The House Passed 2 Important Bills Before Leaving Town-- One Good One And One Bad One... And Only The Bad One Will Become Law

Before rushing home for Christmas on Thursday, the House voted to pass Trump's NAFTA 2.0-- H.R. 5430-- (385-41) and voted to pass Tom Suozzi's Restoring Tax Fairness for States and Localities Act--H.R. 5377-- 218-206. Let's start with NAFTA 2.0. Hoyer introduced it and it was supported by 193 Democrats and 192 Republicans. Trump is eager to sign it. 38 Democrats, 2 Republicans and Justin Amash (I-MI) had the sense to oppose it. It was tough for Democrats to vote against it even though they all knew it sucked because most of the unions had come out for it. Among the independent-minded Dems with the guts to say no were this outstanding baker's dozen:

• Barbara Lee (D-CA)
• Ted Lieu (D-CA)
• Jamie Raskin (D-MD)
• Pramila Jayapal (D-WA)
• AOC (D-NY)
• Andy Levin (D-MI)
• Nanette Barragán (D-CA)
• Jim McGovern (D-MA)
• Ayanna Pressley (D-MA)
• Mark DeSaulnier (D-CA)
• Ilhan Omar (D-MN)
• Chuy Garcia (D-IL)
• Rashida Tlaib (D-MI)

The bill flew right in the face of the #1 reason Ted Lieu had decided to leave his family in beautiful southern California and go work in Congress in miserable DC: the Climate Crisis. He voted NO. Yesterday he told us that "Climate change is an existential threat to our nation and our planet. We simply cannot wait until the next trade deal to begin to take action. At the very moment when we should be taking bold action to address the climate crisis, this deal continues the same old 19th century policies that got us here. For this reason, every major environmental group opposed the USMCA, and I am proud to stand with them in opposing the status quo."

Here's why one of organized labor's best friends and closest allies in Congress, Andy Levin, voted against this deceitful, Trumpist bill. It's worth listening to the whole 78 seconds of what Levin had to say. He's telling the truth-- about something that is excruciatingly painful for him-- which is more than I can say for the party leadership.




Since the bill contained some good points negotiated by the Democrats, it was a tough one to decide on. Pramila Jayapal issued this statement to explain her thinking to her Seattle supporters:

“I have carefully considered the pros and cons of the USMCA over the past several days, engaging in multiple conversations with stakeholders in the business, tech, labor and environmental community in my district and at the national level. This has been a difficult decision to make. I am grateful to the many leaders who discussed their positions and the pros and cons of this agreement with me.

There is no question that we need a new model for a trade agreement that can support American jobs, climate preservation and global business all at the same time. NAFTA was the epitome of the opposite kind of trade agreement. Since the original NAFTA agreement went into effect in 1994, it has had a devastating impact on Washington and our workers-- killing 12,560 manufacturing jobs and leaving workers unemployed or forced to take significantly lower-paying jobs. Our state’s net agricultural exports have plummeted and our giant-- and growing-- agricultural trade deficit has squeezed farmers in Washington and put small farms out of business. And while rarely recognized, the disastrous effects of NAFTA have driven migration north from Mexico, as small Mexican farmers were driven out of business and forced to seek opportunities north of the border.

Thanks to the hard work of House Democrats and Speaker Pelosi, the AFL-CIO, and key communities allies, we were able to take what would have been a disastrous USMCA deal from the Trump Administration and negotiate a significantly better trade deal, so that standards and enforcement of labor rights are included in the agreement itself. In addition, thanks to extraordinary negotiating from Democratic members of the Congressional Progressive Caucus, we got a clean sweep of wins to remove provisions from the Trump Administration’s proposal that would have allowed Big Pharma to make prescription drugs even more expensive for Americans. We also forced the Administration to add stronger labor and environmental protections and eliminate a provision that would have allowed wealthy investors to attack and strike down environmental protections. Let me be clear: Left to his own devices, Donald Trump would have pushed through a much worse trade deal for American workers and our planet.

However, after examining the agreement from all sides, I do not believe that USMCA goes far enough. Specific to Washington state, I am deeply concerned that jobs in the aerospace industry-- critical to our state’s economy-- have received insufficient protections. Several other large labor unions in the state have also articulated some significant concerns that this deal does not do enough to protect vulnerable and exploited workers and prevent outsourcing of jobs to places with lower labor standards. USMCA also relies on the Mexican government to strictly enforce labor standards, ensure strong Mexican unions, and not undercut American workers-- without appropriate measures or assurances to make sure the Mexican government does the right thing.

USMCA also does not do nearly enough to address climate change or protect our precious natural resources. While there are some important provisions related to the environment, the Trump Administration’s failure to recognize the facts and scientific consensus on the urgency of addressing climate change prevented them from incorporating any real measures to protect our planet and people. Every leading environmental organization has opposed the USMCA with force because it fails in all environmental priority areas.  Climate change is the singular crisis of our time, and we cannot afford to kick the can down the road. Washington’s Seventh Congressional District has led on climate issues precisely because we have so many leading scientific and advocacy organizations that have prioritized climate change.

I want to be clear that there is no question that USMCA is better than NAFTA for workers and families across our country. In listening to leading business voices from Washington’s Seventh Congressional district, I also am deeply aware that there will likely be benefits to the Port of Seattle and so many Washington businesses. I have listened to these perspectives very carefully and with an open mind.

I had very much hoped to be able to vote yes on this trade deal. While I voted no on USMCA, I recognize how important trade is to my district, and I am grateful for the feedback and conversations I’ve had with constituents on this issue. I remain committed to pushing for trade policies that are fair and promote a healthy, safe and prosperous future for our communities.”

The Suozzi bill about taxes was a lot easier for progressives to get enthusiastically behind. It was almost a party-line vote-- 213 Democrats voting for it (with 16 nays) and 189 Republicans voting against it while 5 crossed the aisle to vote with the Democrats. The bill will increase the tax deduction for state and local taxes (SALT) in 2019 to $20,000 for persons filing a joint tax return. It eliminates the current $10,000 cap on the deduction in 2020 and 2021. And it increases the top marginal income tax rate to 39.6% (from 37%) beginning in 2020, and reduces the dollar amount at which the increased tax rate begins-- so a middle class tax relief bill that McConnell won't allow a vote on and that Trump would veto if it passed the Senate.

This were the 16 Democrats who crossed the aisle:

• Colin Allred (New Dem-TX)
• Cindy Axne (New Dem-IA)
• Joaquin Castro (New Dem-TX)
• Lloyd Doggett (D-TX)
• Abby Finkenauer (D-IA)
• Jared Golden (D-ME)
• Kendra Horn (Blue Dog-OK)
• Anne Kuster (New Dem-NH)
• Susie Lee (New Dem-NV)
• Ben McAdams (Blue Dog-UT)
• Stephanie Murphy (Blue Dog-FL)
• AOC (D-NY)
• Chris Pappas (New Dem-NH)
• Mark Pocan (D-WI)
• Abigail Spanberger (Blue Dog-VA)
• Greg Stanton (New Dem-AZ)

CNBC reported that "New York, New Jersey and California are among the states where taxpayers are feeling the brunt from the $10,000 SALT cap. Among New Yorkers who itemized in 2017, the average SALT deduction claimed was $23,804, according to the Tax Policy Center. New Jersey itemizers wrote-off an average of $19,162 on state and local taxes that year, while Californians claimed $20,451, the Center found. These states are also home to some of the highest income and property taxes in the nation.

Controversy over the SALT cap also has spurred litigation by the affected states.

New York, Connecticut, Maryland and New Jersey have filed suit against the Treasury Department and the IRS, asserting that the SALT deduction limit was unconstitutional.

Separately, New York, New Jersey and Connecticut are also fighting the Treasury Department and the IRS in court over the agencies’ move to block workarounds established by the three states.

Those workarounds would allow municipalities to establish charitable funds to pay for local services and offer property tax credits to incentivize homeowners to give.

This way, taxpayers can write off the payment as a charitable deduction on their federal returns, which is still permitted if you exceed the standard deduction. In 2019, that is $12,200 for single filers and $24,400 for married filing jointly.

The IRS and Treasury blocked the workarounds in June, saying the receipt of a state or local tax credit in return for the contribution would be a “quid pro quo.”

Suozzi’s bill also calls for raising the highest marginal individual income tax rate.

The Tax Cuts and Jobs Act slashed individual income tax rates across the board, lowering the top rate for the highest earners to 37% from 39.6%.

The proposed legislation would raise the rates back up to 39.6% for the highest earners and reduce the income threshold at which the top rate would apply.

“It’s hard to see it happening as a standalone bill, even with the rate increase,” said Jared Walczak, director of state tax policy at the Tax Foundation.

“It’s hard to see it happening unless it’s part of a much larger tax bill,” he said.

After the bill passed Thursday, I spoke with Suozzi on his way back to Long Island from DC on the train. You could tell he was overjoyed, not just because he was getting out of Washington, but because the bill he had worked so hard on-- first in the House Ways and Means Committee and then on the floor-- had just passed. "Conservatives," he told me, have always been trying to get rid of state and local taxes... they don't want blue states, progressive states, to be able to fund good public education, good health care programs... They want it all privatized... This was a team effort, a lot of us from all different ideological persuasions got this over the finish line. Now I have to work with Schumer to see what he can do to get this done in the Senate." I reminded him about MoscowMitch, the Grim Reaper. He's undaunted. No one thought he would get his bill passed in the House this year either, he reminded me. But... well, there it is. And he's not giving up. This bill is not just the right thing to do; it's the write thing for his Long Island constituents.

Just as we were ending our conversation-- with a little discussion of Tim Buckley's music-- a California progressive candidate from Riverside County, Liam O'Mara, called. Liam is running to represent a district held by ultra-conservative Trumpist Ken Calvert. Calvert, of course, was not one of the Republicans who backed Suozzi's bill, even though it would have been very advantageous for his own constituents. "Calvert," O'Mara said to me, "wants you to pay higher taxes, simple as that. Yep, he wants more of your hard-earned money eaten up by Washington. He voted for that when he backed Trump's terrible tax bill, which removed write-offs that helped middle class families, causing many to see a sharp rise in their tax burden. And now, he voted against the Restoring Tax Fairness for States and Localities Act, which could restore some of the federal deductions for California taxes that we used to enjoy. The bill also includes a very small rise in the marginal rates paid by the super-rich, which addresses another problem with the last GOP tax cut-- its shifting more of the burden onto the middle. For the first time in American history, billionaires have a lower effective tax rate than the middle class families of the 42nd. In addition, the debt accumulated to pay for that tax break for the rich falls on the rest of us in the form of interest. It's like we all took a cash advance on our credit card in order to buy Tiffany jewelery for the richest couple in town. It makes no damned sense. By refusing to address either of these issues and voting against the Restoring Tax Fairness act, Calvert just flipped the bird to middle class families. He wants all of us to pay higher taxes so the super-rich can get even richer."