is a tax cut and number two, because they can call it President Trump's tax cut and because President Trump is unpopular, the American people won't buy it.

(BEGIN VIDEO CLIP)

SEN.NANCY PELOSI (D), MINORITY LEADER: Shamefully, the Republicans were cheering against the children as they robbed from their future and ransacked the middle-class to reward the rich. And so today, the Republicans take their victory lap for successfully pillaging the American middle-class to benefit the powerful and the privileged.

(END VIDEO CLIP)

KING: Successfully pillaging the middle-class. Remember, we're just getting started. We're heading into the 2018 midterm election season. But the Democrats are betting. Their number one bet is because this has President Trump's name on it, we win.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Yes, and that actually I don't think has anything to do with the class argument that Nancy Pelosi just made, it has more to do with this a little bit unknown question of how do people really feel about the President's leadership and temperament and where he is leading the country. I think that's really separate question. It has nothing to do with the policy behind this and it could supersede the policy.

I mean, I think tax cuts are popular. It's hard to get dinged for giving people more money, but at the same time this President still has an approval rating in the mid-30s. And that is largely because Americans think he is too divisive, that he is escalating tensions in this country at a time when they want the opposite. And so, we don't know yet what that's going to mean for 2018, how much that's going to persist once Trump starts getting his stride and getting some things done, but that's what Nancy Pelosi is really banking on. KING: And so, as you watch the vote counts go up, this is going to pass. You watch it, it passed the House yesterday. This is a minorly different -- some technical adjustments because of the Senate parliamentary rules.

As you watch this, the Republicans are making a big bet. They're taking a big risk. Well, over time, the American people say oh, actually, I like having more money in my pocket. Oh, they did hire more people at the fact they're down the street. That's their big bet. Not one Democrat has voted for a bill that cuts taxes by $1.5 trillion.

To Abby's point, you know, if you're a working class family, a lot of people say, oh it's only $200, oh it's only $300. If you're working class family living paycheck to paycheck, $200, $300 is damn good money and you are grateful for it. Are the Democrats taking a risk?

Especially those from Trump states, there's 10 Democrats up next year from Trump states. Is this -- are they solid here or is this is a bet in December 2017 that they can't be sure holds up in November 2018?

JOHNSON: I think the irony here for Republicans in a jam of thing they know they're in is that despite Republicans legislative accomplishments, the President himself remains personally unpopular and divisive. And so, that may counterbalance, as Abby said, whatever accomplishments they make and that's what Democrats are counting on you. And you see them campaigning on an anti-Trump platform, you know, from sea to shining sea. And so, I think that they're really banking on the fact that Trump is personally so unlikable and, you know, divisive that that will win them the midterm elections.

KAPUR: I spoke to one senior Republican yesterday who made the point that if this works the way we say it will, then we're fine. In other words, if the economy really does take off, if wages improve, if companies hire more than, they'll be fine. There's an open question as to whether that will happen.

The political dynamic is very familiar. A party that controls everything passes a major unpopular piece of legislation on a party- line vote promising that it will get more popular once people feel the benefits. Democrats did that with Obamacare, did not work.

The average tax cut, I should note, for the bottom 80 percent of earners according to the non-partisan and Tax Policy Center is going to be under $700. That's about $15 or so for per paycheck. Are people going to notice that and are they going to reward Republicans for it? To me, that's where the rubber meets the road.

KING: In the neighborhood I grew up in, that's real money. So, we'll see how people feel about it as we go through. Again, we're going to take a quick break.

Here, you're watching history being made in Washington. Today, the House of Representatives voting final passage on a big tax cut plan. They're still voting, you see the clock running there. We'll be right back. (COMMERCIAL BREAK)

[12:48:49] KING: Welcome back. We're watching history happen right before our eyes. That's the House of Representatives live. They are voting on final passage of the House -- of the Republican, excuse me, tax cut plan. It's a big Republican promise checked off and a big win for a President who now gets a signature legislative accomplishment to show for his first year in office.

We're watching this play out on the floor here again. Final passage, the clock is running out but these votes tend to roll a little bit long while they get members in there to vote. Everybody wants to vote on this one. If you're for it, you want to be recorded, yes. If you're against it, tell you want to go home and say you voted no. A 2017 policy win for the Republicans.

The question is what happens in 2018. And the Republican political imperative here was we have to do something. We have to get our base happy, get our donors happy, and prove we can do something in an all- Republican Washington. They have done that. This is about go to the President.

Look at this brand new CNN poll about 2018. We asked people if the election were today, if you want to vote for a Democrat or Republican for Congress, 56 to 38, 56 to 38. If it's 10, 12 points, the Republican majority is at risk. That's 18 points, Republicans will quibble.

They'll say there's too many Democrats. Their poll is too many. And if you look at other polls, it's in double digits in every single poll out right now. If that number holds up, Nancy Pelosi is speaker.

UNIDENTIFIED FEMALE: Yes.

[12:50:08] HULSE: That's a devastating number, obviously.

KING: Yes.

HULSE: And if you talk to any Republican strategist around town who's talking candidly, they will tell you they expect to get pounded next year.

KING: Right.

HULSE: They expect deep losses if this kind of number stays, devastating losses. I think you're going to see these interest groups immediately begin advertising in what we call Trump/Obama districts where people voted for President Obama and President Trump and try and knock out the Republicans in those districts.

I think you made a good point that in some ways this tax plan was to protect the Republicans. If they didn't deliver this, their money was going to dry up and then they wouldn't have anything to fight off this onslaught, so they needed that just to be prepared.

KING: And the question is, does it get Republican voters back in the game? Midterm elections are all about base intensity and we have seen it in New Jersey, Virginia, and now, even ruby-red Alabama Democrats want to vote. The Democrats want to send a message to Washington, specifically they want to send a message to the President.

The Republicans have a suburban slump. Look at the intensity numbers from the CNN polling. Democratic intensity is up. Democratic intensity -- we don't have the graphic to show, but our poll shows that Democratic intensity is not only up but it's growing. It is -- as we get closer to the election year, it's on the rise. The question is, does this get Republicans back in the game?

PHILLLIP: I mean, the other thing is it's easier to be against something than it is to be for something. So, that's one of the reasons why it's harder for Republicans right now is because they don't have as much to push back on as they used to when they had Hillary Clinton and Barack Obama to rail against. But -- and beyond that I think the agenda next for the White House and for Republicans is going to be a slate of issues that, you know, a Republican described to me as something for the people. It's more -- a little bit more populists in nature.

The intent here is once they delivered the taxes for donors and the corporations, now they have to be, you know, pretty explicitly doing something for average people, so that's why they're talking about infrastructure and they're talking about welfare reform. And so -- but it remains to be seen whether those things are going to be enough. I mean, I would argue, it's just hard to get your base to be excited. Even if you're doing things for them, it's hard to get them really, really excited unless they have something to push against a villain to fight back on and they don't have that right now.

KING: Again, we're watching the vote play out here. Forgive me to interrupt in. This is always one of those things that make you laugh, grimace, cry. I don't what this is about in Washington. But imagine, if you didn't show up to the meeting at your office. This vote has been scheduled all day long.

The clock is running out but this always happens, you see the non- voting on the right side of the screen there. They're still waiting for lawmakers and both parties to get this over the top. But over the top, it will get.

One of the interesting questions is if you look at the polling, a lot of Americans don't think they're going to get a tax cut. Part of that is they don't like this town, they don't trust Congress. They're very skeptical that any good could possibly come out of Washington, D.C. And, you know, that's sad. The Democratic or Republican are just sad. The people around the country have such a low -- hold their government in such low esteem, especially the Congress.

But these are numbers from the Tax Policy Center. Ninety five percent of Americans in 2018 will see a tax cut. In 2025, 91 percent of Americans will see a tax cut. In 2027 if they're allowed to sunset that's when fewer than half of the American people will get -- now the bet is as it was after the George W. Bush tax cuts, which had some sunset Senate that politicians are going to keep extending them as we go along.

But just look at the first year, 95 percent of taxpayers will see a tax cut. If you walk out of the street, even in Washington, D.C. 95 percent of people would not tell you that. A lot of them would say I don't think so, it's not going to me. That's a potential way for Republicans to benefit just when people to say oh, actually, I didn't get a tax cut.

KAPUR: Right. It's a remarkable divergence of poll out this week found that only 14 percent think they're going to get a tax cut. Much larger percent as I mentioned, believe falsely they're going to get a tax hike. For Republicans, one benefit is that members were facing potentially completive primaries in the spring.

This bill was popular among Republican voters so they can at least go home and say I accomplished something and fend off attacks from their opponents saying that they basically sat on their hands all year. Whether that translates to enthusiasm and energy is an open question and whether that can outmatch the Democrats' enthusiasm and energy against this, highly dubious.

KING: I want to just check quickly back in with Phil Mattingly who's watching this play out. Phil, the time has expired, as we say, but this is the way these things go. Again, you're outside, just inside this chamber, the House of Representatives is about to make history. Take us inside.

MATTINGLY: Look, when you think about it first and foremost, this is the first vote of the series so lawmakers take a little bit time to walk from their offices. This is why they're a little bit late right now.

But again, I think when you talk to Republicans, and I noted this earlier, as I was talking about this a couple times too, they know the numbers, they know the issues, they know the head wins that they're facing right now, but there is two things that are at play here. One, and you hear this inside the chamber, belief in the policy. This is something that they've been campaigning on for years for election cycles, on tax cuts, on doing something related to this.

And then, I think there's the real kind of -- you noted the speakers almost giddiness earlier about the idea of getting something very big done, right? They control the levers of both sides of Capitol Hill. They control the White House as well.

[12:55:06] The idea that they are finally going to achieve something large scale that hasn't been done in three decades, that excites Republican members. They know that the challenges they have ahead but they also know the fact that nobody thought this was possible three months ago. They could do this in this timeline.

A lot of people were very skeptical that they could do tax reform at all given the failures both parties have had over the course of the last three decades. So, the fact that they are at this point, particularly after what had been or rather frustrating year legislatively is a very big deal with them. I do think it's worth noting that they are keenly aware of where the numbers currently stand and they are keenly aware of the head winds that they face. And they are keenly aware that right now they need to go out and sell this proposal. I think the one thing that they believe is that in February when the withholding tables change, that people start to see increased money in their paychecks that will start helping things. And perhaps people will start to get their heads around the idea that on average every single income class will see a tax cut.

That will remain an open question and one that we'll have to wait and see the answer to for months and perhaps years ahead. But right now, Republicans are very pleased with this despite any numbers we might see, John.

KING: All right. Phil, let's get straight to the House Speaker Paul Ryan. He's in a celebratory mood.

(BEGIN VIDEO CLIP)

PAUL RYAN, SPEAKER OF THE HOUSE OF REPRESENTATIVES: -- the motion to reconsider is laid upon the table.

(END VIDEO CLIP)

KING: Now, you see it, they cut the audio. That's what they do in Congress, they control the audio. Here we go.

(BEGIN VIDEO CLIP)

RYAN: -- for the motion from the gentleman from Florida, Mr. Dun --

(END VIDEO CLIP)

KING: So as the House has just passed and now sends the President a $1.5 trillion tax cut. The celebration later today at the White House, we know that is coming. And then the defining question is can Republicans sell this and can the President, will the President get credit for this? One of the things it frustrates him, one of the reasons we see him, you know, everyday tweeting about Dow records, the economy's gang busters, everything else is that he doesn't think he's getting enough credit for the economy.

And if you look at the polling, there's a Quinnipiac poll at the other day that essentially showed who is responsible for strong economy. Obama and Trump were tied. That doesn't sit well with this President. We know that.

HULSE: So, Mitch McConnell said if they couldn't sell this tax cut, they're in the wrong business and they should be in a different business. If they can't sell the tax cut, they may be in a different business. I think that's what they're going to be facing.

KAPUR: And Democrats intend to put them out in a different business after this. I spoke to the chairman of the House Democrats congressional arm he said they've done internal polling across Swing districts. Of course, this is their, you know, version of events but they say this tax bill is extremely unpopular in this Swing districts that they need. So, they intend to make this a huge issue in the 2018.

PHILLIP: I think it's fair to say though it is a real tax cut. People will get more money. That is going to be more popular. How much popular is an open question and whether Trump will get credit for that, I think is the other open question.

KING: Well, and just to remind people, if you haven't been paying attention to debate, number one, the House has just passed. It will be on its way to the President. They have some technical things that they take care of. It's a few days before he can sign it but the House has now passed the tax cut plan. It will soon be the law of the land.

The President will celebrate at the White House today with Republican lawmakers. He will sign this -- aides say he may sign this while he's at Mar-a-Lago. And a moment you can all weigh in on whether you think that's the right optics for something you're calling a middle-class tax cut.

But here's what's in it, it lowers most individual rates, nearly doubles the standard deduction, eliminates personal exemptions, does cap state and local tax deductions. The Republicans voting now are largely from suburban areas in high local tax states where they think no, we're not going to do that and eliminates the Obamacare health insurance mandate.

The biggest thing in there is it slashes corporate tax rates quite significantly. It changes how multinational corporations are taxed. The business community is very happy with this.

JOHNSON: Yes, I think this is a genuine accomplishment that you'll see Republicans run on in 2018 and you'll hear the President talk about. The question is whether this accomplishment outweighs in the headlines and the President's personal divisiveness and the shenanigans that tend to get covered more in the news media and whether Republicans can sell the bill. I think it's been one of the biggest weaknesses of both Congressional Republicans and of the Trump administration, their ability to effectively sell legislation.

KING: And that's a great point. In sports or just by anything, you get a win, it creates momentum. Does this create Republican momentum or when they have to deal with potential Obamacare fixes? A lot of conservatives aren't happy about that. Infrastructure divides the party because a lot of deficit -- a lot of Republicans who voted for this had deficit concerns, they don't want to do it again. Is this a building block or is this a one off?

KAPUR: I asked Senator McConnell this exact question yesterday. He's not making any promises. It's characteristic for him to underpromise rather than overpromise,I think. But he pointed out that the success of taxes was in part unique to that issue. There's an enthusiasm for that that there wasn't on other issues. The idea that a 51-49 Republican senate would cut welfare, cut social security or medicare, do a big entitle -- I'm sorry, infrastructure program that involves a lot of spending is pretty difficult.

KING: Which is why you give part of a difficult list ahead for Republicans, they will celebrate today and worry about that in the future.

Thanks for joining us in INSIDE POLITICS today. Thanks to my guest for helping us dealing with all the breaking news coverage there. Our special coverage continues in just a moment. Wolf Blitzer after a quick break -- right now.