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Associated Press

Saturday, July 22, 2017 | 1 a.m.

WASHINGTON Republicans aren't usually big on raising taxes, but they're really eager to eliminate the federal deduction for state and local taxes.

Why? A look at the states that benefit the most from the tax break helps explain it they are all Democratic strongholds. New York, Connecticut, New Jersey and California top the list of states where taxpayers get the biggest deductions. Not a single Republican-leaning state ranks in the top 10.

"Although Republicans usually recoil at any type of tax increase, cutting this tax break would almost be fun for them," said Martin Sullivan, chief economist for Tax Analysts. "It provides massively disproportionate deductions to high-tax states controlled by Democrats."

Proposals by House Republican leaders and President Donald Trump would repeal the tax break as part of their packages to overhaul the American tax code. But they are getting a lot of pushback from Republican lawmakers in Democratic-controlled states.

The standoff illustrates how hard it is for Congress to eliminate any popular tax break, even one that primarily benefits the ruling party's political opponents.

Almost 44 million claimed the deduction in 2014, according to IRS statistics. That's nearly every taxpayer who itemizes deductions, a little less than 30 percent of all taxpayers. Sullivan analyzed which states would be hit hardest by repealing the tax deduction. The Associated Press did a similar analysis and came to the same conclusion.

Nationally, the average deduction is about $11,800, but it is much bigger in many blue states. New York is tops with an average deduction of more than $21,000. Connecticut is next at $18,900, followed by New Jersey at $17,200 and California at $17,100.

These are states with high property values, high costs of living, high incomes and relatively high state and local taxes compared to other states. They are also states President Donald Trump lost in last year's election. Though the president is from New York, he lost the state to Democrat Hillary Clinton by 22 percentage points.

The highest-ranked state won by Trump is Wisconsin, which came in at No. 13, with an average deduction of $11,300.

At the bottom is Alaska, with an average deduction of $4,800. It is followed by Tennessee and Alabama. Among the bottom 10 states, Nevada and New Mexico are the only ones won by Clinton.

The deduction allows taxpayers to write off real estate taxes, and state and local income taxes. If your state doesn't have an income tax, you can deduct sales taxes. The deduction is heavily weighted to families with high incomes. Seventy-five percent of the benefits went to families making more than $100,000.

Rep. Kevin Brady, R-Texas, says eliminating a tax break that helps some people will help lawmakers lower tax rates for everyone.

"We're proposing a much simpler code with lower rates where everyone gets help whether they are paying their state and local taxes or they are putting their kids in college," said Brady, who chairs the tax-writing House Ways and Means Committee.

Eliminating the tax break would raise $1.3 trillion over the next decade, according to the nonpartisan Tax Policy Center, money that could be used to help pay for lower income tax rates.

The House Republican plan would eliminate most itemized deductions while nearly doubling the standard deduction, to $24,000 for married couples. Notably, the plan would keep the deductions for mortgage interest and charitable contributions.

The White House and congressional Republicans have been privately negotiating their tax package for weeks, with no public sign that they're near a consensus. Democrats have been excluded from the talks.

Some Republicans claim the deduction for state and local taxes encourages states to spend and tax more because the taxes can be deducted at the federal level. Some also complain that the deduction forces low-tax Republican states to subsidize high taxes in Democratic states.

However, many blue-state Republicans don't buy those arguments. They note that most high-cost blue states send more tax dollars to Washington than they receive in federal benefits. And who benefits from those tax dollars? Low-cost red states where incomes are generally lower.

"If we're going to have a discussion about who is subsidizing whom, it must be across the board. It can't be just one provision," said Rep. Leonard Lance, R-N.J.

Lance is teaming up with Rep. Bill Pascrell, Jr., D-N.J., in an effort to maintain the tax break.

"In New Jersey, (the deduction) encourages very strong public schools," Lance said. "I want to maintain strong public schools. For there to be strong public schools, there has to be adequate spending."

Rep. Tom MacArthur, R-N.J., said he brings up the deduction every time he sees Treasury Secretary Steven Mnuchin, one of Trump's top advisers on taxes.

"The minute he walked into the room and saw me he pointed and said, 'I know, state and local tax deduction,'" MacArthur said.

"I know the White House is committed to bringing taxes down for everybody," MacArthur said. "But people in high-tax states under the plan they're proposing would basically be at a break-even while everyone else in the county enjoys tax relief. That's not fair."

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Republicans embrace tax hike targeting Democratic states - Las Vegas Sun

Republican lawmakers on Thursday were unsure of whether they would be able to find the votes to pass their 2018 budget plan anytime soon, even though the plan was easily approved in the House Budget Committee a day earlier.

The GOP needs a budget to pass tax reform this year, since the budget will set up privileged legislation on tax reform that couldn't be filibustered by Democrats in the Senate.

Majority Leader Kevin McCarthy did not schedule the fiscal year 2018 budget resolution "Building a Better America, for a vote next week, which is the final legislative session before a scheduled five-week recess.

McCarthy told the Washington Examiner GOP leaders are going to determine the level of Republican support for the measure, which is to serve as the legislative vehicle for tax reform, a top Republican agenda goal. Conservatives and moderates are at loggerheads over the size of domestic spending cuts, and lawmakers are also clamoring for information about the undisclosed tax plan that is to serve as the centerpiece of the legislation.

"We are working through it," McCarthy told the Washington Examiner.

Prospects for the measure were bolstered Wednesday night when the House Budget Committee passed it along party lines without any Republican defectors, even though some conservative critics sit on the panel.

Conservative Dave Brat, R-Va., was among the lawmakers who voted for the bill after criticizing it. Brat was seeking to double the $203 billion in domestic spending cuts called for in the $4 trillion plan and said he has not decided whether he will back the bill on the House floor.

"We should have done more to tackle mandatory spending levels in this budget," Brat said in a statement. "While I am not happy with some of this budget product and am not yet prepared to vote for it on the House floor, passing it out of committee is an important step in keeping our promise to keep tax reform momentum and get it on President Trump's desk. I hope conservative concerns can be adequately addressed through an amendment process on the House floor."

Another Budget Committee Republican who voted for the plan, Rep. Mark Sanford, R-S.C., may not vote for final passage, a GOP aide said.

Rep. Mark Meadows, R-N.C., who is chairman of the conservative House Freedom Caucus, told the Washington Examiner that more than three dozen lawmakers do not support the budget plan, which is enough to sink the legislation since it must pass entirely with GOP votes.

Moderate Republicans, meanwhile, say the spending cuts in the budget are too steep.

"I've got concerns," Rep. Charlie Dent, R-Pa., told the Washington Examiner.

No Democrats back the plan, in part because it cuts domestic spending and spends more on defense. The GOP plan would fund the domestic discretionary budget at $511 billion and the defense budget at $621.5 billion.

Meadows noted that the House has begun the process of passing 2018 spending bills, moving forward without waiting for a budget resolution to pass. In that way, the budget plan doesn't matter much to Republicans as a guide for upcoming spending bills.

"We are already appropriating, so it doesn't matter," Meadows said.

But the budget does matter to Republicans because it will set up a path for tax reform legislation that can be more easily passed in the Senate under the so-called reconciliation process. For that reason, Meadows believes Republicans should drop plans for a budget until they develop a tax reform plan and then try to pass the budget.

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Republican budget at risk in the House - Washington Examiner

Kansas City Star

Republican rift over Medicaid, familiar to Kansans, now stymies Obamacare repeal Kansas City Star When Vice President Mike Pence complained recently that the Affordable Care Act's Medicaid expansion had put able-bodied adults ahead of people with disabilities, Ohio Gov. John Kasich, a fellow Republican, quickly jumped in to dispute that and ... and more »

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Republican rift over Medicaid, familiar to Kansans, now stymies Obamacare repeal - Kansas City Star

Has there ever been a time when the Congressional Budget Office played a more consequential role than it is playing right now? Somewhat surprisingly for an office full of eggheads and number crunchers, it has become a nexus of controversy and contention, itslatest assessments eagerly awaited and assumed to have a dramatic impact on every debate it touches.

Today, the CBO released its latest score of the most recent version of the Republican effort to repeal and replace the Affordable Care Act, and once again, it shows the effects of the bill to be horrific.The bill would cut Medicaid by $756 billion and result in 22 million fewer Americans with health coverage by 2026, with 15 million of those coverage losses happening in the first year. In other words, its another score that offers a vivid picture of the damage that Republican plans would do.

Which is why Republicans have launched a full-scale assault on the CBO, trying to discredit it so that no one will listen when the CBO explains what consequences Republican plans would actually have.

It isnt all that surprising that Republicans would try to do that the creation of alternate realities they can shape has often been a core part of their political project. What matters is that it has failed. The reasons why can actually give us some hope that our politics retains some tether connecting it to reality.

But first, thats not the only CBO-related news. A group called the Protect Democracy Project filed a lawsuit today against the Office of Management and Budget, seeking a court order requiring OMB to immediately turn over any communications regarding plans it might have to attack and discredit the CBO, including emails coming from Newt Gingrich, who has been publicly advocating that the CBO be abolished. The basic idea of the lawsuit seems to be that the administration is planning to destroy the CBO, and the public deserves to know what theyre up to.

But this isnt just about health care theres a longer game being played. Yes, the administration is stricken by what the CBO has said about the various iterations of Republicans health-care plan. But it isalso almost certainly worried about whats to come on issues such as infrastructure and especially tax reform. Cutting taxes is the goal nearest and dearest to Republican hearts, and theres a good chance that when Republicans come up with a bill, the CBO will say that its going to explode the deficit. Under current rules, that will restrict what Republicans can do if they want to pass it through reconciliation with only 50 votes in the Senate.

The only way to get around that would be to change Senate rules so the CBO was no longer the arbiter of whether a bill does or doesnt increase the deficit. That would be a radical step, and I dont know if Senate Republicans are even contemplating it. But if they were, a campaign to discredit the CBO would have to be the first part of the plan.

So the stakes are high. And in the health-care debate, the CBOs judgments have been absolutely crushing for Republicans. Its score of the first House bill showed that it would lead to 24 million Americans without health coverage, an assessment that was widely reported on the news. Democrats repeated the 24 million number a zillion times, and polls showed the bills popularity somewhere between that of Martin Shkreli and canker sores. When Paul Ryan revised the bill, he pushed it through to a vote before CBO could get a chance to score it, obviously fearing what the score would reveal (the eventual score of that version showed 23 million losing coverage). The scores of Senate versions have not been much better, and as a result any Republican who tries to defend the effort inevitably gets the CBO figures thrown at them.

All of which is why Republicans are trying so hard to discredit the CBO. Its almost like its not a fair analysis, saidWhite House budget director Mick Mulvaney, complaining that the office is using methodologies designed by Democrats. Never mind that the current director of the CBO, Keith Hall, is a Republican economist and veteran of the George W. Bush administration who was picked for the job in 2015 by the Republican leadership in Congress. At some point, youve got to ask yourself, has the day of the CBO come and gone? Mulvaney said in May. The White House even made a video attacking the CBO (the video misspelled inaccurately not once but twice).

Both parties have at times complained about one CBO score or another when those scores didnt turn out the way they would have liked. But the critical point about this Republican effort is that it isnt succeeding. The news media continue to accept the CBOs judgments for what they are: not perfect by any means, but the best nonpartisan, objective measure we have to assess what important bills will do.

When Republicans go around bad-mouthing the CBO and accusing its workers of being nothing but liberal shills, they might be able to convince their own supporters that its true. But the more ambitious your goals, the more youll need to expand beyond your own base to gather support. So while Republicans might be able to get the Fox & Friends audience on board with their campaign to discredit the CBO, if theyre trying to remake the American health-care system or enact an enormous tax cut for the wealthy, that wont be enough. The attack on the CBO is so nakedly cynical and partisan that it just isnt going to have broad persuasive power. That means that those brutal numbers, whether its 24 million losing coverage or 32 million losing coverage or whatever the latest score reveals, will continue to be disseminated. Reality actually stands a chance.

Maybe the better answer for Republicans would be to write bills that wont have such a devastating effect on Americans, which would get them better CBO scores. Just an idea.

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The Republican attack on the CBO is failing. That should give us hope. - Washington Post

(Victoria Walker/The Washington Post)

Sen. John McCain (R-Ariz.) has been diagnosed with a brain tumor, his office said Wednesday, throwing into doubt when and if he will return to Washington to resume his duties in the Senate.

The Mayo Clinic said doctors diagnosed a tumor called a glioblastoma after surgery to remove a blood clot above McCains left eye last week. The senator and his family are considering treatment options, including a combination of chemotherapy and radiation, according to the hospital.

McCain, 80, has been away from the Senate this week, recovering from the surgery and undergoing tests. His office issued a statement describing him in good spirits and noting that his doctors say his underlying health is excellent but not indicating when he will return to the Senate.

Glioblastoma is an aggressive type of brain cancer, and the prognosis for this kind of cancer is generally poor. Sen. Edward M. Kennedy (D-Mass.) survived less than 15 months after his was found in 2008. McCains doctors said the tissue of concern was removed during the blood-clot procedure.

[5 questions about the brain cancer diagnosed in Sen. John McCain]

(Ashleigh Joplin/The Washington Post)

McCains significance inside Congress is hard to overstate and his absence, however long, will reverberate across the Capitol.

The Arizonans illness leaves Senate Majority Leader Mitch McConnell (R-Ky.) and by proxy President Trump, who has openly mocked the Arizona senator with 51 votes, the barest of majorities at a time when Republicans are divided on such issues as health care, taxes and defense spending.

McCains absence would also deprive the Senate of its moral conscience on many key issues, particularly in the ongoing investigation of the Trump campaigns potential involvement in Russian meddling in the 2016 campaign.

Colleagues from both parties reacted swiftly to McCains announcement with sadness and encouragement. Trump exhorted McCain to get well soon and declared the senator a fighter. Former presidents Barack Obama and Bill Clinton both tweeted their good wishes.

McConnell said: I know that he will face this challenge with the same extraordinary courage that has characterized his life. The entire Senate familys prayers are with John, Cindy and his family, his staff, and the people of Arizona he represents so well.

We all look forward to seeing this American hero again soon.

[Give it hell: Obama, lawmakers react to John McCains cancer diagnosis]

McCain, a prisoner of war in Vietnam and a two-time presidential candidate, is known for his unfiltered opinions and willingness to buck Republican Party orthodoxy. Along with Sen. Lindsey O. Graham (R-S.C.), perhaps his closest friend in the Senate, McCain has become one of Trumps leading Republican critics, particularly on issues of foreign policy and national security.

Sen. John Hoeven (R-N.D.) said the news of McCains diagnosis was announced during a meeting between GOP senators and White House staff on health care. Hoeven said the news left the group in stunned disbelief.

It was very emotional, Hoeven said. I think for all of us hes a special person.

Graham also attended the meeting and told others there that he had spoken with McCain and described him as resolved and determined.

He said, Im going to have to stay here a little bit longer and take some treatments, but Ill be back, Graham said of McCain. He said, Ive been through worse, and basically then we started talking about health care and the NDDA a reference to the National Defense Authorization Act.

McCain has staunchly defended Trumps national security team he has particular respect for Defense Secretary Jim Mattis and national security adviser H.R. McMaster. But McCain has criticized the president for campaigning on a promise to fortify the countrys defenses without, in his view, devoting enough money to the task.

McCain has also criticized Trumps apparent affinity for Russia and its president, Vladimir Putin, warning that Russia is an enemy that should not be trusted and becoming one of the earliest Republicans to lend his support to a congressional investigation of Russias ties to the election.

John McCain has always been a warrior. Its who he is, said House Speaker Paul D. Ryan (R-Wis.). I know John is going to fight this with the same sheer force of will that has earned him the admiration of the nation. And all of us, not as Republicans or Democrats, but as Americans, are behind him. The prayers of the whole House are with Senator McCain and his family.

McCains formal title is chairman of the Senate Armed Services Committee, but McConnell essentially deputized him after his second presidential bid, in 2008, to run all national security issues for Senate Republicans.

But McCains standing from his stature borne of overcoming torture in Vietnam to his denunciations of Trump as a candidate and as president reaches far across the aisle. He is an iconic figure as beloved by Democrats as Republicans.

Almost every major bipartisan deal of the last 15 years has come with McCains backing, on issues including immigration, outlawing torture and the Senates internal rules.

Democrats line up to travel with McCain overseas because foreign leaders treat him as if hes a prime minister, winning audiences that are usually reserved for a secretary of state.

His fights with fellow senators have been legendary, but so have his dealmaking skills.

Heartbreaking news, wrote Sen. Chris Murphy (D-Conn.) on Twitter. He said he traveled the world with McCain and learned a lot from him. Murphy added: there is no one tougher.

In a written statement she posted on Twitter, McCains daughter, Meghan McCain, said the news of her fathers illness has affected every one of us in the McCain family. She said they live with anxiety about what comes next, which they have endured before. McCain has a history of melanoma, a dangerous form of skin cancer.

She added, it wont surprise you to learn that in all this, the one of us who is most confident and calm is my father. He is the toughest person I know. The cruelest enemy could not break him.

McCains absence could complicate the fate of the annual National Defense Authorization Act, massive legislation that McCain has played an outsized role in shepherding through Congress since he took over as chairman of the Senates Armed Services Committee in 2015.

From that perch, McCain has made a name for himself attempting to hold contractors to account over stalled projects while driving an overhaul of the acquisition process. He has pushed for greater investments to improve the quality and availability of materiel and training, an expansion of the U.S. military footprint abroad, particularly in hotspots like Afghanistan and Iraq, and an unprecedented focus on improving the countrys ability to safeguard against cyberthreats and hacking.

McCain was relentless in his criticism of Obamas understanding of national security, accusing him of compromising the nations security by making nuclear deals with Iran and pulling troops out of Afghanistan and Iraq. But McCain was also open to working with the president to explore closing the detention facility at Guantanamo Bay. That effort ultimately failed.

McCains absence from the Senate this week came as GOP leaders struggled to bring their failing push to rewrite the 2010 Affordable Care Act to a conclusion. Leaders had intended to vote on a bill this week but postponed their plans late Saturday after McCain said he would be out recovering from the surgery to remove the blood clot.

On Monday, McConnell scrapped plans to vote on the bill altogether once it became clear it would not have the support to pass even with McCain in town to vote. McCain had voiced skepticism about the GOP repeal and replace plan. It was unclear that he would ever get to yes on it.

About 12,400 new cases of glioblastoma are expected in 2017, according to the American Brain Tumor Association. It is the most common of all malignant brain tumors, and a tumor that more commonly occurs in older adults than younger people.

Matthias Holdhoff, an associate professor at the Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins, said the first step after a diagnosis is to surgically remove as much of the glioblastoma as possible. But that can be difficult; it is a tumor that spreads through extensions into the tissue, more like a mesh work than a lump.

Its not just a matter of the cancer, but where it is and what its doing to the patient, said Chevy Chase, Md., oncologist Frederick Smith, speaking generally about glioblastomas and not specifically about McCains case. A blood clot over the eye tends to indicate the tumor was in the brains frontal lobe, which controls cognition among other things, he said.

Again speaking generally of patients with this diagnosis, they might be fine for a number of months or even years. But they are never cured.

Lenny Bernstein, Laurie McGinley, Kelsey Snell, Lena H. Sun and Ed OKeefe contributed to this report.

Read more at PowerPost

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John McCain, Republican senator from Arizona, diagnosed with brain tumor - Washington Post