RUSH: We have a deal. It looks like we have a compromise here between the… (sigh) I’m not sure what I’ve been told is the right thing. The House and Senate are meeting on the tax bill, and if this is the conference committee…? Is that what’s been going…? (interruption) Okay, we have a deal in the conference committee. That’s a big deal. That means the House and Senate have agreed on one form of the bill. You know, the House passed their bill and the Senate passed theirs.
And after that you have to go to conference between the House and the Senate to compromise between the two bills because they’re different. That supposedly has happened. What has to happen now is that the compromise bill now has to pass both the House and Senate again. Now there’s one bill. Now, I don’t… I just got a news flash on this. I don’t know any of the details. The last I heard, one of the things that I think the Senate put in or wanted in was a reduction in the top marginal rate from 39.6% down to 37%.
Remember when this all started, I had Paul Ryan on the program. I said, “Why are you not touching the top rate? I mean, this is being done, we were told, to spur economic growth, that it would ‘pay for itself’ by way of creating new taxpayers.” All of this, it still frustrates me like I can’t explain. Whenever there’s a tax cut proposed, the first thing anybody in the swamp says, Republican or Democrat, is, “How are we gonna pay for it?” I cannot tell you how offensive that is to me.
What they really mean is, “Okay, we in Washington are going to take less money from the people. Well, how do we make it up?” “How do we pay for it?” becomes “How do we get the money back that we are letting them keep?” In other words, “How do we not lose on this deal?” That kind of thinking infuriates me, that government has primacy, that the government cannot do with a dime less this month than last, or this year than last. The whole idea here is to shrink government.
The whole idea — at least in the conservative ideological take on this — is to empower individuals and disempower the federal government. And you do that by making it smaller? So who cares if the government has to do with less money? Everybody else has to do that! Where’s it written that Washington never, ever has to do with less? But that’s what they all mean when they say, “We have to find a way to pay for it.” And so all…
So the state and local tax deduction, the elimination of state and local taxes was to pay for it! If we’re gonna cut rates all across the board and if we’re gonna cut the corporate rate, then, these tax writers said, “Well, that means we’re gonna get less money. We have to find a way to pay for this.” So they raise taxes on somebody else. They raise taxes on people by denying them the deductions of state and local income taxes and in some states property taxes, and this was gonna have a very broad impact on high-tax blue states.
New York, California, Illinois, Connecticut.
I mean, they were squealing like crazy over this in those states, and so the call went out: “Well, we’ve gotta do something to soften the blow.” So they said, “We will allow the people to deduct their property taxes but not state and local income taxes.” Well, that was their compromise, because Washington still had to “pay for this.” I maintain that if Washington has to “pay for it” — meaning when it’s over, Washington doesn’t lose any money — then there really hasn’t been a tax cut that means economic growth.
How can there be? If you cut tax rates and people pay less in taxes but Washington doesn’t lose any money — and I’m speaking in their lingo. I hate that lingo, but that’s in order to be communicative here. If Washington doesn’t lose any money in the deal, how in the world has there ever been a tax cut? “So we had to find ways to ‘pay for’ these tax cuts for the middle class who we are desperately trying to relate to. We know life is tough. We know life is hard. We know the tax code’s complicated.
“We in Washington are gonna cut your taxes, and we’re gonna make it very simple for you to fill out your tax form only a postcard from now on out! But that means we’re gonna have less money here. So as we cater to you, we’re gonna find our people to make up the difference.” One of the other ways they did it was to not cut the top marginal rate for the top 1% or 5%, which is 39.6%, and when I had Ryan on here, Ryan said, “Well, you gotta talk to the president about that. That’s his idea.
“The president is immovable on this. The president maintains that people like him don’t need a tax cut and don’t want a tax cut, and so they’re not gonna get a tax cut.” To which I said to Speaker Ryan, “Well, how in the world then is this gonna be an economic growth thing? How are you gonna grow the economy so that this tax cut, quote-unquote, ‘pays for itself’ by creating economic growth that results in new people being hired, which creates new taxpayers?”
See, that’s the way you generate new revenue and make up whatever Washington is going to sadly lose. But in that case, it’s a good deal. It’s a win-win because Washington’s revenue is coming from more economic activity, not higher taxes. It’s coming from lower taxes promoting higher activity, creating more taxpayers — i.e., employees — paying taxes, and so the revenue grows. And the Democrats say throughout this, “Well, we’ve run the numbers. We’ve scored this. The CBO has scored it.
“The Joint Committee on Taxation has scored it. Your tax cut does not promote growth.” They say that whether it does or not. The fact of the matter is a tax cut promotes growth, if it’s really a tax cut. If it’s really a tax rate cut, it promotes growth. Now, if they have to pay for it by raising taxes somewhere else that you don’t see, if Washington doesn’t lose any money in this, there can’t be economic growth, folks. Not the way this… The only way Washington gains money and economic growth happens is if the economy grows and creates more taxpayers.
So throughout the life of this bill we have been living under the premise that there’s no way that 39.6% rate’s gonna be cut. “The president doesn’t want it.” Now, the fact is neither did anybody in the House or Senate. They relied on the president saying he didn’t want it to make sure they didn’t fight for it. You can tell they didn’t want it. If they’d really wanted it, they would have fought for it. But in this case, “Oh, it’s the president. You gotta talk to the president, Rush.
“The president’s adamant about this.” “Okay, so, you don’t really believe in any of it then either, do you, because you don’t want to try to talk him about it?” “Well, you can have your turn at it. You can try to talk him out of it if you want, but he’s adamant about this,” they said. And then two nights ago I get a flash iMessage that says, “They’re talking about — in the conference committee — reducing the top marginal rate to 37% down 39 points or so.” “What? Where did this start?”
He said, “The Senate.” So I had to put my thinking cap on. “Now, what caused this?” Out of nowhere, the top 1% or 5%, whatever it is… It’s not very many people, but they’re gonna get their rate cut from 39.6% to 37%. Again, I don’t know if that’s survived the conference. I have yet to get any details here. So I’m kind of… I’m doing this on the fly, a wing and a prayer. But if it holds up, if it’s in there and the top marginal rate…
It’s just a few shekels, but if it’s cut from 39.6% to 37%, I’m gonna tell you why, and they won’t. It’s because they’ve got to find a way to spur economic growth. Because the word is out from all these so-called analysts — the CBO, the Joint Committee on Taxation — that the tax cut doesn’t promote growth. There’s a big story in Reason, the magazine/website today. The guy who wrote this is angry as he can be.
The Republicans are a bunch of frauds. We now know looking at their tax cut that they don’t care about promoting growth. This is not a tax cut that reduces the size of government. They’re just cutting taxes here for the sake of it for politics.
This guy at Reason, I don’t have his name in front of me, is livid about it. He wants purity. He wants a tax cut that’s right out of Reagan, that cuts the marginal rates and promotes economic growth because it is supposed to rein in and shrink the size of government. And his claim is the Republicans don’t care about any of that. They’re just doing the political expedient thing here by cutting taxes and beating their hands on their chest like Tarzan and saying, “Look at us, we just cut your taxes.”
But when they lower that top marginal rate from 39.6% to 37%, folks, the standard way of talking about this in Washington, “My God, Washington’s gonna lose even more money! How can they do this?” But that’s not why they’re doing it, are they? They need this tax cut to promote economic growth. The first time, when I first heard the details of this thing way back however many months ago it was and I had Paul Ryan on this show, and even when I was interviewed by Hannity, who has a pipeline to Trump, and Hannity’s interviewing me here and he asked me about this, I said, “I don’t know how in the world you can say that this thing has anything to do with economic growth when the people that hire are not getting a tax cut.”
Why is it that the engine of growth, the people that hire, the people that invest in their business, where are they being left out here? If they’re being left out, you can’t tell me this is gonna cause economic growth. The economic growth requires there to be new jobs created, and that doesn’t happen in the ranks of the poor, it doesn’t happen in the middle class. They’re not traditionally the people that hire.
They may have, you know, a housecleaning crew here or there, a lawn mower bunch, but I’m talking about full-fledged jobs with benefits and so forth, that happens at the small business level up to the corporate level, and those are people paying the 39.6% rate. If you’re not cutting them, how in the world are you having growth? Now all of a sudden we hear that they want to propose this cut or rate reduction from 39.6% to 37%, and that has to be because they want to promote growth.
I mean, there hasn’t been any political pressure on them to do it. The rich never complain. I mean, the rich never go on TV and say, “What about us?” It’s unseemly, don’t you know. It’s unseemly for some people to demand fairness. It’s unseemly. It certainly isn’t polite or sophisticated for the well-off to ask for the same fair treatment as everybody else. So there wasn’t a clamor for this.
Snerdley, you follow this. Are you aware of anybody making a move out there demanding the top rate be reduced? Out of the blue it’s reduced. Again, I don’t know if it survived the conference report, but I’ll find out soon enough. But this means they realize they have to do something to cause economic growth. This is the thing the president was steadfastly opposed to. This has nothing to do with the election in Alabama. This happened before that. It has nothing to do with that.
It might have something to do with the Senate. It might be a necessity to get certain votes in the Senate, but who in the Senate do you know that was demanding that the rich get a rate cut? What was going on in the Senate and the House was all this angst over the fact that state and local income taxes were no longer gonna be deductible. And that was really affecting basically Democrats, people that live in blue states who pay exorbitantly high state income taxes. And they’ve been able to get those taxes subsidized by you and me.
So there has been something taking place going on here. So we’ll run that down. But the bottom line is the conference committee has a deal, so now whatever that final bill is has to go back to both the House and Senate, where it has to pass both. And the amendment process here is pretty much done with. No more amendments. This is it.
So whenever they get that vote, and they’re targeting before Christmas, they send it up to the Oval Orifice, where Trump will sit there and sign it. They’ll have a big bash and a big party celebrating his big legislative achievement, while Chuck You Schumer is gonna say, “Wait! You can’t do it now! You’ve gotta wait for our guy to be seated in January! It’s the only fair thing to do!” And there will be some Republicans, “Yeah. You know what? That is the only fair thing to do.” It’s gonna be tight, folks. It’s gonna be tight. It’s gonna be a-cluster-you-know-what waiting for this thing to all happen.
RUSH: The conference committee bill does include the rate reduction from 39.6% to 37%. John Cornyn says the conference committee bill will be presented to the whole Senate this afternoon, where he thinks it’ll race through there and everything’s gonna be fine and then they’ll run in there and they will pass this thing sometime next week.
Now, there are two potential problems that we know by virtue of history and experience. One of them is Susan Collins just because she’s there. And the other one is Senator McCain, and we don’t know a lot there about many things where Senator McCain is concerned.
However, he has in the past expressed his intention to support this, but this was before the conference report. I don’t know if enough has changed in it to cause Senator McCain to change his opinion of it. But there’s still some potential road blocks out there.
But they have a deal, and the New York Times has the story, and the Drive-Bys are not happy. The Republicans are supposed to be committing suicide today. The Republicans are supposed to be depressed and down in the dumps and running around asking for Prozac and Jack Daniel’s and so forth. And instead they got together in their conference report and they came out with a tax cut bill. This is just not supposed to happen. Trump’s not supposed to get something positive today.
This is all supposed to be Democrats own the day, Republicans too ashamed to even appear in public. And the Republicans are screwing around here by actually coming to a conference report agreement on the tax bill. So the Drive-Bys are not happy.
RUSH: Not too long ago, President Trump at the White House talking about tax reform focusing on the agenda, which is a good thing for President Trump to keep doing.
THE PRESIDENT: We’re very, very close to a historic legislative victory the likes of which rarely has this country seen. I think I can say, Kevin and Orrin, that we’re getting very close, and I know a lot of the folks that we’d like to have here, we said if you have your choice, stay back and get it done, right? They’re all working and negotiating some final points, but we’re very, very close. This bill is vital to the American people for many reasons. First of all, it’s going to have a tax cut the likes of which we haven’t seen for not only business, but for the working families of our country.
RUSH: So they’re out there pushing this. This is Trump sticking to the agenda. The corporate rate will go from 35 to 20 or — I’m not sure there was talk about, you know, some people wanting it to not get to 20, say 22, so I’ll have to look that up. But that will be good for economic growth. But so is the rate reduction, 39.6 to 37. Everybody is going to get a tax cut now, if this holds up, everybody, which should have been the case from the get-go. Also, Trump had a lunch meeting today, members of Congress. During the Q&A somebody asked him the Alabama election.
THE PRESIDENT: I think it’s very important for the country to get a vote next week, not because we lost a seat, which we would have gotten a seat. A lot of Republicans feel differently. They’re very happy with the way it turned out, but I would have, as the leader of the party, I would have liked to have had the seat. I want to endorse the people that are running.
But I will tell you that to me it’s very, very, just very important to get this vote. Not because of that, but because of the — and I didn’t know what the vote will be, I don’t know what exactly the final — we have a margin now of two, plus our great vice president. So I really — I think we’re going to get the vote, but I will say, we have to get more senators and more congressmen that are Republicans elected in ’18, and then you’ll see a lot more of what we’re doing right now.
RUSH: There you have it. So he’s feeling pretty good about this, looking good, and he got his dig in at the Republicans we all know who are happy with Roy Moore’s defeat. (interruption) What do you mean? You mean he sounds more savvy to you now than he did six months ago on the politics of things? Maybe. Maybe. But he’s still got the old Trump flair.
You just gotta love this. “We’re very close to historic legislation the likes of which rarely has this country seen.” Now, you have to know that guys like the Reverend Jackson are out there saying, “What? You’re gonna puts this in the category of the Civil Rights Act of ’64 and the Voting Rights Act of ’65 and the We Can Shake ‘Em Down Act of ’67?” But that’s Trump. He’s got a flair. Whatever he does, it’s the biggest, it’s the best that’s ever done, and there isn’t anything close.