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GOP Unveils Tax Plan; Paul Ryan Interview; Trump Applauds Tax Proposal. Aired 12-12:30p ET

Aired November 2, 2017 - 12:00   ET


[12:00:00] ANA CABRERA, CNN ANCHOR: Joining us AT THIS HOUR. "INSIDE POLITICS" with John King starts right now.

JOHN KING, CNN ANCHOR: Thank you, Ana. And welcome to INSIDE POLITICS. I'm John King.

A very big breaking news day here in our nation's capital.

More Russia meddling fallout. President Trump's nominee for a top Agriculture Department post is withdrawing today. Sam Clovis was the campaign supervisor for that former Trump adviser who wanted to set up campaign meetings with Russians and who is now cooperating with the special counsel. The president also has big economic news today on two fronts. A big job announcement at the White House just moments from now, and later today, his choice to lead the Federal Reserve.

We begin, though, with a policy and political fight over what you pay Uncle Sam. House Republicans, just moments ago, unveiling their ambitious tax cut plan. Now they have the daunting task of selling it.


REP. PAUL RYAN (R), HOUSE SPEAKER: With this plan, we are getting rid of loopholes for special interests and we are leveling the playing field. Are we going to let the defenders of the status quo win and see our country continue down this downward spiral, or are we going to realize the promise of our country, are we going to revitalize the American idea? This is our chance to make sure that generations to come don't just get by, they get ahead in this country.


KING: The Republican plan dramatically cuts taxes on corporations, offers relief to many middle class families and proposes to roll back popular deductions for mortgage interest and medical expenses. Republicans say it will help working families and create millions of jobs. Democrats call it a gift to the rich and big business. Speaker Paul Ryan -- you just heard him there -- will sit down in just a few moments with CNN's Phil Mattingly for his first interview -- a live interview -- since making that big announcement. We'll take you to Capitol Hill for that in just a few moments.

But our chief business correspondent, Christine Romans, is with us now live to separate what we'll call, Christine, the facts from the political spin.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: And this is just the starting point. There will be horse trading and there will be lobbyists galore from this moment on, John, no question.

Let me show you what the -- what it looks like at this point on paper here. You're shrinking this down to four different individual tax brackets. Keeping that 39.6 percent rate on the highest earners, people who made -- and the couples who make $1 million or more a year. That's a nod to some of the poor optics in the past few weeks that -- that looked like this was going to be more tax relief for corporations and rich people than it would be for the middle class. So that highest tax rate for couples making a million dollars or more.

What does it mean for your tax return? No change to the 401(k) provisions. This is really important for investors and workers here. No change to that.

A child tax credit that goes up to $1,600.

A mortgage interest deduction that is capped at $500,000 loans for new mortgages. Old mortgages are grandfathered in. You're seeing home builder stocks fall because there's some concern of what this is going to mean for the housing market.

A property tax deduction capped at just $10,000. That will be a tough sell in some of these high-tax states in the northeast and California.

And eliminating the state and local tax deduction, also a hard sell for some of those GOP congress members in the northeast.

It would repeal the AMT, though, and would end the estate tax by the year 2024.

The real centerpiece of this thing, I think, John, though, is the corporate tax cuts. The philosophy here is that if you can lower the tax burden and simplify the code for companies, they will create jobs in the United States, they will spend money in the United States and that will mean higher wages. So cutting the corporate tax rate to 20 percent and the pass through rate, these are for folks with small businesses, you know, that are doing their business -- their taxes on their personal returns, pass through, 25 percent, down pretty sharply here.

We're also told there could be a repatriation -- a one-time repatriation tax of something like 12 percent on all of that money companies keep stashed overseas. The big question I have, John, is, will that money, when it comes back to this country, will it go right to shareholders and buybacks, or will it go to build factories and create new jobs. And how much, overall, will all this -- all this cost.


KING: Christine, don't want to put you on the spot, so this is subject to amendment as you read the details of the plan. ROMANS: IT is.

KING: But as you just noted, the most important part for Republicans here is what they believe is pro-growth. They create millions of jobs, small businesses, big corporations. But as they try to sell this as a middle class tax cut, can they do that with a straight face?

ROMANS: They are trying -- you just saw that press conference where they are. I mean you heard Paul Ryan say again and again, paycheck to paycheck workers. If you're talking about the median family of four people and they're going to have $1,200 a year in tax relief, that's a great thing. But you want to see companies really spend that money that they get. All those tax goodies these companies are going to get, you want to see them growing jobs. And it's what -- it's frankly what the GOP is banking on and it's what a lot of -- a lot of economists are saying is -- is a -- is a stretch.

KING: Christine Romans with us breaking down the numbers.

Now let's go straight to Capitol Hill. CNN's Phil Mattingly sitting down with Speaker Paul Ryan, a key architect of this plan, now the key salesman for this plan.

Phil, you know he's worked a long time on this. His first interview, a live interview here on CNN, since it's unveiled.

[12:05:05] Take it away.


Mr. Speaker, thank you very much for your time. I know a very busy time.

I think a lot of people close to you would say that this is kind of your baby. This is what you came to Congress to work on. You care deeply about it. So let's talk some details here.

REP. PAUL RYAN (R), HOUSE SPEAKER: Happy to do so.

MATTINGLY: I want to -- we just saw the press conference. You listen to the press conference. I know what your guys focus was in the press conference. But kind of from the 30,000 foot level, can you guarantee that all middle class taxpayers will see a tax cut? I know what your models are.

PHIL MATTINGLY, CNN CORRESPONDENT: Mr. Speaker, thank you very much for your time, a very busy time.

I think a lot of people close to you would say this is kind of your baby. This is what you came to Congress for. You care deeply about it. Let's talk some details here.


MATTINGLY: We just saw the press conference, listened to the press conference. I know what you guys' focus was on the press conference. But coming from the 30,000-foot level, can you guarantee that all middle class taxpayers will see a tax cut?

I know what your models are --

RYAN: That's the entire purpose of this. And I just tell people, take a look at what the bill is. Do your taxes. If you have some kids, take that number of kids and multiply it by $600 because that's the increase in your per child tax credit.

Instead of for a couple not paying taxes on your first $12,000, you're not going to pay taxes on your first $24,000 in income and all, by the way, your tax rates are going down on top of it.


MATTINGLY: -- you can certainly say that there's not going to be models that we see come out in the next two weeks, three weeks --


RYAN: Oh, I am sure there are some --


RYAN: -- I'm sure that some bias groups maybe from the Left will come up with some of their own modeling but it's very clear and obvious that the whole purpose of this is the middle class tax cut, to give people more take-home pay.

And, yes, we are not lowering the top tax rate that millionaires pay. We are not lowering that rate. But we're lowering the rates for everybody else. And more to the point, we have to get faster economic growth because with faster economic growth, you get bigger paychecks. You get bigger wage growth.

And we are almost dead last in competitiveness in the industrialized world with our tax code. We're putting ourselves in the front of the pack with our tax code with this. By getting our tax rates down and leveling the playing field for American businesses, so we literally don't penalize American businesses competing in the global economy, we're going to get more take-home pay. We're going to get faster economic growth, more jobs.

This all leads to higher standard of living and bigger paychecks. That's the purpose of doing this. And we are very excited about doing this because we really think, without this, we can't reach our economic potential.

But with this we really think we can reach our economic potential. And that's the kind of break that families are looking for in this country.

MATTINGLY: You've been blunt throughout. This isn't easy. There's a reason --


MATTINGLY: -- there's also been talk that perhaps there is a fallback at some point if this gets too complicated.

Can you commit now?

The president, who likes the word "cut" a lot, apparently, according to some bill title --


RYAN: -- tax cut jobs bill.

MATTINGLY: Yes, you put it in there.

Can you commit that you will not fall back because of political imperative on just to cut --


RYAN: -- you really -- let me put it this way, Phil. If you just try and trim taxes a little bit and keep all the special interest loopholes, then the status quo will stay the same. You have to reform this tax code.

By the way, by -- the people who enjoy almost all of these loopholes are people in the very end of the income scale, people who have connections, people who can afford tax lawyers and accountants to navigate the tax code.

By getting rid of so many of these loopholes and just lowering everybody's tax rates, you make the system much fairer for people. And then on the business side, we are taxing our businesses, big and small, at much higher tax rates than our foreign competitors tax theirs. And we're losing as a result. We have all these businesses that will make money overseas and they can't bring it back into this country to reinvest in jobs because of our goofy tax laws.

You have to reform the system in order to fix those problems and that's why this tax reform and tax cut is essential.

MATTINGLY: So December 23rd or 24th, you still have problems. A cuts only bill is not on the table.

RYAN: Phil, you are trying to ask me to negotiate with myself and to concede defeat before we even get victory. We're going to get this done.


Because the American people deserve this. We're going to get this done because we ran for Congress. We said in 2016, this is what we are going to do. And more importantly, we know that this is necessary for faster economic growth, for bigger paychecks, to give people some confidence in this country and get our country back on offense, economically speaking. MATTINGLY: A few years ago in a speech, you said, "Our fiscal policy and our foreign policy are on a collision course and if we fail to put our budget on a sustainable path, we are choosing to decline as a world power."

This is supposed to be a $1.5 trillion tax cut. I understand dynamic scoring but I also understand that recent history doesn't necessarily bear that out in all cases --


RYAN: -- let me get you there. Recent history hasn't shown reforming the tax code like we haven't since 1986. This gets us the kind of economic growth that will actually increase GDP, increase revenues.

So we think we are in the middle area on what this is going to produce for our country. We are convinced this is going to give us faster economic growth and bigger paychecks. That's really important so, to your point, Phil, you are right. And I stand by those words. We have got serious foreign policy problems. We have serious budget problems.

But we also have an economic growth problem. We have to fix all of those problems. But you can't fix your fiscal problems if you don't have a growing economy, that people aren't going to work and paying taxes. That's why a key part of our agenda is getting this economy going faster and giving people more peace of mind and bigger paychecks. That's good for everybody, especially our fiscal policy.

MATTINGLY: But on its face, does debt matter to Republicans?


RYAN: Yes, it matters. And help getting our debt down, you have to control entitlements and reform entitlements. Unfortunately, the Senate couldn't pass the health care bill. We're going to keep working on those issues as we go on.

But we also have to grow the economy. This is a key component of our debt reduction efforts, which is growing the economy. And the best thing we can possibly do to get this economy growing faster is tax reform and tax cuts.

MATTINGLY: After meeting with the president this week, you said that you guys are linked, the president is all in.

You look back over the course of the last 10 months, has there ever been a moment where the president has set you back legislatively?

RYAN: Well, what we did in the health care bill was the House passed its bill; the president supported it and the Senate kind of went in a different direction. And so what we really labor to do this year, this time around on tax reform, is get the three of us working all year long on this project.

So since the beginning of the summer, you had the White House, the Senate and the House, working together, hand in hand, every single week, to put together this tax framework and now this bill that we just released from the Ways and Means Committee are the details with inside that framework.

So we really worked hard to make sure that we got on and stayed on the same page between the House and the Senate and the White House. And that's why I'd say this effort is a little bit different than other efforts.

Traditionally, with legislation, the House does its thing; the Senate does its thing and they try to get (INAUDIBLE) on the president's desk and he signs it. What we wanted to do is make sure that we remove any kind of big disagreement and get on the same page. And that's what this reflects.

MATTINGLY: But he called the health care -- your health care bill "mean" at one point. At one point he was taking the 401(k) issue off the table, even though it was very much in discussion in the Senate Ways and Means Committee, brought the individual mandate onto the table, even though that was never in the discussion.

How is that helping?

RYAN: He's always throwing ideas in the pile. There is nothing wrong with that. There's nothing wrong with giving input and ideas. We do it quite a bit privately and sometimes he does it publicly.

MATTINGLY: And that doesn't undercut your efforts?

It doesn't bother your members?

RYAN: Not in the least.

MATTINGLY: White House chief of staff John Kelly said Monday that it's very distracting, the Russia investigation and the indictments that have been going on.

Given what's going on, how -- if it's very distracting, does that not hinder a process, where you need everybody all in?

RYAN: I don't see it as distracting. We're -- we have Russia investigations right here. We have a Russia investigation in the House. There's a Russia investigation in the Senate. Oh, and, by the way, we can walk and chew gum at the same time.

The House Intelligence Committee is doing the Russia investigation. The House Ways and Means Committee is writing the tax bill. Every single week here in Congress, we bring different pieces of legislation to the floor.

That is our job as legislators, is to multitask, to understand all the concerns and frustrations that our constituents are facing and to address and deal with those things. So we are doing all of these things at the same time, which is what Congress is supposed to do.

So I really frankly don't see this as much of a distraction. You are always going to have high pressure moments and high intensity issues. The job for members of Congress who are elected by our constituents to fix their problems, is to focus on their problems.

And I think the tax reform is one of the key issues that we can do to address people's problems. That's why we are so focused on it.

MATTINGLY: Earlier this week, you were asked about the indictments of two individuals plus a guilty plea that worked for the Trump campaign. And you said nothing is going to derail what we're doing in Congress because we are working to solve the American people's problems.

I know what you are trying to say there but what you hear from a lot of critics is Speaker Ryan will ignore everything the president says, tweets, does or perhaps --


RYAN: -- I don't think I do that --

MATTINGLY: -- so long as his legislative agenda will pass --

RYAN: -- no, I don't think I do that. I -- well, first of all, the question was, does this derail tax reform?

And I said, no, -- two guys getting indicted for something they did before the presidential campaign started is not going to derail tax reform.

And by the way, it's our job to multitask, as I just answered in your previous question. So let's just put it the other way around.

So two guys get indicted and then Congress is going to stop trying to cut people's taxes, trying to get people middle class tax reflect, trying to reform our tax code so we stop sending jobs overseas?

I mean, that would be ridiculous.


RYAN: My answer to that question is we need to focus on all of these things. We have an active Russia investigation going on right now. We are paying attention to these things. And I have since come up to speed on these indictments because I think I needed to do that.

But at the same time -- but at the same time, I'm not going to stop everything else we are doing to fix the country's problems. That's the point I'm trying to make.

MATTINGLY: Is there a tipping point, though?

And I know you don't do hypotheticals. But hypothetically --


RYAN: So you're going to ask me a --

MATTINGLY: -- no, but I think -- it's something that a lot of people are trying to figure out right now. This is -- (CROSSTALK)

MATTINGLY: --- special counsel is not at the late stage of his investigation. He's clearly still moving on. Is there a tipping point --

RYAN: In my view on that is let Bob Mueller do his job, let the professionals do their jobs. This is our Justice Department -- I mean, our justice system and the justice system needs to play itself out.

But that doesn't mean Congress should stop fixing problems. It doesn't mean we should stop solving the problems that our military is facing and our veterans are facing and facing career and technical education and reforming the tax system. All these things that we're working on, we need to keep working on because that's what we were elected to do.

That's what serious countries do, is they don't stop everything because something happened over here. We keep working on solving problems. And honestly, I think that's what people expect us to do. I don't think people want to turn on their TV and see Washington come to a screeching halt and get distracted from solving their problems. And that's why we are so focused on doing all of these things.

MATTINGLY: Last year you said in an interview, who pays shouldn't determine or guide what our policy ends up being when it comes to the tax code. You are delaying the estate tax repeal. You are keeping the higher -- highest rate. You're not touching capital gains.

Would conservative Ways and Means chairman of a couple years ago, Paul Ryan, support this tax bill?

RYAN: Absolutely. I'm excited about this tax bill. This tax bill reflects the framework that we negotiated all summer long. This tax bill is what we're going to need to do to get this economy hitting 3 percent growth, which I think we can with this tax bill. This tax bill gives the average family of four about a $1,200 tax cut.

I think that is going to be helping people who are living paycheck to paycheck. So absolutely. I think this is a game changer for our economy.

MATTINGLY: Last one, because I know we need to wrap up here. The (INAUDIBLE) to the terrorist attack, both in tweets and what he said, sending people to Guantanamo, saying that he should get the death penalty.

Do you believe that's the proper way for the president to react?


RYAN: I think -- I'm pretty sure they arraigned him already in federal court. So I'm pretty sure he's going to go through the federal court system, if I'm not mistaken. This is a bad guy. He's a terrorist. Obviously I think that's already an established point. But again, I think the justice system should just play itself out.


MATTINGLY: -- advocating for the death penalty from the Oval Office?

RYAN: I think that's the president prerogative to do that. I think we should hold people to account. I think there's no -- there should be no safe harbor in any way, shape or form for terrorists. But as far as I'm concerned, let the Justice Department and let the justice system play itself out.

MATTINGLY: Mr. Speaker, I know you are a busy guy. Thanks -


RYAN: -- take care.

MATTINGLY: -- for taking the time.

[12:16:25] RYAN: All right. You bet, Phil. Take care.

MATTINGLY: John, back to you.

KING: Phil Mattingly, thank you very much, from Capitol Hill. Please thank the speaker for his time on this important day.

Let's discuss what we just heard there from Capitol Hill.

With us to share their reporting and their insights, Jonathan Martin of "The New York Times," Mary Katharine Ham of "The Federalist," CNN's MJ Lee, and CNN's Abby Phillip. Day one. Welcome, Abby Phillip, full time here.

Interesting there. I think Republicans are in a good place in trying to sell what will be a controversial, both policy-wise and difficult political plan with the guy from Janesville, who knows the subject. You heard him there with Phil Mattingly. He knows the obstacles ahead and the speed bumps ahead. As -- let's discuss what we just heard from the speaker but also what we have now in this new proposal. I'll start here and just make our way down. What jumps out at you as thy -- as they try to sell this as the biggest obstacle?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, I think there are definitely some things that seem like they are opening salvos that probably will not end up in the final bill, including that their -- that this is a very expensive proposal. It's clearly going to blows through the budget. They're not opting to get a little bit more income from top earners. They could have done that with the top tax bracket. They chose not to do that.

And I think that there are some things that the president wanted, like, for example, a permanent 20 percent corporate rate, which a lot of people agree is just going to be extremely expensive. It may not even work with congressional rules around how tax bills need to be written. And I think that's going to be -- have to be renegotiated to some extent or they're going to have to find more money from somewhere.

MJ LEE, CNN NATIONAL POLITICAL REPORTER: Yes, that was a really excellent interview by our colleague Phil. And one of the really smart questions that I think he asked off the bat to Speaker Ryan was, can you guarantee that this will not end up becoming just a cuts bill? And I think this is going to be a really critical issue.

One person in Washington who doesn't really mind -- one Republican who doesn't really mind if this ends up becoming just a cuts, cuts, cuts bill is President Trump. We know that he actually wanted to name this bill the cut, cut, cut bill. Obviously Republicans ended up not going with that name, unfortunately. We would have had a lot of fun with that.

But he is somebody who does not have sort of ideological beliefs, did not come to the White House, did not come to Washington with this being an ideological sort of crusade. The importance that a lot of House Republicans, Senate Republicans poled in making sure that some of these revenues are in there to offset these tax cuts, the president himself does not mind if those revenues are there to offset these tax cuts.

And which is why I think Phil also asked a very good question of, has the president ever sort of offset or hindered your ability to get things done legislatively. And I think Paul Ryan, you know, found a way to carefully answer that question, saying it's not a problem for the president to throw these ideas out there. But we'll see how the president handles this and if he ends up having the backs of these Republicans.

KING: Right, and that was -- I'm sorry, and that was very diplomatic on the speaker's part --

LEE: Right.

KING: In the sense that, remember, the president called his House bill mean, the health care bill, and that's one of the challenges going forward.

And you heard the speaker, Mary Katharine, say, they don't think they're going to make the same mistakes. It's Obamacare. They've been on the same page. They've been working with the Senate and the president trying to keep this on one foot.

(INAUDIBLE) I just want -- let's read from the president. Here we have a reaction -- first reaction from the president of the United States. I applaud the House Ways and Means Committee for introducing the tax cuts and jobs act, which is another important step toward providing massive tax relief for the American people. We are just getting started and there is much work left to do. The special interest will distort the facts. The lobbyists will try to say there are special deals -- roll that up for me, please -- and some in the media will unfairly report on our efforts. But my administration will work tirelessly to make good on our promise to the working people who built our nation and deliver these historic tax cuts and reforms, the rocket fuel our economy needs, the president says, to soar higher than ever before.

You're raising your finger. Go.

JONATHAN MARTIN, "THE NEW YORK TIMES": The word deficits, not mentioned in that statement.

[12:20:01] KING: Right. Right.

MARTIN: This president does not care about deficits. And have -- and to prove the point, unlike most every other major figure in his party has completely (ph) said he doesn't want to touch entitlements. And so this is not someone who cares about deficits.

And the point I'm trying to make here to sort of -- after what MJ was saying, is that if this thing is stall and it's sort of hanging around the Ways and Means Committee or the Finance Committee in the Senate, this president's not going to tolerate that. He is going to push for a tax cut bill rather than some grand effort at tax reform that can't find the votes because, again, he's not focused on trying to find offsets to avoid increasing the deficit. He doesn't care about that.

KING: But it is interesting. MJ makes a great point, the president's not ideological per say. He wants cuts, cuts, cuts. Most of all he wants win, win, win.


KING: After -- we're nine months in -- nine and a half months in and Obamacare is still the law of the land. It's not happening this year, the repeal. And his infrastructure plan, he never bothered to introduce. Those were two of the three things he said he would get done in year one. The only thing left that's possible now is tax reform. And yet the president did (ph) have a big influence on this bill.

You heard Phil try to put the question to secretary of state -- I'm joking, Speaker Paul Ryan being diplomatic about the president's involvement. But if Marco Rubio or Jeb Bush or any of the other Republicans were president, this tax cut plan would have dropped that top rate. Without a doubt would have dropped that top rate. That's Republican philosophy.

If this were a week ago, this tax plan would have had some restrictions on 401(k)s to try to pay some of this bill. The president said, don't do it. It's not here. The question is, what's his role going forward?

MARY KATHARINE HAM, "THE FEDERALIST": Well, and I think stipulating, he doesn't care about the deficit. Some of those things are good opening pitches to red state Democrats because they were things that they were worried about. 401(k) is a bit of a third rail in this kind of thing.

Look, I think structural tax reform is a more responsible and fair and productive path. It's also way more complex and harder to sell than cut, cut, cut. Should have just slapped that name on it and gone with it, as MJ says.

KING: No matter what it does, slap that name on it.

HAM: But a couple of things I noticed from this morning was the state income tax. People are worried about the folks from high tax states like New York and New Jersey revolting. Even Democrats did not come out of the Ways and Means briefing enraged by the $10,000 cap. So that seems like somewhat of a good sign for them.

And then red state Democrats, particularly in Trump -- in Trump areas where they are up for election, has signaled some willingness to listen and to play ball in this. And I think some of those changes from what we were hearing last week reflect an attempt to bring some of those guys on. It remains to be seen whether everyone can stay on the same page and actually make that sale. But there's stuff in here, like the child tax credit and the standard deduction up that are easy pitches that people understand.

KING: And yet, to your point, again, they say they won't repeat the mistakes of the Obamacare repeal debacle, but you do have those -- the high tax state lawmakers still questioning this. They say they -- the property tax up to $10,000 is a bit of a concession to them, but not as much as they wanted.

Now we have the House Ways and Means Committee. Then we'll have the full House. Think back to the Obamacare debate. Then it goes to that place known as the United States Senate.

Marco Rubio, to your point about the child care credit, Marco Rubio has made this a project of his for some time. He tweeted this morning, House tax reform plan is only starting point. But $600 child tax credit increase doesn't achieve our and POTUS goal of helping working families. And that's an Ivanka Trump priority, the child tax credit.

Again, it's early in the process. You expect everybody to plant their flags. But this is what happened to Obamacare. Medicare cuts couldn't be sold to Murkowski and to Collins. It didn't cut as much or pull back enough for the conservatives. Are we going to enter that same land mine?

LEE: Yes, I think you're absolutely right. But in the big picture, the Republicans are facing the exact same issues that they faced when they were really desperately trying to get this Obamacare repeal bill done and they ultimately couldn't. And I think now, added to that, we are now two, three months down the road already. We are approaching the end of the president's first year in the White House and Republicans are feeling more and more pressure to get something done.

And I think, in the end, we will end up seeing some Republicans choosing between, you know, whether to get something done and vote "yes" for something that is not perfect, or, you know, choosing to stand their ground and saying that some of these policy issues are too important for them.

MARTIN: President Trump flayed lobbyist in his statement just now. But one man's special interest group is someone else's key constituency. Now, when you're talking about the realtors and the home builders who have a lot at stake here when you talk about this -- this mortgage deduction, that -- those are key groups, John. If you pull up the list of the biggest donors among Washington lobbies, among PACs here in D.C., guess who you're going to find year after year after year? The realtors and the home builders. That have a lot of swath on Capitol Hill. Watch those groups and how they react to this bill going forward.

KING: And that's why their --

HAM: For that reason, by the way, I'm glad they sort of touched this third rail. It may not end up this there because it is something that a lot of people are invested in, particularly in sort of high real estate priced state with this $500,000 cap. But this is the kind of thing that you have to touch in order to actually reform things. And so I (INAUDIBLE).

KING: Well, and, again, I don't -- I'm king of beating -- I sound like I'm beating a dead horse here, but it's another parallel to the Obamacare debate in the sense that you have an existing infrastructure now. Like Obamacare, you have this existing tax infrastructure. And when you try to rip it out, even if you think you're right on the principle or right on the long term projection, it's hard because of the vested interest groups involved.

[12:25:15] And it's just beginning this conversation. That's why the Republicans want to do it on a fast track. They want to get this done before those special interest groups can rally those members to be opposed to it.

When we come back, though, another big development in the Russia meddling investigation. The president's choice to take a key post at the Agriculture Department withdraws. Why? Because of his connection to the Russia investigation.


KING: Welcome back.

New information today showing that Special Counsel Robert Mueller's probe is sinking deeper and deeper into the day-to-day operations of the Trump administration. Yes, the administration now confirming just a short time ago the president's nominee to be the chief scientist at the Agriculture Department has withdrawn for consideration. Sam Clovis pulled his name today amid revelations he had worked with George Papadopoulos, the former Trump campaign foreign policy adviser, who admitted he lied to the FBI. Papadopoulos now cooperating with the special counsel investigation.