THE TICKER

Need the lowdown on the twists-and-turns of the tax overhaul wending its way through Congress? Get it here.

If you’re experiencing some dizziness trying to follow the tax debate in Congress, you are not alone. 

Companies with the most to gain or lose from a sweeping ove rhaul of the tax code are also struggling to assess the bottom-line impact of the changes proposed so far — and the changes piled on top of those changes, as the House bill zoomed through the Ways and Means Committee last week. 

The head-spinning velocity of the process has sidelined a meaningful chunk of the corporate cheering section that under more ordinary circumstances would be rallying to help sell the measure to a skeptical public. But that has also thrown off would-be detractors — and not by accident. 

“The process is moving quickly by design, and it’s creating difficulties in digesting complex legislation and providing feedback on potential unintended consequences,” says Nancy McLernon, head of the Organization for International Investment, representing multinational companies with major U.S. footprints. 

Her membership — a roster that includes Anheuser-Busch, Honda North America, Nestlé USA and Unilever — got blindsided by the inclusion in the House draft of a complex new excise tax on payments among certain subsidiaries of globe-spanning companies. Responding in part to their protests, tax-writing Republicans tweaked the proposal last Monday, draining 95 percent from the $155 billion it aimed to raise, then tweaked it again Thursday, restoring about half that revenue. Companies snagged by the measure have been racing to determine what the latest incarnation means for them. 

The dynamic is repeating across a range of industries. Lobbyists and tax specialists tell me their clients have been hiring extra muscle to help them model the impact of the bills as they evolve. From my story in Saturday’s paper: 

Many businesses aren’t yet sold on the proposals, fracturing the traditional Republican coalition that has helped send major legislation over the finish line during previous high-profile fights. The lack of unity among would-be corporate allies could spell trouble for the tax effort at a time when Republicans, and Trump, are desperate for a legislative accomplishment they can tout on the campaign trail next year…

The NAHB is planning to fly more than 100 of its members to Washington next week to make its case. “We want members of Congress to look their friends in the eyes and tell them why they can’t support housing and homeownership,” NAHB President Jerry Howard said…

“You’ve got Republican majorities in Congress and a Republican president that all came together on a framework to reform the tax code, and nobody wants to be against that,” said one lobbyist who spoke on the condition of anonymity to offer a candid assessment. “The problem is the process has really backed everybody into a corner.”

The headlong rush continues today, when the Senate Finance Committee begins marking up the bill it released Thursday. And House Republican leadership will begin whipping its rank and file in hopes of bringing a bill to the floor later this week. 

Speaker Paul Ryan (R-Wis.) is apparently bullish on its prospects, reports Politico's Rachael Bade, despite a group of GOP lawmakers from high-tax states who worry about their constituents losing the state and local income tax deduction.

 "Republican leaders are confident they have the votes to pass their once-in-a-generation tax reform bill in the House this week. There was little arm-twisting over the weekend, multiple sources close to leadership told POLITICO." Bade reports. "And unlike with the Obamacare repeal effort earlier this year, when leaders made final-hour tweaks to win over resistant members, [Ryan’s] team doesn’t intend to make significant changes to the legislation before the vote this time.

'I think they’ve made the calculation that they have 218,' Rep. Peter King [R-N.Y.] said in a Saturday phone interview. The New York Republican, currently a 'no' on the bill, said he hasn’t heard from leadership in more than two weeks. Fellow New York Rep. Dan Donovan, another GOP opponent of the legislation, said the same. The lack of outreach to GOP holdouts suggests leadership feels good about the level of support in the conference — though the Republican whip team won't officially count votes until Monday night."

MONEY ON THE HILL

TAX FLY-AROUND:

Watch Republicans make the case that businesses stand to benefit from their tax plan: 

But the House and Senate proposals still diverge. The Post's Damian Paletta and John Wagner: "Stark differences between the House and Senate tax bills remain unresolved, but there is enough overlap and — so far — muted intraparty resistance, making the White House increasingly optimistic that an agreement can come by Christmas, as President Trump has repeatedly promised... 

Still, potential quagmires remain. House and Senate Republicans risk colliding over whether Americans should be able to deduct local property taxes from their federal taxable income. The House GOP bill would allow Americans to deduct up to $10,000 of those taxes from income as a way to placate complaints from conservatives in high-tax states such as New York, New Jersey and California. In an interview on “Fox News Sunday,” Rep. Kevin Brady (R-Tex.), chairman of the House Ways and Means Committee, stood firm on that provision, saying it is important to 'make sure people keep more of what they earn, even in these high-tax states.'"

(The WSJ has posted a list of the 355 possible amendments that the Senate Finance Committee will consider here. Heather Long runs down the winners and losers in the Senate bill here. NBC's Benjy Sarlin has a good look at who's mad at what in the plan, from deficit hawks to anti-tax conservatives. And here are side-by-side comparisons of the two chambers' bills, from the Tax Foundation and the Committee for a Responsible Federal Budget.)

And here's a smart thread from Bloomberg's Steven Dennis on what to watch for among the pivotal senators: 

The GOP's Roy Moore problem. Forbes's Stan Collender: "The situation in Alabama complicates the problem even further, with the first poll after the story broke about GOP candidate Roy Moore's pedophilia showing the race tied. The election is on December 12, that is, before the final vote on a tax bill is likely to occur. A Democratic win in Alabama will mean that only two Republican senators can stop the tax bill from happening, and more than two had already expressed serious doubts about it before last Tuesday's election. It's no wonder, therefore, that the Republican Senate leadership has been scrambling to somehow deal with Moore so that he doesn't complicate the tax bill calculations any further."

Senate bill better for middle class. Politico's Brian Faler: "The Senate's plan to rewrite the tax code would go much further than a competing House proposal toward making good on Republican promises to focus on the middle class, a new report shows. Moderate-income people would consistently see the largest percentage declines in their tax bills, according to an analysis released late Saturday by the official, nonpartisan Joint Committee on Taxation.

In 2019, people in the middle of the income spectrum, earning between $50,000 and $70,000, would see their taxes fall by 7.1 percent. Those earning between $20,000 and $30,000 would see a 10.4 percent decline, the report shows, while millionaires would get a 5.3 percent tax cut. Unlike with the House plan, that trend holds up throughout the period over which JCT analyzed the Senate proposal. In 2027, for example, millionaires would get a 2.8 percent tax cut from the Senate plan, compared with a 6.1 percent decline for people in the middle and a 10.3 percent reduction for those earning between $20,000 and $30,000."

Rs hunt for sunnier forecasts. NYT's Jim Tankersley: "Republican leaders keep insisting that their plans to cut taxes by $1.5 trillion over the next decade will not add to the national debt — yet economic analyses of the Senate and House proposals keep predicting that the plans will do just that. The disconnect is prompting House and Senate Republican leaders and the Trump administration to hunt down — and promote — more optimistic forecasts, even if they exclude large parts of the tax bills from their analyses or assume growth-boosting features that are not, in fact, in the bills.

The House and Senate bills have been introduced and amended at a rapid clip, and economists are only now beginning to plug their details into sophisticated models that predict how much additional growth the cuts might produce. So far, every so-called dynamic analysis that scrutinizes the full details of the bills and factors in economic growth finds that those plans would add at least $500 billion and as much as $1.7 trillion to the deficit."

Mnuchin: Yes, biggest ever. Bloomberg's Saleha Mohsin: "Steven Mnuchin stood by [Trump’s] declaration that the Republican plans now working their way through the House and Senate will deliver the biggest U.S. tax cuts ever. But the math says otherwise. The Treasury secretary agreed with Trump’s comments that the plans deliver the 'largest tax cuts in the history of this country,' citing proposals to slash the corporate tax rate. 'There’s lots of different ways of looking at it. This will be the largest change since President Reagan,' Mnuchin said Sunday on CNN’s State of the Union."

... while McConnell walks back a key claim: "Senate Majority Leader Mitch McConnell acknowledged to The New York Times Friday he erred when he said in an MSNBC appearance last week that 'nobody in the middle class is going to get a tax increase.' Now the Kentucky Republican says every income group would see a tax cut -- on average. 'You can’t guarantee that absolutely no one sees a tax increase,' he told the newspaper."

Carried interest in Senate sights. Bloomberg's Alexis Leondis and Vonnie Quinn: "The carried interest tax break for investment managers is likely to change in the Senate, even though the chamber’s current tax proposal doesn’t call for it, according to Senator Pat Toomey, a Pennsylvania Republican. 'I expect that some amendment to make some changes on the current policy on carried interest will probably prevail,' Toomey, a member of the Senate’s tax-writing committee, said during a Bloomberg TV interview on Friday. 'My guess is by the time this is over there will be a change in the policy.'"

But good news overall for Wall Street, via CapAlpha's Ian Katz: "For financials, the news has been mainly good -- so far. The dreaded bank tax on the largest SIFI firms seems to have been averted. We still wouldn’t rule out an 11th-hour addition if lawmakers find they need to scrounge up savings from unpopular sources. The banks are getting hit with a lighter penalty prohibiting lenders with more than $50 billion in assets from expensing their FDIC assessments. For the very largest banks, that would be less harsh than the originally feared levy on all assets over $50 billion."

Millionaires to Congress: No thanks. The Post's Heather Long: "More than 400 American millionaires and billionaires are sending a letter to Congress this week urging Republican lawmakers not to cut their taxes. The wealthy Americans — including doctors, lawyers, entrepreneurs and chief executives — say the GOP is making a mistake by reducing taxes on the richest families at a time when the nation's debt is high and inequality is back at the worst level since the 1920s... The letter was put together by Responsible Wealth, a group that advocates progressive causes. Signers include Ben & Jerry's Ice Cream founders Ben Cohen and Jerry Greenfield, fashion designer Eileen Fisher, billionaire hedge fund manager George Soros, and philanthropist Steven Rockefeller, as well as many individuals and couples who aren't household names but have at least $1 million in assets."

— Greenspan: Fix the debt first. CNN Money's Matt Egan: "Alan Greenspan has a message for President Trump and Congress: Now is not the time for big tax cuts. Greenspan, the former Federal Reserve chief and Republican economic adviser, is worried about how tax cuts will worsen America's mountain of debt.
'Economically, it's a mistake to deal with sharp reductions in taxes now,' Greenspan told Fox Business on Thursday. 'We are premature on fiscal stimulus, whether it's tax cuts or expenditure increases. We've got to get the debt stabilized before we can even think of those terms,' Greenspan said."

Trump's benefits. The Post's Drew Harwell and Jonathan O'Connell: "Trump has defended the Republican effort to overhaul taxes by calling it a bitter pill for the rich, saying its provisions will boost the middle class and make him a 'big loser' if it’s approved. But tax experts and a nonpartisan analysis suggest he’ll fare far better than others as a result of the changes. From sweeping estate and business tax cuts to specific relief targeting real estate interests, the tax overhaul would directly benefit Trump’s family and business in a way that could save him tens of millions of dollars a year."

Doubt weighs on stocks. Bloomberg: "So the stock market actually can go down. U.S. equities posted the first weekly loss in more than two months as investors turned leery after congressional Republicans made little progress in passing tax cuts. Shares that would benefit most from a lower levy burden led declines, though selling spread to economically sensitive stocks as credit markets flashed warnings signs about the pace of growth.

The S&P 500’s failed run at a new round-number milestone added to selling pressure Thursday, as investors concerned about the prospects for tax cuts took the chance to get out of an equity market that has gone longer than ever without a slump of 3 percent. While analysts debate how much the market has priced in tax reform, stocks reacted to headlines indicating cuts might not be as deep or come as soon as expected."

TRUMP TRACKER

Trump calls Putin sincere. The Post's Karen DeYoung, Ashley Parker and David Nakamura: "Trump said that President Vladi­mir Putin had assured him again Saturday that Russia did not interfere in the 2016 presidential campaign, and indicated that he believed Putin’s sincerity, drawing immediate criticism from lawmakers and former intelligence officials who assessed that the meddling took place.

'I asked him again,' Trump said after what he described as several brief, informal chats with Putin in Danang, Vietnam, where they were attending a regional conference. 'You can only ask so many times . . . He said he absolutely did not meddle in our election. He did not do what they are saying he did. I really believe that when he tells me that, he means it . . . I think he’s very insulted, if you want to know the truth,' Trump told reporters traveling with him aboard Air Force One from Danang to Hanoi, on the ninth day of a long Asia tour. Trump voiced similar conclusions after his only previous meeting with Putin, last July in Germany."

(Here's a full transcript of Trump's remarks aboard Air Force One on his way to Vietnam.)

Intel alums: Putin's playing Trump. John Wagner: "Two top former U.S. intelligence officials said Sunday that President Trump is being “played” by President Vladi­mir Putin on Russia’s interference in the 2016 election and accused him of being susceptible to foreign leaders who stroke his ego.

'By not confronting the issue directly and not acknowledging to Putin that we know you’re responsible for this, I think he’s giving Putin a pass,' former CIA director John Brennan said on CNN’s 'State of the Union.; 'I think it demonstrates to Mr. Putin that Donald Trump can be played by foreign leaders who are going to appeal to his ego and try to play upon his insecurities, which is very, very worrisome from a national security standpoint.'

Appearing on the same program, former director of national intelligence James R. Clapper Jr. said he agrees with that assessment. 'He seems very susceptible to rolling out the red carpet and honor guards and all the trappings and pomp and circumstance that come with the office, and I think that appeals to him, and I think it plays to his insecurities,' Clapper said."

Trump teases trade announcement. Politico's Andrew Restuccia: "Trump said Sunday he’ll make a “major” announcement on trade next week at the White House upon returning from his Asia trip. The statement, planned for Wednesday, will detail Trump’s discussions with world leaders during his 12-day, five-country tour of Asia. 'A lot of things are happening on trade and I’ll be announcing pretty much what happened here and also with other meetings, including with China, South Korea and lots of other places,' Trump said during a trilateral meeting here with Australian Prime Minister Malcolm Turnbull and Japanese Prime Minister Shinzo Abe. Trump added later, 'We’ve made some very big steps with respect to trade, far bigger than anything you know.'"

As Ashley Parker chronicles, he had some trouble with a group handshake at the ASEAN summit:

TPP minus U.S. NYT's Alexandra Stevenson Motoko Rich: "A group of 11 countries announced on Saturday that they had committed to resurrecting a sweeping multinational trade agreement, the Trans-Pacific Partnership, without the United States. A new deal, which would have to be signed and ratified by each country, would include major United States allies like Japan, Canada and Mexico. Collectively, they account for about a sixth of global trade...

Pointedly, the potential members of what is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership came to an early agreement on the broad outline of a deal while many of their leaders were meeting with Mr. Trump in Vietnam — itself a potential member of the new trading group. Some details of a new deal, including when rules would be phased in, still need to be determined, and prospective member states like Canada raised last-minute concerns. But a new deal could be announced as soon as early next year."

POCKET CHANGE

Massive security breach shakes U.S. intel. NYT's Scott Shane, Nicole Perlroth and David Sanger: "Current and former agency officials say the Shadow Brokers disclosures, which began in August 2016, have been catastrophic for the N.S.A., calling into question its ability to protect potent cyberweapons and its very value to national security. The agency regarded as the world’s leader in breaking into adversaries’ computer networks failed to protect its own...

Fifteen months into a wide-ranging investigation by the agency’s counterintelligence arm, known as Q Group, and the F.B.I., officials still do not know whether the N.S.A. is the victim of a brilliantly executed hack, with Russia as the most likely perpetrator, an insider’s leak, or both. Three employees have been arrested since 2015 for taking classified files, but there is fear that one or more leakers may still be in place. And there is broad agreement that the damage from the Shadow Brokers already far exceeds the harm to American intelligence done by Edward J. Snowden, the former N.S.A. contractor who fled with four laptops of classified material in 2013.

American officials had to explain to close allies — and to business leaders in the United States — how cyberweapons developed at Fort Meade in Maryland came to be used against them. Experts believe more attacks using the stolen N.S.A. tools are all but certain."

The biggest hurdle? Investing is moving to complex computer algorithms — and away from the human touch, instincts and judgment that once put Miller at the top of the heap.
Renae Merle
Uber Technologies Inc. approved SoftBank Group Corp.’s offer to buy a multibillion-dollar stake in the ride-hailing company, setting the stage for one of the largest private startup deals ever.
Bloomberg
THE REGULATORS

Trump denies leaning on AT&T. The Post's Brian Fung: "Trump on Saturday sought to distance himself from the Justice Department's negotiations with AT&T over its $85 billion bid for Time Warner, responding to reports this week that the department had asked the telecom giant to sell off CNN's parent company, Turner Broadcasting.

'I didn’t make that decision,' Trump told reporters. 'It was made by a man who’s a very respected person, a very, very respected person.'

The 'person' in Trump's remarks is probably Makan Delrahim, the Justice Department's recently confirmed antitrust chief. Delrahim, who supported Trump during the campaign and served nine months as a White House lawyer, is responsible for overseeing the AT&T transaction."

Lenders abuse vets, VA fails to act. Politico's Lorraine Woellert: "The Department of Veterans Affairs has known for more than a year that military service members were being sold a flood of costly and risky mortgages and done little to stop it. The result: Borrowers have been saddled with thousands of dollars in fees, and interest rates have risen for millions of rank-and-file homeowners. Lenders, hunting for business in a slow market, have swarmed into VA mortgages, sometimes selling military homeowners new loans every few months. Some are pushing short-term adjustable-rate mortgages even as interest rates climb. The churn adds fees at every turn, driving homeowners deeper into debt...

Tozer and others told Politico that the VA has had a fix in the works since the spring of 2016 but has yet to finalize it, something agency spokesman Curt Cashour confirmed this week. The delay has frustrated lawmakers, veterans and the mortgage industry. It has also spooked Wall Street, where investors are losing their appetite for Ginnie Mae mortgage bonds."

Officials working for the SEC inspector general have filed complaints to a different federal whistleblower-protection agency, alleging that he and senior staff retaliated against them for calling out misconduct.
WSJ
OPINIONS

Minneapolis Fed president Neel Kashkari has some thoughts on the founding fathers:

DAYBOOK

Today

  • The Center for Strategic and International Studies holds an event on the future of the world trading system.

  • Economists for Peace & Security Symposium, co-sponsored by the LBJ School of Public Affairs at the University of Texas at Austin hosts an event on economics, security and American politics featuring remarks from Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.).

  • The Senate Finance Committee holds an executive session to consider the Tax Cuts and Jobs Act.
     

Coming Up

  • The Center for American Progress holds an event “Small Businesses and America Can’t Afford the Republican Tax Deal” with remarks from Sen. Elizabeth Warren (D-Mass.) on Tuesday.

  • The Heritage Foundation holds an event on investment security in the 21st century on Tuesday.

  • The House Financial Services Committee holds a mark-up Tuesday.

  • The Bipartisan Policy Center holds the 2017 Housing America’s Families Forum on Wednesday.

  • The American Enterprise Institute holds an event on how the tax system can help working families afford child care on Wednesday.

  • The Cato Institute holds an event on the future of monetary policy on Thursday.

  • Treasury Secretary Steve Mnuchin presides over a meeting of the Financial Stability Oversight Council on Thursday.

  • The George Washington University Law School holds an event on NAFTA renegotiation on Thursday.

  • The Cato Institute Policy Perspectives 2017 is scheduled for Friday.

THE FUNNIES

From The Post's Tom Toles: "The devil is in the details of the GOP tax plan. He’s also in the driver’s seat:"

BULL SESSION

Treasury Secretary Steve Mnuchin addressed Russian meddling in the 2016 election, saying "whatever occurred, there was no impact:"

All the times members of the Trump campaign interacted with Russians:

The First Baptist Church in Sutherland Springs, Tex. has reopened as a memorial to the people killed in the Nov. 5 shooting:

Watch Saturday Night Live's cold open featuring Roy Moore and Jeff Sessions: