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House Tax Vote Today: Future of Senate Bill Unclear; Roy Moore Facing New Allegations; Jury Deliberates for 8th Day in Menendez Corruption Case. Aired 10-10:30a ET

Aired November 16, 2017 - 10:00   ET




POPPY HARLOW, CNN ANCHOR: -- for the Senate's bill is squishier than ever. At least one quite conservative Republican now says he's a no, another one has concerns. Our Manu Raju joins us on the Hill with more. Wow, I mean, Ron Johnson coming out from Wisconsin against this thing was a huge surprise, and now, they don't know if they have the votes.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes. Open question about what exactly happens in the Senate after Ron Johnson said yesterday that he would oppose this bill because of his concerns about how the tax breaks affect small businesses versus large corporations. He got on the phone last night with President Trump who called him almost immediately to try to assuage those concerns.

Now the important thing to remember is that he's suggesting on he does want to support a bill at the end of the day and Republican leaders are confident that they could eventually get him to support the bill. But there are others who are not as supportive of the approach that the senators are taking, including Susan Collins of Maine, one of the main moderates who told me yesterday that she has concerns about adding the repeal of the individual mandate of Obamacare on to the tax bill because it could raise premiums and essentially wipe away some of the tax breaks that some people may get from this bill. Others are concerned about some of the potential deficit increases including senator Bob Corker of Tennessee, said he would not vote for any bill that would raise the deficit at all.

So a lot of questions emerge after today when President Trump comes here to the House to actually push this, try to -- a pep rally of sorts to try to push this bill over the finish line. We do expect it to get past the House today. What happens in the Senate after it passes the Senate Finance Committee this week, uncertain about its prospects on the Senate floor. Something they'll take up after Thanksgiving. And then can they reconcile the differences between the House version and the Senate version and get a bill over to the president's desk. So today's one hurdle will be cleared, passing the House but a lot of hurdles still ahead if they want this to become law later this year, Poppy.

HARLOW: Manu Raju, this is a win that Republicans need. Will they get it? Who knows at this point. Thank you very much.

Our chief business correspondent Christine Romans is here now with what this actually means for you at home. No political spin. No political spin for the next few minutes, just the facts. What do we know?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The fact and the numbers, Poppy. We know there are now two versions of the tax bill, the House and the Senate. That it is judgment day today for the House bill and the House plan cuts taxes significantly next year but favors the wealthy over time.

Here are the numbers, on average American incomes will rise 1.6 percent, next year, that's about $1200. By the year 2027, the average shrinks a little bit to 0.9 percent, that's about $860 extra. These tax cuts differ depending on how much money you make. For the bottom half of earners, that's right here on the top two here, the cuts are less than 1 percent of their income. For those at the top, the biggest earners it's nearly 2 percent. You look at these yellow boxes, orange boxes here, that's 2027.

The cuts for the lower income levels have nearly vanished and the top earners are still benefiting, so why? Republicans need to pay for tax cuts so they're frontloading some middle-class goodies like child tax credits but they will expire in 2023 cutting into tax savings. But also reducing costs, and that's important here because you have to pay for tax cuts.

Paying for tax cuts is one reason the Senate version repeals the Obamacare mandate. 13 million fewer Americans will be insured. Not paying for those people saves the government $338 billion but also means you will see premiums rise maybe 10 percent a year. That's because the mandate forced younger healthier people to buy insurance and critics like Senator Susan Collins worry that those higher premiums right there will actually wipe out middle-class tax relief.

Now eliminating that individual mandate just one difference between the Senate tax plan and the House tax plan, the Senate plan has seven tax brackets, it lowers rates across the board, it lowers rates for pass-through entity. These are the small and big sized businesses that aren't big corporations. But that sunset, that pass-through sunsets, lowers the corporate rate in 2019 but that's permanent and that's where some of the controversy is coming from conservatives.

HARLOW: It is, indeed. Christine Romans, thank you so much. Stick around. We want your analysis after this.

Let's discuss with Republican Congressman Jason Lewis of the great state of Minnesota. He is on the House Budget Committee. It's nice to have you here. Thanks for joining us.

REP. JASON LEWIS (R-MN), BUDGET COMMITTEE: Great to be here, Poppy.

HARLOW: So let's begin with this. You're on the House side to be clear, but on the Senate side, the only cuts that they make permanent as you know are the corporate tax cuts. LEWIS: Right.

HARLOW: If that is in the final legislation that you guys end up voting on after today, could you vote for something where all of the tax cuts on the lower brackets, middle-class, all individual Americans, sunset, with the corporate tax cuts are there forever?

LEWIS: Well 10 years is a long time. So there's plenty of time for legislation to correct some of that. And I think --

HARLOW: Maybe.

LEWIS: -- that's the origin of Senator Johnson's concern. So it is a problem. I think all the cuts ought to be permanent. We're sort of ham strung by some of the reconciliation rules there, so they're looking for new revenue to make certain that happens. But I'm certainly in favor of making all of them permanent.

[10:05:01] HARLOW: And you wouldn't vote for something that just makes the corporate cuts permanent, right?

LEWIS: I'm not going to -- I'll reserve my vote when we see the final bill that comes out of conference. This is a holistic approach. This is a big deal. The last time - I mean, take a look at when we've cut taxes in the past in the 1920s with Andrew Mellon, the economy took off in the 20s, JFK, 1960s the economy took off. We balanced the budget in '69. Regan in '86, the economy took off. We balanced the budget in 1998. The point of this is not an individual provision. The point of this is economic growth and a rising tide which will make up for a lot of that revenue.

HARLOW: Sure. But you also saw the deficit balloon in many of those examples and you guys -- Republicans don't want to see that. But let's move on to your district. You represent the second district of Minnesota. You've got some big corporations headquartered there. You've got Blue Cross Blue Shield of Minnesota is in your district. You've got 3M, a huge, you know, multinational company in your district.

And Gary Cohn, the White House chief economic advisor said the CEOs, the big CEOs are going to like this the most, and that is fine if it trickles down to the workers there, right? If it means higher pay, if it means -

LEWIS: We have -

HARLOW: -- more cash in their pocket. Let me finish the question. It's fine if it means more jobs. My question to you is can you guarantee your constituents that the benefit to those companies is going to trickle down to them?

LEWIS: Well, of course. I mean, do bankrupt corporations hire more people? Usually -

HARLOW: They're not going bankrupt. LEWIS: Poppy, let me finish. Usually, corporations that are profitable hire more people. We have the highest corporate industrialized world, the highest corporate rate at 35 percent. It's actually higher than that in Minnesota because we have very aggressive income tax there. Why wouldn't you want to lower that so we can compete abroad and repatriate $2.5 trillion, $3 trillion back home?

HARLOW: I hear you. Are you saying that 3M right now is not profitable and you're at risk of losing 3M being headquartered in Minnesota if this doesn't happen?

LEWIS: I'm saying that companies like Medtronic out of the twin cities did a double Irish, that's not a drink anymore. That's when you move abroad for a tax strategy. We don't want more of that. We don't want $2.5 trillion sitting offshore because when we come -- when that money comes back we're the only country to tax it twice. We want that money invested in Minnesota in the second district.

HARLOW: We do. But here's what I'm asking you, I'm not asking if they should have a tax cut, what I'm asking you is should there be some limits on it because of the examples of what we saw the tax holiday in 2004. That money didn't go back and reinvest and didn't go back into more jobs, it went back to dividends and share buybacks. What I'm asking you is can you guarantee or do you want some guarantees on this that a lot of this tax saving is going to go down to the workers?

LEWIS: Well no, of course you can't guarantee anything and I can't guarantee that a tax increase will balance the budget. It clearly hasn't. It's spending and tax increases could balance budgets we would be an economic juggernaut. We have been growing at 2 percent for a decade. Just now we're starting to grow faster because the markets have baked in tax reform. The danger here for the economy is if we don't get something done this month or next month I should say.

HARLOW: Are you worried - so let me ask you this way, are you worried that it may not trickle down to your constituents that need it the most?

LEWIS: No because if you look at the history of this tax reduction and simplification, whether as I say in the 20s, 60s or 80s, it has always trickled down. We have median family incomes now stagnated for the last 10 years and we've been spending and taxing like nobody's business. We need to try a different approach and that's what we're doing here.

HARLOW: OK. As you know -

LEWIS: By the way -

HARLOW: Go ahead.

LEWIS: The standard deduction of doubling from 12,000 to 24,000 for a family of four will more than take care of any itemized deductions that we repeal in order to get lower rates. So I don't want to preserve these carve outs for the well-to-do and hold middle-class tax cuts hostage to them. HARLOW: Let me ask you about the concerns of your fellow Republican, Susan Collins. One of her big concerns is that if you do on the Senate side what they're talking about doing, which is wrapping up repealing the individual mandate from Obamacare in this, that would mean according to the CBO, 13 million fewer Americans with health coverage in a decade because many wouldn't buy it, but if they don't buy it, those younger healthier people, that means premiums go up 10 percent and that negates the middle-class tax savings. Are you worried about that?

LEWIS: Well, let's just see what happens, coming out of the Senate bill. You know it's going to come out of finance, get marked up there, then go to conference, in a perfect world that probably wouldn't be in there. They're looking for money on the other side. I like our House bill, frankly. I'm going to vote for that in a few hours here, excited to do that. So hopefully we do get a bill that's close to that.

HARLOW: Are you concerned with -- in your neighboring state, the state of Wisconsin, Republican senator Ron Johnson says he is a no right now because he feels like, you know, you also have red wing shoes, for example, in your district. He feels like companies like that, these pass-through corporations, wouldn't get as much of a tax cut and they wouldn't right now in the current legislation on the Senate side as the big corporations. Does that bother you that they would be paying a bit higher rate?

[10:10:00] LEWIS: If you take an LLC or sole proprietorship from 39.6 to 25 max and 9 percent for most of them, that's a pretty substantial cut of 40 percent. I am concerned that we don't make the individual cuts and these pass through companies file on their individual returns, we don't make those permanent. I think they ought to be permanent as well.

HARLOW: Congressman, before you go, I have one question on the Alabama Senate race. Of course, Republican Senate candidate Roy Moore there, knowing what you know now, do you feel like he should continue his run or should he drop out of this race given the seven separate women coming forward with these accusations?

LEWIS: I'm extremely troubled by all the accusations as everybody is. But I'm busy in the second district of Minnesota. We will let the individuals of Alabama sort that out.

HARLOW: You don't think it's an important issue to weigh in on, sexual misconduct, sexual abuse and assault that alleged against 14 to 16- year-old.

LEWIS: I think it's very troubling.

HARLOW: Do you have a problem if he sits in the Senate if he wins?

LEWIS: Well, it depends on what the citizens of Alabama decide and what the other chamber -- I'm not in the Senate, I'm not in Alabama. I'm trying do the best I can for the second district in the House.

HARLOW: Congressman Jason Lewis of Minnesota. We appreciate your time, thank you for being here.

Joining me now again is Christine Romans from the great state of Iowa where he was born. Let's talk about this. You know his point is an important one, but he's also promising that this will trickle down. He's saying it always has but it always hasn't trickled down to the worker.

ROMANS: This is the religion right now in the Republican Party. That there's so much less worry about deficits and adding to the debt and this just belief, this belief that this money is going to go into the pockets of workers and it's going to go into worker wages. And when you listen to earnings calls as we do, you know, these companies report their quarterly profits and you listen to the CEOs and the CFOs talk to the analysts on Wall Street.

The analysts ask them what you will do if you get a tax cut. What are you going to do repatriate the foreign tax cuts back here? And almost all of them talk about share buybacks and dividends. The first thing that we do is give their money to their investors. Now maybe that strengthens the company and maybe that eventually somehow -

HARLOW: Is what he said factual, Christine? That it always comes back -

ROMANS: No. Recent memory is it has not come back to help workers.

HARLOW: Right.

ROMANS: Recent memory is that it hasn't. But every time you've had tax cuts or tax increases for that matter, it's been a different set of scenarios. You know?

HARLOW: And I think there's a problem because I think it's automatically read by you know lawmakers or our viewers, you know, people that oppose this are just against corporations getting tax cuts. And he's right that companies like Medtronic, they do these inversions and they go put their money overseas or headquarters overseas when their companies are really American, and we get that and we don't want that. But at the same time, you can put some restrictions on what is done with this money, can't you?

ROMANS: I think politically there's a concern that you start putting restrictions on and less likely to pass some sort of corporate tax reform. I have felt all along that this entire process was about corporate tax reform. This is something the Democrats tried, President Obama wanted to do. There's broad agreement that 35 percent stated rate is just stupid. It really is stupid.

HARLOW: So high.

ROMANS: You've heard some really, you know, important people in the economy say it's just Darwinism really. The United States can't go on that long with having a stupid tax code. The question is, is this the right way to do it and could you put restrictions? I've heard some really smart business people say they would love the foreign profits to come back, put some kind of tag on it, for example. The first 30 percent of your foreign profit that comes back must be earmarked for infrastructure builds, some sort of public/private infrastructure partnership and make sure that it goes to job creation and fixing the problems in the infrastructure of our economy. But politically that's difficult to get through when you have all of these moving parts in tax reform. Tax reform is hard and why it hasn't been done since -

HARLOW: I was -- yes.

ROMANS: You had braces -- before I had braces.

HARLOW: Christine Romans, thank you very, very much.

We are following all of this breaking news on tax reform on the Hill today. The president arriving on Capitol Hill in just moments and two more accusers speak out against Roy Moore, but the Senate candidate has three words, bring it on.


[10:18:27] HARLOW: This morning new accusations against embattled Senate candidate Roy Moore. Two more women tell "The Washington Post" that Moore made unwanted advances towards them when they worked in a mall in Alabama years ago. Those accusations come as Moore's lawyer tries to poke holes in another accuser's story. Moore's team is demanding that she hand over a yearbook that she says Roy Moore signed years ago, 40 years ago. You see it there. His team is questioning that signature.

Jason Carroll is in Gadsden, Alabama with the latest. We just learned that Roy Moore is going to be speaking at this faith leader's coalition in Birmingham later today. He is defiant and in his words he says bring it on.

JASON CARROLL, CNN CORRESPONDENT: Right. That is correct. He will be speaking at a faith leader's press conference in Birmingham but still unclear if he will actually take questions. He has said in the past that the reason he hasn't done that is because he's going to be filing a civil suit, and he's limited, he says, in terms of what he can say. But he has been active on Twitter as you say he tweeted out last night to his detractors, to his critics saying, quote, "Bring it on." That message directed at folks like Senate Majority Leader Mitch McConnell and other GOP leaders in Washington who have distanced themselves from Roy Moore at this point.

His attorney making a special effort to go after the fifth accuser who came forward, Beverly Young Nelson, you remember she came forward on Monday giving that very tearful account of what she says happened to her when she was 16 years old.

[10:20:01] She says Roy Moore sexually assaulted her. She presented a yearbook, her high school yearbook that he says -- that she says that he autographed. Roy Moore's attorney says he doesn't believe that.


PHILLIP JAUREGUI, ATTORNEY FOR ROY MOORE: We demand that you immediately release the yearbook to a neutral custodian so that our expert, you can send your export as well if you would like to. So that our expert can look at it, not a copy on the Internet, the actual document, so that we can see the lettering. We can see the ink on the page. We can see the indentations. And we can see how old is that ink? Is it 40 years old? Or is it a week old? Release the yearbook so that we can determine is it genuine or is it a fraud?


CARROLL: Well, Nelson's attorney Gloria Allred tells CNN that the yearbook is authentic and she says, she's perfectly willing to present it to an independent source to take a look at it, if Roy Moore is willing to appear before a Senate committee. Poppy?

HARLOW: Jason Carroll, put him under oath. Jason Carroll, thank you very much.

Let's get more perspective from Alabama. Joining us now, Bill Britt, editor in chief of the "Alabama Political Reporter," great to speak to you. Thank you for being here with us. Bill, we've had you on a lot, you know, through this election, talking about it before he won the primary and on, but as we sit here this morning, the number of accusers has now risen once again to more going to "The Washington Post." Do you see or hear any change amongst voters in Alabama, though, on this?

BILL BRITT, EDITOR IN CHIEF, ALABAMA POLITICAL REPORTER: Poppy, thank you for having me on. I appreciate that. There is the biggest shift is within the Alabama GOP. They had a meeting last night of the 21 member steering committee which enforces the rules. This is the hierarchy of the party here in the state, and they came out of that meeting not unified because we didn't get a press release or a press conference. Our sources are telling us that there are splintering among the Republicans. Now locally, a lot of the powerful GOP chairs, the county chairs, are standing with Roy Moore and we haven't heard a word yet from the Congressional delegation in D.C.

HARLOW: There is a 2:00 p.m. event today in front of the Faith Leaders Conference in Birmingham where he will be speaking. He is defiant, his words, bring it on, and I'm just wondering what you've seen in the district that you live in, in terms of whether or not anyone who is going -- a Republican who is going to vote for Roy Moore will actually vote for the Democrat Doug Jones now?

BRITT: Well, Poppy, we have two football teams in Alabama that everyone knows about, that's the University of Alabama Crimson Tide and the War Eagles of Auburn. Just because a coach or a player is found to have done something terrible, they're not going to switch teams. If you're an Auburn guy or gal, you will be an Auburn fan when it's all over. Just doesn't work that way down here.

HARLOW: So that's a no, with a very appropriate football analogy.

BRITT: That is a no.

HARLOW: There is one idea being floated by a Republican leadership in Washington that is a Hail Mary, of course, but I wonder what you think of it, and that is potentially having Luther Strange, who is sitting in the seat now after taking over for Jeff Sessions when he became attorney general, resign early to kick off essentially a new special election. Can you see that happening in any scenario?

BRITT: Well, a special election would have to be approved by Governor Kay Ivey and I don't want to speak for the governor but calling a new special -- the process would be that the election goes forward and if Roy Moore wins the election, after being decertified by the GOP, that's where it's got to start. The Alabama GOP has to decertify Roy Moore, and then there's an election. Once the election is over, if he wins, the Secretary of State, calls it null and void, then it can go forward. And as far as a write-in candidate, this will be a nightmare for the Republican Party. I don't know that it gives it to Jones, but it certainly is going to divide the Republican Party in Alabama and maybe for the next 10 years.

HARLOW: Yes. Wow. We'll see. The implications are big on so many different levels, but at the fore of it and what should always be is what these women said happened to them, some of them when they were children.

BRITT: Absolutely.

HARLOW: Bill Britt, we appreciate the reporting. Thank you.

BRITT: Poppy, thank you so much.

HARLOW: Happening now, the jury in the corruption and priory trial of Democratic Senator Bob Menendez still deliberating, beginning their eighth day of deliberation this morning. Some on the juries visibly fatigued.

Our Laura Jarrett reports after deliberating another 5 1/2 hours on Wednesday no conclusion yet. Menendez and his friend Dr. Salomon Melgen face combined 18 counts of bribery and other corruption related charges.

[10:25:05] Menendez is accused of trading government favors for 6- figure campaign donations, luxury hotel stays, private plane rides, you get the picture. Of course we're monitoring this and let you know if the jury does come forward with a verdict.

Live pictures now from Capitol Hill where in just an hour, less than an hour. The president heads there to rally Republicans ahead of the key tax vote.


HARLOW: Within the next hour, President Trump will be on Capitol Hill. He is trying to rally Republicans ahead of this House vote on the tax cut bill. But it is the Senate where this seems to be facing some major problems. At least one conservative, Republican Senator now says he is a no another one says they are concerned.