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House and Senate Pass Tax Bill; House Must Revote on Senate Tax Bill; Interview with Senator Shelley Moore Capito of West Virginia; Interview with Senator Tim Kaine of Virginia. Aired 8-8:30a ET

Aired December 20, 2017 - 08:00   ET

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

[08:05:00] JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Bill. The House of Representatives has to vote on a few small tweaks to the bill, and after that the White House is planning on a media event here sometime this afternoon. The president on Twitter has also said he's planning for a news conference today. We will see how that develops.

Initially the White House was really talking about all of the president's so-called accomplishments during the last year, and during a news conference yesterday here at the White House in the briefing room. However, make no mistake, this Bill is the president's first major legislative accomplishment of his administration, and it's coming in the final days of this year.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The tax cuts and jobs act is passed.

JOHNS: Senate Republicans celebrating after passing the first overhaul of the U.S. tax code in 30 years along strict party lines.

SEN. ORRIN HATCH, (R) UTAH: The Democrats have said that the American people will remember this night. I hope they do.

SEN. MIKE ENZI, (R) WYOMING: This country will be moving forward again.

JOHNS: The early-morning vote, which was interrupted by protesters, coming amid fierce objections from Democrats who attacked the $1.5 trillion bill for disproportionately helping corporations and wealthy Americans. Senate minority leader Chuck Schumer chastising Republicans for talking in the chamber during his closing argument.

CHARLES SCHUMER, (D-NY) SENATE MINORITY LEADER: Can we have order, Mr. President?

UNIDENTIFIED MALE: The Senate will be in order.

SCHUMER: This is serious stuff. We believe you are messing up America. You can pay attention for a couple minutes.

JOHNS: Ohio Democrat Sherrod Brown prompting a rebuke about decorum from an aide to Majority Leader McConnell following this moment during the Senate debate.

SEN. SHERROD BROWN, (D) OHIO: This tax cut causes a huge budget deficit to give money to the wealthiest people in the country, creates a huge hole in the budget. And who is going to fill the hole? Not the lobbyists walking in and out of Senator McConnell's office 100 feet down the hall.

JOHNS: CNN polling shows the bill is unpopular with the majority of Americans, but Republicans remain convinced that once the legislation is enacted, public perception will improve.

MITCH MCCONNELL, (R-KY) SENATE MINORITY LEADER: If we can't sell this to the American people we ought to go into another line of work.

JOHNS: Earlier in the day the House also passed the tax bill with every Democrat and 12 Republicans voting no.

REP. PAUL RYAN, (R) SPEAKER OF THE HOUSE OF REPRESENTATIVES: The conference report is adopted. Without objection the motion to reconsider is laid upon the table.

JOHNS: But after the vote the Senate parliamentarian found there small provisions that violated budget rules, meaning the House will have to revote on the bill later today.

SEN. BRIAN SCHATZ, (R) HAWAII: To me it's emblematic of what happens when you take major legislation, conceive of it in the dark, and rush it through.

JOHNS: After likely passing again in the House the bill will be sent to the desk of President Trump. He congratulated Republicans in both chambers after their votes. Due to changes in the estate tax and the alternative minimum tax the president is likely to benefit greatly from the bill despite insisting otherwise.

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: This is going to cost me a fortune, this thing. Believe me. Believe me. This is not good for me.

JOHNS: Press Secretary Sarah Sanders repeating these claims Tuesday before conceding Mr. Trump could benefit.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: In some ways, particularly on the personal side, the president will likely take a big hit, but on the business side he could benefit.

(END VIDEOTAPE)

JOHNS: The members of the House and Senate as well as the president are getting ready to leave town for the Christmas holiday, but there is one more thing, a very important thing they have to deal with. That is a spending bill to keep the government from shutting down, several sources telling CNN the only practical scenario at this stage is yet another short-term continuing resolution until they can figure out the rest. Alisyn and Bill, back to you.

ALISYN CAMEROTA, CNN ANCHOR: The looming government shutdowns never end, it feels.

BILL WEIR, CNN ANCHOR: Like death and taxes.

CAMEROTA: That's right. We can add one now. Joe, thank you very much.

Joining us to discuss all this, we have reporter and editor at large for CNN politics Chris Cillizza, and associate editor for "Real Clear Politics" A.B. Stoddard. Great to have both of you. Let me put up for all of our viewers exactly what happened last night and what is in the bill since it was being changed up to the last moment.

So it lowers for individuals, it lower most individual tax rates. It nearly doubles the standard deductions. It eliminates personal exemptions. It caps state and local tax deductions at $10,000, which is a loss for people in California, New Jersey, New York, Connecticut, these blue states. And it eliminates the health insurance mandate of Obamacare, obviously a very big deal.

For corporations, for businesses, let's look at what it does. It slashes the corporate tax rate. This was the big win that Republicans and Democrats for years have been pushing for from 35 percent to now 21 percent.

[08:05:01] It lowers the tax burden on pass through businesses, this is the one that affects Donald Trump we believe from what little we know from his tax returns that he hasn't released, his real estate empire is structured on the pass through structures. It changes how U.S. multinational corporations are taxes. A.B. Stoddard, what do you see this morning in all of this?

A.B. STODDARD, ASSOCIATE EDITOR, REAL CLEAR POLITICS: I think let's start with the fact that this is a huge accomplishment for Republicans who really exhibited all year just a party riven with divisions, a real lack of unity, a lack focus, a lot of dysfunction, and an epic failure on the effort to repeal and replace Obamacare. The fact that they have come together on something and gotten it done this quickly is in and of itself a success.

When you dig into what it has been advertised, a middle class miracle by the president, strong relief for the middle class is pretty much the way it's characterized by Congressional Republicans, that will be put to the test as we continue to discuss in the months to come. The economy is already chugging along. The relief on the individual side is pretty nominal, and the corporate relief is really where the law packs its biggest punch. If that's going to trickle down to workers, that's going to produce more economic growth than we are seeing now, that will be a rising tide that lifts all boats and it will be a political win for them. If it stays where it is in the terms of public polling, they have taken a big risk.

WEIR: Chris, for, I don't know, eight, 10 years we have heard Paul Ryan beat his breast and gnash his teeth about the deficits, and this is going to add $1 trillion or so? How do they square that circle?

CHRIS CILLIZZA, EDITOR AT LARGE, CNN POLITICS: Well, they sort of avoid squaring that circle, ill. Remember, this is -- A.B. touched on this, but this is based on the theory of the case. This is based on the idea that cutting the tax rate for corporate America will lead them to reinvest, and that money will get down to workers, jumpstart an already chugging economy. It could, but that's the way they get around -- the rosiest prediction is this adds $1 trillion to the deficit currently, it's the idea is the economy will outgrow that.

And again, it could, but it also might not. I think what you see writ large is this is Donald Trump's Republican Party. Deficits went out the window when Donald Trump won the election, and there was less concern about that. It was like let's get some money back to the people, let's do the tax cut for the corporate entities and individuals, and the deficit will take care of itself whereas the deficit was front and center. Let's say the Mitt Romney had won, the deficit might have been front and center. So I think it's just an emphasis here, but there's no question there's a contradiction between Paul Ryan circa 2010 on deficit and Paul Ryan today.

STODDARD: A.B., Phil Mattingly has a very interesting piece for CNN.com about how all this happened behind the scenes, because what did allow Republicans to pull off this feat of being able to do it in three months? This had taken decades, people had talked about, and in the space of three months after their failure obviously to repeal Obamacare, they learned some lessons.

And so behind the scenes, the reporting is, is that they kept members away from the press in the early stages so they couldn't express their own trepidation about this happening, and they had this off-site retreat at Fort McNair where all of the Republican members were able to vent or express their own anxieties, and they were able to deal with it amongst themselves --

WEIR: In the room.

CAMEROTA: In the room, keep it in the room. Obviously Democrats feel cut out of this whole process, but interesting to see how they pulled it off.

STODDARD: I remember that day when the members were going off on that mini retreat and they were not allowed to bring copies of what they were seeing back to study. It's much like some classified briefing. But I think it was a smart tactic. Obviously what we are seeing is that they learned from the failure of the Obamacare repeal and replace, and learning from your mistakes is a good thing. So let's give them credit for that.

Basically there were nine tax reform bills that were, you know, put together a million years ago. They knew exactly what they wanted to do, and some things were more politically palatable and some things wouldn't survive. There were a lot of sacred cows. So let's say they had a bunch of versions but they came down to one that could be massaged, and it was very smart the way they kept the details secret but revved up the outside support, kept the members unified, and got this through in a very short time.

Remember, though, this is the one issue that still unites Republicans. On every other issue from immigration to a fix on health care to how to deal with the deficit and debt and on and on, even transportation, whatever push on infrastructure is coming from the administration, they are deeply divided.

[08:10:10] So this was born of panic, and panic is productive, but it doesn't mean that we are going to see it replicated in the months to come.

WEIR: We're born of panic most mornings, but also worth mentioning, though it has nothing to do with taxes, this bill opens up oil drilling in the Alaska and National Wildlife Preserve, so another Republican wish that came true. Go ahead, Chris.

CILLIZZA: I was just going to say, Bill, one of the ways they got Lisa Murkowski from Alaska to vote for it, I would give them credit in that they saw the issues, the potentially problems from far away, and from a long distance, but one thing, remember, A.B. made the right point here. Remember when it came to health care, the plan was we need to get rid of Obamacare, and then we will, you know, we'll -- yes, we'll do something. There was no plan. There was never a plan.

For tax cuts, 81 the Reagan tax cut, 2001 the Bush tax cut. Now 2017 the Trump tax cut. This is a thing Republicans know how to do. They had a plan. Yes, there were differences within the Republican conference, but they were all sort of agreed on the idea that putting more money in the hands of individuals and corporations is a good thing that they believe -- and you can disagree with them, but they believe fundamentally on principle is the way in which you grow the economy.

So the ball was on about the 10 yard line here, they were able to push it in. Count me as surprised. I did not think they could do it on this timetable. But this was an easier lift than health care or, to A.B.'s point, almost any other piece of legislation they would take on.

CAMEROTA: OK, Chris Cillizza, A.B. Stoddard, thank you very much for all of the analysis.

WEIR: Thanks for being with us.

The GOP ready to celebrate its big tax win. Now the tough job, selling that unpopular package to the voters or face a backlash in the midterm elections. We're going to talk to a Republican senator about how they are going to do that, next.

(COMMERCIAL BREAK)

[08:15:44] WEIR: The House is going to revote today on the Republican tax overhaul bill and it's expected to pass again and the White House said it would be signed into law this afternoon.

Republican Senator Shelley Moore Capito from the great state of West Virginia joins us now. She is on the Appropriations Committee.

Senator, thank you so much for joining us this morning. Is today a better day to go to work for you as a Republican lawmaker?

SEN. SHELLEY MOORE CAPITO (R), WEST VIRGINIA: Well, we were up late last night and it's going to be a good day on Capitol Hill.

WEIR: OK. Well, I know -- if my numbers are right, about 83 percent of the people in your state don't itemize their taxes.

CAPITO: That's correct.

WEIR: So, they're going to see if they make less than 25 grand, maybe 100 bucks, and between, you know, up to $60,000 or so, between $50,000 and $86,000, they will get $900 or so. But in the long term, what do you say to the critics that say this is a completely unfair redistribution from the middle class up to rich folks and corporations that frankly don't need a tax cut?

CAPITO: Well, I'll start with where you start, 83 percent of West Virginians itemize, they will get standard deduction, they're going to get double child tax credits. By our calculations, a couple making $73,000 could get as much as $2,000 back, that's significant. That's dollars in the pocket that you have earned and for families, I think it's significant.

And this is all through the earning scale where everybody is going to -- in every bracket, is going to have much-tax relief. And much needed tax relief. So, I think the scare tactics that it's only for the wealthy is just the tired argument of the opposition. You know, we asked them to join us in this endeavor to provide tax relief and a competitive tax system around the world, and they didn't get onboard.

So, I'm really proud of the efforts that we went through and I think it will hit our middle earners the best and small businesses, and in a state like mine, small businesses is where the tight squeeze is.

WEIR: But Democrats would argue they weren't really invited to this. In fact, some of our great reporting from Phil Mattingly, the behind the scenes discipline it took to keep Republicans unified meant going off campus and going on a retreat and keeping people organized there. Is this -- does this undermine the faith in the system if they don't understand if the percentage of people who support this bill is about half of that that support Obamacare, and this is for a tax cut. Does this do more harm than good in the long run, the way the process went along?

CAPITO: No, I reject that. I really think, you know, there were 70 meetings in and around the Finance Committee. This has been talked about. Many Democrats were on the bills, and President Obama himself came out in favor of lowering the corporate tax rate several years ago.

What this is, I think, to renew faith in the system, is this is something that President Trump and Republicans said we would do, much like revising regulations, we said more money in your pocket at the end of the day and a more competitive tax system globally, which will help workers. We've already seen some major companies like FedEx say they are hiring more workers and invest more in their company. This is the boost we need to the economy.

And so, I feel very good about what we've done and I think that, you know, the polls and everything I think were sort of fallen prey by the rhetoric and some of the confusing numbers that were out there. But come next year when people start getting their paychecks, they're going to see the results of this and they're going to realize we came through on what we said we were going to do.

WEIR: Have you read the entire bill?

CAPITO: Actually I did.

WEIR: Yes?

CAPITO: Yes.

WEIR: All 550-some pages?

CAPITO: I waded through it.

WEIR: You waded through it.

CAPITO: I can't tell you I comprehended every single little part of the tax code, to be honest with you, but the impacts were very clear and the big impacts of small business, better corporate rates to make us competitive and middle class tax cuts were just glaring when I was reading it.

WEIR: And since you read it all, there's nothing in there that guarantees that corporations have to trickle the money down to their workers, right? They're sitting on piles of cash right now and haven't done it. What makes you think they're going to do it now?

CAPITO: Well, part of the reason they are sitting on piles of cash is because it's parked overseas, because the tax structure that we have in this country is unfavorable for them to bring it back and reinvest in this country.

[08:20:13] I mean, this has been something that was studied. It did not just come up in the middle of the night. This has been studied with large employers to say what is going to bring your money back to these United States so we can manufacture more goods and hire more workers? So, this is the system that has been worked and reworked to try and make sure that that company will come back and reinvest in the company.

And, you know, we have been talking to people all along, what are you going to do if you get a lower tax rate? What is your goal? Many people told me, higher wages, more people working and, yes, reinvesting in their company, but this is good and will help jump- start our economy.

WEIR: Well, you know, if businesses were run out of the goodness of hearts, we wouldn't need a minimum wage, right?

Let me ask you about the fact that you went on the floor I guess in February of '16 and said that the president needed to get on with releasing his tax returns and a lot of people today agree with you. Our latest numbers show like, you know, almost three quarters of the country agrees.

Do you think the president should still do this?

CAPITO: Well, you know, I don't know see, you know, why he hasn't, you know, come forward with his tax returns. I mean, I guess it's a personal decision on his. He's already sort of made that decision and I think we need to move on to things that are more important, like getting the country moving again and more people working and higher wages and people can afford to go to school and improve themselves. This is what we need to be talking about.

WEIR: OK. Senator Shelley Moore Capito of West Virginia, thank you so much for joining us.

CAPITO: All right. Thank you. Thank you a lot.

WEIR: Have a great day.

CAMEROTA: OK. So, listen to this, Bill, our next guest asked for information about that taxpayer-funded sexual harassment slush fund, those settlements that were paid out secretly on behalf of senators or staff, and he was denied his request. So, we will speak with Senator Tim Kaine about that, and of course, the new tax bill. His thoughts, next.

(COMMERCIAL BREAK)

[08:26:09] CAMEROTA: Republicans are on the verge today of passing the biggest tax overhaul in 30 years and giving President Trump the biggest policy victory of his presidency.

Joining us to discuss this and more is Democratic senator from Virginia and former vice presidential candidate, Senator Tim Kaine.

Good morning, Senator.

SEN. TIM KAINE (D), VIRGINIA: Hey, Alisyn. Merry Christmas to you.

CAMEROTA: You as well.

Speaking of Christmas, I read that you said of the tax bill, quote, not everything moving around in the dark is Santa Claus which is -- what does that mean?

KAINE: Alisyn, it's a famous line from a great Virginia politician, Henry Howell, who used to say that about back room deals. He used to say not everything moving around in the dark is Santy Claus (ph), and he would call him Santy Clause.

And that's what I said about the tax bill. When we had the Senate vote two weeks ago, and it was 1:45 in the morning, and then we had the one last night, 800-page bill brought over from the House and voting on it at 1:30 in the morning, they don't really want the public to see it.

CAMEROTA: Yes, listen, you feel cut out. I understand Democrats feel cut out of the process, and you have certainly good reasons. Look, Republicans say that you were always invited in, but here's the upshot.

Republicans have long wanted a corporate tax cut, Democrats have long wanted a corporate tax cut, President Obama pushed for a corporate tax cut. You got a corporate tax cut, why not call this a victory?

KAINE: Because it's all for the people at the top end, estate tax and alternative minimum tax, but everything for the middle class is temporary or expires or actually makes matters worse. Alisyn, when we were voting two weeks ago in the Senate version, 1:30 in the morning, I put a simple amendment on the table. And I said, look, let's make all the middle class tax cuts permanent and let's reduce the deficits by a trillion, and you can do that if you reduce the corporate tax cut to 25, not 20. Thirty-four Democrats voted for it, because we didn't want to do tax reform, not a single Republican would.

The reduction of the corporate tax rate to 20 was much more important than giving middle class people tax relief, and that was the main problem with this bill.

CAMEROTA: It's 21, just for the record, it's 21, right?

KAINE: They opted to 21. They opted to 21 to give tax relief to people in the top income tax bracket. Again, it's not about the middle class, it's about the wealthiest and biggest corporations.

CAMEROTA: OK. While I have you, I have to ask you about what just happened in your home state of Virginia yesterday.

KAINE: Yes, wow.

CAMEROTA: So, I try to -- this was miraculous. I try to teach my kids when we go to the polls in our hometown that every vote counts. Here's living proof. In Virginia, the balance of power in the legislature was changed by one vote. Shelly Simonds, the Democrat, vote by 11,608 votes, that's what she got. The Republican got 11,607. One vote changed everything.

KAINE: Well, it's amazing, Alisyn, and you're right. That is the lesson. I campaigned with Shelly and have known her for a long time.

And as -- on election day, the Republicans had a 66-34 lead in our House of Delegates, but when the elections were over, we gained at least 15 seats. Yesterday in a recount in her seat, the 16th, she won by one vote and that means the balance of power in our legislature statewide, we have more than 8 million Virginians, changed for the first time in 20 years on the basis of one vote in the entire state, which is pretty amazing.

There are a couple other races that are in recounts still, but this will force a power-sharing arrangement instead of the GOP that has been in place for 20 years. CAMEROTA: Listen, it's head flapping and every teacher that talks

about politics will use this now as the abject lesson.

OK. Let me ask you --

KAINE: Shelly says everybody is going to call her landslide Shelly now, but she says she'll be happy if they just call her delegate.

CAMEROTA: Understood.

OK. Al Franken, your Democratic Senate colleague. There have been some calls for him to reconsider, for him to rethink his resignation and not to resign. Do you think he should resign or not?