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The Illinois House on Sunday approved a major income tax increase as more than a dozen Republicans broke ranks with Gov. Bruce Rauner amid the intense pressure of a budget impasse that's entered its third year.

The Republican governor immediately vowed to veto the measure, saying Democratic House Speaker Michael Madigan was "protecting the special interests and refusing to reform the status quo."

The measure, which needed 71 votes to pass and got 72, is designed to start digging the state out of a morass left by the lengthy stalemate. Madigan, in a statement, praised the action as "a crucial step toward reaching a compromise that ends the budget crisis by passing a fully funded state budget in a bipartisan way."

The tax hike now heads to the Senate, but whether there will be enough votes to send it to Rauner's desk is in question. When the Senate approved its own tax hike in late May, no Republicans voted for it and several Democrats voted against it. Senators return to the Capitol on Monday.

The crucial vote in the House was the big story Sunday, though. Ultimately, pressure that had built up in districts across the state moved enough Republicans to defy the governor.

With state government operating without a budget for two full years, public universities risk losing their accreditation, social service providers are closing their doors and layoffs of road construction workers are imminent. Adding to lawmakers' anxiety was a promised downgrade of the state's credit rating to junk status, which could spike the cost of borrowing at a time when the state has $15 billion in unpaid bills.

Left out of the House budget package was a plan for dealing with the unpaid bills, though both sides generally agree that some amount of borrowing will be needed.

Rauner, a former private equity specialist from Winnetka, had spent tens of millions of dollars on legislative campaigns and TV ads to prop up the Illinois Republican Party as a counterweight to Madigan and his labor union allies. And Republican lawmakers largely had stuck by their governor until Sunday.

A pair of Downstate Republicans summed up the split.

"For me right here today, right here, right now, this is the sword that I'm willing to die on," said Rep. Michael Unes, a Republican from East Peoria. "And if it costs me my seat, so be it."

Rep. Terri Bryant, R-Murphysboro, said while she hated taxes, as a fiscal conservative she could not stand by while the state cannot pay billions of dollars in bills owed to small businesses.

Bryant teared up when explaining that she must do what is best for her district, which includes Southern Illinois University in Carbondale.

"I hope you will help me bring my university back," said Bryant, who added that she expected to face a primary challenge because of her vote.

Fifteen Republicans broke ranks with Rauner to join 57 Democrats in voting for the tax hike. A dozen Republicans were from Downstate, where many of the state's public universities, prisons and other state facilities are located. Another three were from the suburbs.

Getting so many Republican votes allowed 10 Democrats to vote against the tax increase. Six are from the suburbs and four Downstate, and all are potentially targeted for defeat next year by the Rauner-funded Illinois Republican Party.

Democratic leaders portrayed the vote as an attempt to let rank-and-file lawmakers from both sides do something to show their seriousness about putting an end to the budget stalemate in the face of concerns the state's credit rating will hit a first-in-the-nation junk status.

Republican leaders, though, saw it as a politically motivated attempt to force those in their ranks into a corner. Shortly before voting began, Democrats introduced revamped tax and spending plans, prompting House Republican Leader Jim Durkin to say the process had been "hijacked."

Following the vote, Durkin rejected the notion that the outcome amounted to a defeat for Rauner and Durkin's own leadership of House Republicans. The governor had kept out of the public eye during much of recent negotiations, and Durkin assumed the role of Rauner's proxy in the talks with Madigan and Democratic Senate President John Cullerton.

Durkin said House Republicans who voted for the tax increase succumbed to intense pressure made worse by the belief that Democrats would not cave on the changes Rauner wanted.

"There's going to be another vote on this, but the fact is we've done a pretty good job over the last three years hanging together," Durkin said. "I knew this was going to be a tough vote. I'll let my members decide how they characterize me after today. I've done what I could to operate in good faith and keep my caucus together."

Durkin noted that the vote may not mean Illinois is out of the woods when it comes to a potential credit downgrade.

"It is not law yet. It is not law," Durkin said. "I don't know how much value the bond houses put into legislation that is facing a veto from the governor."

Sponsoring Rep. Greg Harris, Madigan's top budget negotiator, said during debate that it was time for lawmakers to "rise above" the partisan gridlock of the past several years that is likely to have repercussions for years to come.

"Today, we can change the awful trajectory of the last several years. We can vote. We can do our jobs. We can get it done," Harris said. "We all love this state, and we know we cannot delay any longer."

Just two days earlier, nearly two dozen Republicans had joined Democrats to tentatively approve a spending plan, with Madigan and Durkin telling lawmakers the vote was an expression of good faith as negotiations continued.

State spending has been on autopilot during the impasse, vastly outpacing revenues after the January 2015 expiration of a temporary income tax increase.

The proposal mirrors a plan the Senate passed earlier this year and calls for raising the personal income tax rate from the current 3.75 percent to 4.95 percent, which would generate roughly $4.3 billion. An increase in the corporate income tax rate from 5.25 percent to 7 percent would bring in another $460 million.

Unlike the Senate measure, the tax hike would not be retroactive to Jan. 1 but instead would begin with the Saturday start of the budget year. That change, sought by Republicans, was designed to avoid having people pay even more in income taxes the rest of the year to catch up for the past six months. Also out is an expansion of sales taxes to some services. The tax hike would be permanent, against Rauner's desire to make it temporary to match a temporary property tax freeze he is seeking.

The legislation would also reinstate the research and development tax credit, which would expire in 2022, and increase the earned income tax credit for low-income families. It also ends several corporate tax breaks, including those for companies that operate on the continental shelves or shift production out of state.

After approving the tax increase, House lawmakers quickly signed off on a reworked spending plan that would funnel funds to local schools, social service programs, higher education and other state operations such as the lottery, prisons and road projects. That measure passed 81-34, receiving nine more votes than the tax plan that was needed to cover the cost of the spending.

Under the revised budget blueprint, the state would spend a little more than $36 billion, a roughly $400 million cut from the plan House Democrats first floated. Universities would see cuts of 10 percent instead of the 5 percent in the earlier proposal.

The budget also contains a provision that would prevent monthly school aid payments from going out unless there's also an "evidence based" funding model, an attempt by Democrats to force Rauner to sign a measure they've already passed to revamp how dollars are doled out to schools. Rauner has said that plan amounts to a bailout for troubled Chicago schools.

The Sunday House tax vote capped a tumultuous three days. By Saturday morning, the tone of optimism that had briefly overtaken the Capitol on Friday had started to shift. Madigan announced that no votes would occur on Sunday, which would have given his members some time to go home for a few nights. Durkin accused Madigan of trying to slow momentum.

That dispute sparked angry outbursts on the floor. Rep. Grant Wehrli of Naperville shouted that Madigan was "Speaker Junk," a reference to the anticipated credit rating downgrade to junk status as the state entered a new fiscal year without a budget in place.

Hours later, Madigan reversed course and announced his plans to put the tax plan up for a vote on Sunday, even though it was clear Durkin would not deliver the 30 GOP votes the speaker has asked of him. Democrats said it was time to see who was ready to vote for a tax hike, saying that some Republicans have expressed a desire to break from Rauner and support the plan.

Indeed, Rep. David Harris, R-Arlington Heights, voted in favor of the tax bill, saying Sunday that he was not elected "to preside over the financial destruction of this state."

"How many of our business people have told us they need stability?" Harris said. "This revenue bill gives them that, and it ends some of the horrible dysfunction that has infected our government."

Rep. Reggie Phillips, R-Charleston, whose district is home to Eastern Illinois University, said he credited the state's college tuition grant program for making it possible for him to attend college. He also noted that he is a business owner in Charleston and the financial troubles caused to universities by the state budget impasse have rippled into university towns.

"I'd like to save my university. I'd like to save my town," Phillips said. "And so although it's against some of the principles that I came here for, I am going to vote for this bill."

While Rauner has said he could support a tax hike, his signature comes with a list of conditions.

Rauner is pushing for a property tax freeze in exchange for his approval of an income tax hike. Democrats are open to a four-year freeze, but the governor argues that if a freeze is temporary, the income tax increase should also be temporary. Democrats have opposed that, saying it will lead to more financial problems down the road.

Another holdup centers on Rauner's push to overhaul the state's workers' compensation system. Rauner wants to cut fees doctors get for treating patients, which advocates say will help businesses control costs. Democrats say the fees were slashed several years ago and want tougher oversight of insurance rates, contending the industry hasn't passed along savings.

The Democratic-controlled legislature has yet to meet Rauner's conditions, and the governor blasted them Sunday.

"Illinois families don't deserve to have more of the hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs," Rauner said in a statement. "Illinois families deserve more jobs, property tax relief and term limits. But tonight they got more of the same."

Rauner and his Republican allies have also pushed in negotiations to keep any eventual tax hike as low as possible. When House Democrats crafted their tax-hike bill, they kept rates at the level that Senate Republicans had insisted upon when negotiations were taking place in the Senate.

That left some Democrats dissatisfied with the amount of money that would be available to fund programs and services that have been starved of cash for the past two years.

Rep. La Shawn Ford, D-Chicago, said the budget plan was "not a compassionate budget," and was instead a "compromise that's brought on by the threat of a junk bond rating, not by the pain of the people."

mcgarcia@chicagotribune.com

kgeiger@chicagotribune.com

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Madigan's House approves major income tax hike as Republicans break with Rauner - Chicago Tribune

Does anyone really know Ronald Reagan?

In his new book The Working Class Republican, a bracingly revisionist account of the 40th president, Henry Olsen answers no. One of the most astute political analysts at work today and a fellow at the Ethics and Public Policy Center, Olsen argues that Reagans politics bear the distinctive stamp of his origins as a New Deal Democrat.

Olsens interpretation of what he calls Reagans New Deal conservatism is open to dispute. But he undoubtedly is correct that contemporary conservative politicians do Reagan and themselves a disservice by remembering him as an unremitting ideologue and tactical maximalist.

As late as 1980, Reagan had still been a Democrat longer than he had been a Republican. As he put it, characteristically, in his 1984 acceptance speech, Did I leave the Democratic Party, or did the leadership of that party leave not just me but millions of patriotic Democrats who believed in the principles and philosophy of that platform?

With an eye to these sorts of voters throughout his career and with a sensibility attuned to their concerns, Reagan didnt simply replicate the let-it-all-hang-out, high-octane conservatism of Barry Goldwater.

He never contested the idea that there should be a safety net. In his famous speech promoting Goldwaters candidacy in 1964, Reagan stipulated, Were for a provision that destitution should not follow unemployment by reason of old age, and to that end we have accepted Social Security as a step toward meeting the problem.

He promoted his program not as a function of conservative purity, but of sturdy common sense. Theres no such thing as a left or a right, he said in that same 1964 speech, theres only an up or down.

He extolled the common man, the forgotten American, and his innate dignity. In his first inaugural address, Reagan hailed the men and women who raise our food, patrol our streets, man our mines and factories, teach our children, keep our homes, and heal us when were sick professionals, industrialists, shopkeepers, clerks, cabbies, and truck drivers.

He didnt support tax cuts for the rich so much as tax cuts for everyone, and didnt obsess over entrepreneurship. According to Olsen, Reagan mentioned the word entrepreneur only once in all of his major campaign and presidential speeches on the economy between November 1979 and the passage of the tax-cut bill in July 1981.

He had a pragmatic cast. In his campaign for governor of California, he noted that public officials are elected primarily for one purpose to solve public problems.

He never let the perfect be the enemy of the good enough for a working politician. Hostile to taxes, he raised them as governor of California in response to a budget crisis, and as president as part of a Social Security deal. A free-trader, he brushed back the Japanese on trade.

Reagans tone and program, coupled with his generational talent as a politician, allowed him to unlock the working-class vote in his races for governor and president. The Reagan Democrat has been part of our political vocabulary ever since.

President Trump is a very different man and politician, but it is telling how not having learned the purported lessons of Reagan he was able to go and get these voters in a way that Republican politicians bound by Reaganite truisms were not.

All that said, Reagan was hardly a friend of the welfare state. He said the ultimate source of the New Deal was Mussolinis fascism. His foundational 1964 speech attacked farm programs, government planning, welfare, the size and power of bureaucracy and regulations that have cost us many of our constitutional safeguards. He called for adding voluntary features to Social Security, and for electing Barry Goldwater to stop the advance of socialism.

Reagan was a constitutional conservative, although an exceptionally gifted one who understood how to meet Americans where they live. In this important book, Henry Olsen reminds us how.

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The Reagan that today's Republicans have forgotten - New York Post

Sen. Bernie Sanders pointed the finger squarely at Republicans for kicking up a federal probe into allegations his wife fraudulently obtained a loan for the Vermont college she once led, saying Sunday the Republican National Committee is very excited about the controversy.

The interview marked the 2016 presidential candidates latest effort to downplay the FBI investigation, which reportedly is looking at whether Jane Sanders committed fraud to get a $10 million loan for a Burlington College expansion.

Asked on CNNs State of the Union about the case, Sen. Sanders quickly pointed out how the allegations first surfaced.

I know this will shock the viewers -- the vice-chairman of the Vermont Republican Party who happened to be Donald Trump's campaign manager raised this issue and initiated this investigation, he said. I think what you're looking at is something that [the] Republican National Committee is very excited about.

SANDERS PANS PROBE, BUT ALLEGATIONS ARE SERIOUS

The Vermont independent senator adamantly denied that he or his staff ever reached out to the bank in question to approve any loans related to the transaction and defended his wife.

U.S. Democratic presidential candidate Bernie Sanders and embraces his wife Jane on stage during a rally in Vallejo, California, May 18, 2016. (REUTERS/Stephen Lam)

My wife is perhaps the most honest person I know. She did a great job in Burlington College, Sanders said. Sadly we are in a moment where parties not only attack public officials, they have to go after wives and children. You know, this is pathetic and that's the way politics is in America today.

The comments track with others the senator made last week dismissing the probe as a pathetic and political attack.

The Republican Sanders referred to in his CNN interview was Brady Toensing, a former Donald Trump presidential campaign official who wrote the original complaint. The complaint, however, raised numerous red flags about the application that might not be so easily ignored, including the sources she listed as proof of the school's ability to repay.

The loan was arranged by Sanders wife when she was president of the now-closed college to acquire 33 acres of lakefront property to improve and expand the small, non-traditional school.

People close to the couple, including Sanders' presidential campaign manager Jeff Weaver, have confirmed that the independent senator and his wife each have retained a lawyer in connection with the case.

Jane Sanders, college president from 2004-2011, structured the loan deal in two parts -- a $6.5 million loan from Peoples United Bank to buy tax-exempt bonds issued by a state agency that signed off on the deal and a $3.65 million second mortgage from the Roman Catholic Dioceses of Burlington.

To secure the money, Sanders submitted a spreadsheet that attempted to show the school had $2.4 million in confirmed pledges, grants and other funds to repay the debt.

The document -- obtained through a Freedom of Information Act request and listed as exhibit B in the original complaint -- showed the money would come from 40 separate entries.

However, each entry was denoted only by initials, under such categories as friends or faculty and staff and with no additional documentation, according to the complaint filed to the Federal Deposit Insurance Corp.s office of the inspector general.

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Sanders blames Republicans for FBI probe of wife - Fox News

Rank-and-file Republicans are far more willing to blame the GOP-led Congress for their partys lack of progress, not President Trump.

NEW YORK In firm control of the federal government, President Trump and his Republican Party have so far failed to deliver on core campaign promises on health care, taxes, and infrastructure. But in New Yorks Trump Tower cafe, the Gentry family blames Congress, not the president.

Like many Trump voters across America, the Alabama couple, vacationing last week with their three children, says they are deeply frustrated with the presidents GOP allies, faulting them for derailing Trumps plans. As the family of five lunched in Trump Tower, Sheila Gentry offered a pointed message to those concerned with the GOPs ability to govern five months into the Trump presidency.

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Shut up. Get on board. And lets give President Trump the benefit of the doubt. It takes a while, said the 46-year-old nursing educator from Section, Ala.

They just need a good whoopin, said her husband, Travis Gentry, a 48-year-old engineer, likening congressional infighting to unruly kids in the back seat of the car.

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Your afternoon shot of politics, sent straight from the desk of Joshua Miller.

As Washington Republicans decry Trumps latest round of Twitter attacks, Republicans on the ground from New York to Louisiana to Iowa continue to stand by the president and his unorthodox leadership style. For now at least, rank-and-file Republicans are far more willing to blame the GOP-led Congress for their partys lack of progress, sending an early warning sign as the GOP looks to preserve its House and Senate majorities in next years midterm elections.

Inside and outside the Beltway surrounding the nations capital, Republicans worry their party could pay a steep political price unless they show significant progress on their years-long promise to repeal and replace Democrat Barack Obamas health care law. Even more disturbing, some say, is the Republican Partys nascent struggle to overhaul the nations tax system, never mind Trumps unfulfilled vows to repair roads and bridges across America and build a massive border wall.

Its a problem for Republicans, who were put in place to fix this stuff. If you cant fix it, I need someone who can, said Ernie Rudolph, a 72-year-old cybersecurity executive from suburban Des Moines, Iowa.

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There is no easy path forward for the Republican Party.

The nonpartisan Congressional Budget Office predicts that health care legislation backed by House and Senate Republican leaders and favored by Trump would ultimately leave more than 20 million additional Americans without health care, while enacting deep cuts to Medicaid and other programs that address the opioid epidemic. In some cases, the plans would most hurt Trumps most passionate supporters.

Just 17 percent of Americans support the Senates health care plan, according to a poll released last week, making it one of the least popular major legislative proposals in history.

The president on Friday injected new uncertainty into the debate by urging congressional Republicans simply to repeal Obamas health care law immediately while crafting a replacement plan later, which would leave tens of millions of Americans without health care with no clear solution.

That shift came a day after several Republicans in Congress condemned Trumps personal Twitter attack against MSNBC hosts Mika Brzezinski and Joe Scarborough, which was viewed across Washington as an unwanted distraction in the midst of a sensitive policy debate.

Trumps nationwide approval rating hovered below 40 percent in Gallups weekly tracking survey, even before the tweet. At the same time, just one in four voters approve of Republicans in Congress, Quinnipiac University found.

Democrats, meanwhile, report sustained energy on the ground in swing districts where Republicans face tough re-election challenges. Democrats need to flip 24 seats to win the House majority next fall, a goal that operatives in both parties see as increasingly possible as the GOP struggles to govern.

A former Obama administration national security aide, Andy Kim, is among a large class of fresh Democratic recruits.

People are fired up, said Kim, whos challenging Representative Tom MacArthur of New Jersey. Its not just about the health care bill. Its not just about Trump. ... Theyre concerned about the ability of this government to put together any credible legislation going forward.

Republicans are also concerned.

In Iowas Adair County, GOP county chairman Ryan Frederick fears that Republican voters will begin to lose confidence in their partys plans for taxes, infrastructure, and immigration should the health care overhaul fail.

Everyone I know looks at trying to get Obamacare repealed and says, If were making this much of a pigs breakfast out of that, what are we going to do with tax reform? Frederick said.

Weve dreamed of killing Obamacare for seven years. And we have the House, the Senate and the presidency, and we cant do it? Whats the deal, guys?

Louisiana Republican Party Chairman Roger Villere bemoans factionalism in his party. Intraparty divisions are holding up health care, he says, which in turn keeps the GOP-led government from tackling other priorities.

Hes looking to Trump for leadership.

Hes the ultimate negotiator, Villere said. Well see how good he is.

Back in Trump Tower, Sheila Gentry conceded that Trumps tweets sometimes make her cringe, but she still has confidence in her president. She cant say the same for congressional Republicans.

The Republicans who are in there now that arent being very supportive, theyre going to find themselves without a job soon if they dont step it up, she said.

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Republican voters blame Congress, not Trump, for stalemate - The Boston Globe

Congressional Republicans and Trump administration officials were at odds Sunday over how close the Senate is to a deal on an Obamacare repeal package and what the legislation should look like an indication that the upper chamber may be further from agreement than some politicians let on.

We are getting close, Marc Short, President Donald Trumps director of legislative affairs, said on Fox News Sunday. The White House is making calls this weekend to try and get the Senate package across the finish line, Short added.

Story Continued Below

But Kentucky Sen. Rand Paul, a conservative who was one of the holdouts who doomed efforts to vote on health legislation last week, disagreed: I don't think we're getting anywhere with the bill we have. We're at an impasse, Paul said on the same show.

Republicans have scrambled to put together a bill repealing President Barack Obamas signature reform, but conservative and moderate lawmakers in the party remain at odds on how to do it. And on Sunday, Republicans appeared no closer to agreeing on how to deliver on years of promises to undo the 2010 legislation.

Among the issues theyll have to grapple with when they return from the July 4th recess: Whether to approve a proposal by conservatives to dial back regulation on some insurance plans. Short said the bipartisan Congressional Budget Office had been asked to analyze two versions of Senate Majority Leader Mitch McConnells bill one with and one without the conservatives proposal to estimate their impact on the federal budget and on insurance coverage.

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The proposal, from Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah), would create parallel health insurance markets in states. One market would contain protections for people with pre-existing conditions and coverage of essential health benefits like maternity care and mental health services, and the other would allow the sale of skimpier plans, likely without federal subsidies.

Short said the White House supports Cruzs and Lees effort to come up with a conservative adjustment to the bill. He said he anticipated a vote on the Senate bill the week after the July 4th recess.

But their proposal could cost McConnell votes from more moderate senators who believe the two-market approach would lead to the collapse of the individual insurance market because all the older and sicker patients would be served by the highly regulated, more expensive system, separate from healthier and younger Americans.

Sen. Bill Cassidy (R-La.) argued on NBC's "Meet the Press" that the way to make coverage more affordable is to keep everyone in the same insurance pool.

Turns out to lower premiums, theres ways you do that. You get more people into the risk pool so its healthier and younger, number one. Number two, for those who are lower income, theyre going to need some assistance. And so you need money for that assistance, Cassidy said.

Ohio Republican Gov. John Kasich, who is seen as influential with Ohio Sen. Rob Portman, a Republican still on the fence about the Senates approach so far, said on ABCs This Week that the bill needs more Medicaid funding, and he said its tax credits would not be enough to help people buy individual insurance plans.

Kasich, who faced off against Trump in the 2016 Republican presidential primaries, also said the bill doesnt do enough to stem the opioid crisis. McConnell added an extra $45 billion in opioid funding to try to win over moderate Republicans who have argued that the bill's cuts to Medicaid would hurt people struggling with addiction.

"It's anemic," Kasich said. "As I said to Sen. Portman at one point, it's like spitting in the ocean. It's not enough."

Republicans are also rehashing an old argument about whether to simultaneously repeal Obamacare and approve its replacement, or whether they can wait to work out a new health care system until after they undo the 2010 law.

Trump disrupted the Senates efforts Friday morning by tweeting that Republicans could follow the latter course, which had been rejected by congressional leaders. If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date! he wrote on Twitter.

Health and Human Services Secretary Tom Price said on Meet the Press that despite Trumps tweet, the administrations official stance is not to repeal and replace Obamacare separately. McConnell has also rejected that approach.

But Paul pushed for separate tracks Sunday, saying the only thing a majority of Republicans agreed on was repealing Obamacare. Fellow Republicans Ben Sasse (R-Neb.) and Lee also said lawmakers could pass repeal legislation by itself but delay the implementation to give themselves time to craft a replacement.

Kasich said repealing Obamacare without an idea of what would take its place could cause people to lose insurance coverage.

You cant just get rid of this, because you cant leave people without what they need, he said.

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Republicans can't agree on where Senate Obamacare repeal stands - Politico