[Mike Pence, Vice President Of The United States:] The ayes are 51, the nays are 48. The Tax Cuts and Jobs Act is passed.
[Dave Briggs, Cnn Anchor:] Breaking news this morning, historic. A major rewrite of the tax code on the way. The Senate passed the bill early this morning. It gives Republicans their first major win of the year. Could it cost them in the midterms and what does this bill mean for you?
[Christine Romans, Cnn Anchor:] And a government shutdown could be days away. What's holding up lawmakers and what's most likely to happen by Friday. I love those congressional deadlines. Welcome back to EARLY START. I'm Christine Romans.
[Briggs:] Especially when they come on the Friday
[Romans:] Right before Christmas.
[Briggs:] before Christmas. I'm Dave Briggs. Thirty minutes past the hour. Thanks for joining us this morning. Historic news on Capitol Hill. Republicans' big tax overhaul is all but a done deal. In an early morning vote just a few hours ago, the Senate approved the final version of the bill, scoring Republicans their first significant legislative win since President Trump took office. The measure has proven unpopular in most polls. It passed along party lines 51-48.
[Romans:] The approval came over the objections of Democrats on the Senate floor and protesters in the gallery.
[Protesters:] Don't kill us. Kill the bill, don't kill us. Kill the bill, don't kill us.
[Pence:] The sergeant at arms will restore order in the gallery.
[Romans:] President Trump celebrating on Twitter moments after the vote. "The United States Senate just passed the biggest in history tax cut and reform bill. Terrible Individual mandate [Obamacare] repealed."
[Briggs:] Now you see the president inviting Republicans to join him at the White House this afternoon to tout passage of this major legislation. The only hitch, the House will have to vote to pass the bill again. CNN's Phil Mattingly up all night on Capitol Hill. He has the details.
[Phil Mattingly, Cnn Congressional Correspondent:] Well, Christine, and Dave, without any question at all, the biggest hurdle Republicans face as they tried to pass their tax overhaul something that hasn't been done in 31 years and getting it through the U.S. Senate. And early on Wednesday morning, that's exactly what they did by a vote of 51-48 along partisan lines. Every Republican that was in attendance voted for their $1.5 trillion tax plan. Now, Republicans say this is something that will benefit the middle- class. That on the corporate side will completely overhaul how the code currently stands. It's something Democrats have attacked, saying that the corporate cuts are skewed heavily in the favor of business. The individual cuts, they expire at a certain point and aren't nearly robust enough. Republicans say even though current polling shows that Americans don't trust this bill and aren't sure what it will actually do, they're willing to sell it. Take a listen to how Senate Majority Leader Mitch McConnell responded to my question after the vote. Do you believe there's a need for Republicans to go out and sell this bill given how Americans are currently viewing it?
[Sen. Mitch Mcconnell , Senate Majority Leader:] Absolutely. I mean, we're looking forward to it. My view of this, if we can't sell this to the American people we ought to go into another line of work.
[Mattingly:] Now guys, in an interesting wrinkle this vote wasn't the final vote. The House still has to vote again. That's right. The House voted on Tuesday to pass the bill 227 to 203 another big vote. The expectation was the Senate vote would be it. It would be headed to President Trump's desk. Well, not anymore. Because of the Senate budget rules, three small provisions technical corrections, mainly were pulled out of the Senate bill. That means it has to go back to the House. Now, this isn't any type of big problem. The bill is no danger at all. House Republicans will pass it Wednesday, probably shortly after noon Christine and Dave.
[Romans:] All right, Phil Mattingly. Another long day for him today. Democratic frustration boiling over leading up to that vote. Minority Leader Chuck Schumer pausing his closing arguments to scold Republicans who were talking during his remarks.
[Sen. Chuck Schumer , Senate Minority Leader:] Nearly 145 million middle-class families under $200,000 will either get tax hikes can we have order, Mr. President?
[Sen. Jeff Flake , Arizona:] The Senate will be in order.
[Schumer:] This is serious stuff. We believe you're messing up America. You could pay attention for a couple of minutes.
[Briggs:] No shortage of reaction after the vote, including this tweet from Virginia Sen. Tim Kaine, former vice presidential candidate. "This secret, rushed, partisan tax bill in no way truly reforms the system. What we need to reform is Congress, and that's what we'll do in the midterms."
[Romans:] The White House standing by claims that the tax bill will cost the president a fortune. Here's CNN's Jim Acosta yesterday.
[Jim Acosta, Cnn Senior White House Correspondent:] The president did say that this tax cut bill would cost him a fortune. That was false, right?
[Sarah Sanders, White House Press Secretary:] No, because on the personal side this actually could impact the president in a large way.
[Acosta:] As you look at this now would it balance out corporate versus personal if he's going to come out ahead.
[Sanders:] I'm not sure if he's done a side-by-side but I know that there are a number of provisions that would negatively impact the president personally.
[Romans:] We don't know what they are for sure. It's impossible to know for sure because the president keeps his tax returns secret. Key measures, though, will help the president, his family, and his businesses, like doubling the estate tax exemption or lowering the tax burden on pass-throughs. Pass-throughs pay taxes through an owner's tax return, not at the corporate rate, and make up the majority of the Trump business empire. In fact, there are many tax goodies for the family business commercial real estate, like reducing the tax on income from real estate investments and larger deductions on commercial property.
[Briggs:] All right. Let's bring in CNN political analyst David Drucker, senior congressional correspondent for the "Washington Examiner." He joins us
[Romans:] Welcome back.
[Briggs:] from D.C. Good to see you, sir. Look, we'll never know because we will never see the president's taxes, but the bottom line is this is a major win for President Trump at the time he desperately needed just that.
[David Drucker, Cnn Political Analyst, Senior Congressional Correspondent, Washington Examiner:] Yes, it is a big win for him politically in that it's his first big legislative victory. Everything that he's done up until now that's been an achievement has been executive action. He has not been able to work with Republicans in Congress where they hold majorities to get something major done. Now that is no longer the case and I think that that has shown at least Republican voters concerned about whether or not it was worth giving their own party full control of government, that they can actually get something done. He could build momentum off of this. Republicans could see, at least short-term, a political benefit to being able to work with the president. And I think one of the things the president did differently with tax reform versus health care is he didn't spend months beating up his own party and his own party's bill on Twitter and through other avenues while the negotiations were happening. He didn't antagonize members of his own party and he seized the results of what happens when you act in a more conventional, if you will, presidential way.
[Romans:] And now excuse me and now he has the repeal of the individual mandate which is, some would say, a death now to Obamacare right here inside of this tax reform. So he did get that Obama that repeal of Obamacare individual mandate through there. You know, the approval is not very high and we heard from Paul Ryan and others yesterday who sort of blamed the media for that. They were focusing on the negative, or we keep talking about how it's a corporate-tilted tax plan, which it is. But you look at this CNN poll here. Today, 55 percent oppose a tax plan. Compare that with last month when 45 percent did. Here's what the "Journal" says. "The Wall Street Journal" editorial board says this. "We'd dislike this bill, too, if all we knew what was the media reported. The polls show that most Americans don't even think they'll get a tax cut when nearly all taxpayers will. Perhaps voters will find that irrelevant in 2018, but the result is certainly better for Republicans than explaining another legislative failure." All along, you heard from Republicans who said failure is not an option here on taxes.
[Drucker:] Yes, and ironically, the failure of health care probably helped facilitate this win on this accomplishment in terms of tax reform because coming out of that, Republicans from all factions of the party even the reddest of districts and the reddest of states were concerned that if they couldn't get anything done, their own voters next year would sit on their hands, not show up, and that was a guaranteed loss. And so they looked at an imperfect tax bill something that voters don't yet appreciate and thought to themselves it's a better position to be in than another failure. And I think that's true. If you look at where the Republican base was they weren't going to blame President Trump but they were going to blame Republicans in Congress, and they're the ones on the ballot. Now, the challenge for Republicans, obviously, is to get voters to like this thing and there's a lot you can say about the bill. I think the danger for Republicans even for Democrats who keep focusing on in their view this being tilted toward the wealthy is actually the more well-to-do, upscale, suburban voters. They're not independently rich but they are
[Romans:] Right.
[Drucker:] doing pretty well. They think this thing is going to hurt them. They tend to vote Republican and they tend to vote Republican because they want tax cuts. And if they don't think this bill helps them if they think it actually penalizes them it's going to be very it's going to be more difficult for Republicans to hold the House majority next year.
[Briggs:] You have two different narratives on this bill. The New York tabloids summing them up. "It's A Wrap," "Positive or Art of the Steal." So we will see which really takes shape over the next year or so. Friday, government funding runs out. Are we headed for a shutdown?
[Drucker:] I think they're going to avoid it. I don't think they're going to want to step on their own message, the Republicans, in terms of the tax reform victory and trying to sell that. If the government were to shut down it would be on them, most likely. They would look like they are incompetent and can't govern. After what is happening this week I don't think that's where we're headed.
[Romans:] All right. We saw this tweet from Jeff Flake shortly after the passage of this thing last night. This is what he said. "Bipartisan DACA bill will be on the Senate floor in January." Do you think the deals that were made with some of the holdout Republicans will be those promises will be kept?
[Drucker:] Well, we're going to have to see. I mean, I think that if Mitch McConnell, the Senate majority leader, made a deal with his Republican colleagues to do certain things, he's going to do his part to honor the deal. But they have to get legislation through the House. They have to keep a president, who can often change his mind, on board with something, so we're going to have to see. But I think the intent is there, at least, from Mitch McConnell and that we'll have to see how far they can push this. Obviously, the president's base is going to be resistant to a DACA fix but the broader Republican universe of voters, I think, will be OK with it, especially if it's paired with border security.
[Romans:] You know, something that doesn't get a lot of attention but, you know, the Federal Reserve is starting to raise interest rates again. The economy is doing very, very well. Ironically, you could see the Fed have to be raising interest rates to sort of counteract the stimulus that comes from tax cuts, you know. It's really kind of an interesting juxtaposition there.
[Drucker:] You know, well look, it's a good problem to have. I mean, look
[Romans:] Sure.
[Drucker:] the country, coming out of the recession, has the economy has grown and job and unemployment is obviously down. But there are a lot of people that have felt that the growth could have been more robust. That Americans could have experienced more wage growth and therefore been more mobile and had more choices. And so, I think the test for this tax plan is whether or not it creates the kind of economic environment that Republicans have said for the last eight to 10 years that was missing. And now, the onus is on them. If the economy does now grow in the manner in which President Trump and the Republicans are promising it's going to give Democrats something to crow about, especially the next time they control government, and that will happen eventually. They're going to want to make changes to the tax code and that would give them more political ammunition to do so.
[Briggs:] If it does grow, though, you've got 10 Senate Democrats up for reelection in Trump states so that could be a huge risk for them. David Drucker from the "Washington Examiner," thank you, sir. Appreciate you being up early.
[Romans:] Nice to see you.
[Drucker:] Thanks a lot.
[Briggs:] All right. President Trump's eldest son suggesting a high-level conspiracy is at work trying to block his father's agenda. Speaking at a Conservative Student Conference in Florida, Don Jr. lashed out at Special Counsel Robert Mueller's probe and the media's coverage of the Russia investigation. He said government higher-ups were backing a scheme to undermine the Trump agenda.
[Donald Trump, Jr., President's Son:] My father talked about a rigged system throughout the campaign and people were oh, what are you talking about. But it is, and you're seeing it. There is, and there are people at the highest levels of government that don't want to let America be America. They don't want to let the little guy have a voice.
[Romans:] Don, Jr.'s comments drew serious concern from former CIA and NSA director Gen. Michael Hayden on CNN last night.
[Gen. Michael Hayden, Former Director, Central Intelligence Agency And National Security Agency:] When I first heard that earlier this evening, that was a little scary. I mean, that is that is an appeal to the heart of autocracy and challenging the patriotism of those folks who work in the United States government.
[Romans:] Don, Jr.'s remarks come as some on the right, including him, are ramping up attacks on the special counsel's probe, claiming it is politically compromised. Earlier this month, the special counsel removed FBI official Peter Strzok from his team after an investigation turned up anti-Trump texts he sent during the campaign.
[Briggs:] A single vote shifting the balance of power in the bellwether state of Virginia. A recount flipping a seat from Republican to Democrat in the state's House of Delegates, leaving the lower chamber evenly split. Democrat Shelly Simonds emerging from the recount as the apparent winner in the 94th district and one single vote taking the seat from Republican David Yancey. The outcome ending 17 years of Republican control of the House, forcing the GOP into a rare power-sharing scenario with Democrats. A three-judge panel still must certify the election results later today. Don't let anyone tell you your vote doesn't count.
[Romans:] It sure does.
[Briggs:] Virginia proved it does.
[Romans:] It sure does. All right. A Florida police officer is lucky to be alive this morning after this. The suspect takes off with the officer hanging onto his car. We'll show you how it ends.