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President Trump promised to repeal and replace the Affordable Care Act "immediately" and "on Day 1" while on the campaign trail. But now, he claims he never said he'd get health care reform done quickly. (Peter Stevenson/The Washington Post)

After a smarting defeat on health care, President Trump is moving on to an ambitious bid to rewrite the U.S. tax code. But the ultra-conservative GOP lawmakers who stymied Trump on health care aren't going away, and if Trump is to avoid a second major setback in Congress, he'll need towin over far more of them this time around.

The "House Freedom Caucus,"as the few dozen members of the group callthemselves, blocked Trump and Ryan's health-care bill because it wasn't conservative enough for them, offering too much in the way of benefits and interfering too much in the insurance market. When it became clear the vast majority of thegroup's members were voting no, Trump after a consultation withHouse Speaker Paul D. Ryan (R-Wis.) pulled the bill.

The good news for Trump and Ryan, however, is that they and the House Freedom Caucus have, in their public statements, expressed broad areas of agreement on what to do with the tax code.There's still, however, plenty of potential for conflict as Trump, Ryan and the caucus once again come together in search of a deal.

Here's whatthe House Freedom Caucus's members have said they're looking for.

Members of the group generally endorse the same basic principles for reform: Reduce tax rates for everyone. Then, to make up for some of the revenue the government is foregoing under those new rates, eliminate special deductions, exemptions and loopholes that allow certain categories of taxpayers to avoid paying taxes on portions of their income.

This has long been the position of conservative Republicans, and itis also the approach embodied in the plans proposed by Republicans, including Trump and Ryan. For instance, the plan Ryan and his colleagues in the House put forward last year would eliminate all deductions for individual taxpayers except for the deductions for mortgage interest and charitable giving. Those deductions allow Americans to avoid taxes on money they pay in interest on their homes, along with any donations they make.

That plan might not go far enough for a conservative lawmaker like Rep. Thomas Massie (R-Ky.). In 2013, Massie told Bloomberg he supported a single tax rate for all taxpayers, with no exceptions whatsoever. I love the flat tax, and Im not afraid of getting rid of every deduction, Massie said.

All the same, mainstream Republicans are basically in agreement with their party's conservative faction when it comes to taxes at least to a far greater degree than they were on health care.

Republicans believe health-care reform is still possible even after House leadership pulled the bill abruptly before it was scheduled for a vote. (Alice Li,Jayne Orenstein/The Washington Post)

Closing loopholes could, in theory, allow Republicans to deliver their promised rate cuts without decreasing the totalrevenue going to the government a combination that would keepthe new legislation from adding to the federal debt.

Under Ryan's plan, by contrast, reduced taxes would mean the federal government would give up at least $2.5 trillion in revenue over a decade, according to an analysis by the nonpartisan Tax Policy Center. The figure accounts for increased economic growth, so that is $2.5 trillion that the federal government would have to borrow unless lawmakers found other ways of limiting deductions and loopholes or federal expenditures to save money.

So far, members of the Freedom Caucus have indicated they could accept a plan that implied more borrowing. They are less concerned about closing loopholes than they are about making sure rates go down and that, in general, Americans pay less in taxes.

"I think there's been a lot of flexibility in terms of some of my contacts and conservatives in terms of not making it totally offset," Rep. Mark Meadows (R-N.C.), the chairman of the Freedom Caucus, told ABC News on Sunday on "This Week," arguing that tax cuts would provide financial relief for ordinary American families.

"Does it have to be fully offset?" Meadows asked. "My personal response is no."

To address the deficit, members of the group almost universally favor steep cuts in government spending, part of an overall mission to shrink government and limit its reach. They also generally believe that lower taxes will produce massive economic growth, so much so that the government may collect even more than it would have under the former higher-taxes, slower-growth scenario.

Rep. Dave Brat (R-Va.) hinted at that last month onCNN, suggested he would be willing to consider new spending on some of Trump's priorities once taxes had been reduced. "Those spending pieces, we'll debate those coming up the military, the wall, the infrastructure plan but you've got to see tax reform in place first," Brat told CNN last month. "Otherwise, we can't afford it."

If those economic benefits do not materialize, though, the government would be forced to borrow more as it went deeper in debt.

There is one element of Ryan's plan that could be cause for concern among the Freedom Caucus. The plan would effectively levy a new tax on imports, while exempting goods and services exported from the United States for sale abroad from taxation.

Ryan and his allies argue this provision, known as a border adjustment, would simplify the tax system. In essence, the border adjustment would relieve federal authorities of the responsibility of investigating taxpayers' business overseas. Proponents also say the provision would encourage manufacturers to produce domestically and to hire American workers.

Yet conservative lawmakers such as Rep. Jim Jordan (R-Ohio) are opposed to any new kind of tax. The border adjustment could increase prices for American consumers buying products from abroad, although economists and legal experts debate the plan's likely practical consequences for customers, and the effects could vary for different businesses.

"My reasoning is very basic," Jordan told the Atlantic. "The idea that youre going to add an entirely new tax is a big problem."

Meadows is not eager for a border adjustment, either, Axios reported. The lack of support from conservative lawmakers could be a problem for GOP leaders.

Republicans are trying to avoid a Democratic filibuster in the Senate. To do so, they will have to write legislation that does not increase the federal borrowing over the long term and they are hoping the border adjustment will help them do so.

Because the United States currently imports more than it exports, the new tax on imports would far exceed the exemption for exports. As a result, the border adjustment would bring in billions in new revenue for the federal government, lessening the need for more borrowing.

In the long term, however, most economists expect U.S. exports to increase. Eventually, they predict, exports should exceed imports to the point where a border adjustment which gets rid of taxes on exports would cost the government money, adding to the national debt. It remains to be seen whether Congress's budgetary referees will give Republicans credit for controlling federal borrowing in the long term, given the uncertain trend in exports.

"Let's go ahead and pass one without [a] border adjustment," Meadows said.

More:
Here's what the Republicans who just stopped Trump want next - Washington Post

New York Times

Dealt a Defeat, Republicans Set Their Sights on Major Tax Cuts New York Times WASHINGTON Picking themselves up after the bruising collapse of their health care plan, President Trump and Republicans in Congress will start this week on a legislative obstacle course that will be even more arduous: the first overhaul of the tax ... In the wake of failure, Republicans eager to push tax cutsMSNBC Priebus: In Wake Of Repeal Failure, Time For Republicans 'To Start Governing'TPM Donald Trump deepens Republican feud over health fiascoThe Australian all 125 news articles »

Link:
Dealt a Defeat, Republicans Set Their Sights on Major Tax Cuts - New York Times

Good morning from Augusta, where Gov. Paul LePage is lining up with President Donald Trump and against many congressional Republicans after intra-party squabbling made leaders pull a proposal to repeal and replace the Affordable Care Act on Friday.

The Republican governor was against the bill at its rollout early this month, but he went public in support of it on Thursday after Republicans made changes to the bill that he and other conservatives had asked for, such as an earlier wind-down of support for Medicaid expansion.

But conservatives wanted a fuller repeal, while a bloc of moderate Republicans including U.S. Sen. Susan Collins of Maine opposed it after an estimate found that it would make 14 million people lose coverage by 2018 and increase premiums for many between ages 50 and 64.

On Thursday, LePage told WGAN that Republicans may have been moving too fast on health care. When asked if the bill was worthy of support, he said it was improving. But later that day, his office released a letter dated Wednesday in which he and other governors backed it with his spokeswoman calling it a start.

By Saturday, he was in war mode, telling Fox News Neil Cavuto that any Republican that did not support this effort for fixing the ACA, I think they should lose the next election and Congress is broken with a constitutional crisis looming.

I think the American people elected Donald Trump to bring some change and some reform to this country and if the Republicans in Congress dont realize it, its time for you go home, LePage said.

The governor will be bartending for charity in Hallowell tonight, so well try to ask him more or at least askhim for a stiff drink. More on that in tomorrows Daily Brief. Michael Shepherd

This time two years ago, Republican U.S. Rep. Bruce Poliquin was facing a 2016 rematch from Democrat Emily Cain in Maines 2nd District. Now, hes a second-term congressman, which has dampened chatter about the 2018 race.

Now, one Democrat is now talking about taking on Poliquin Jonathan Fulford of Monroe, a construction company owner with a populist streak who said on Friday that hes considering a run and may be is more likely to run for the 2nd District than any other public office in 2018.

Fulford is best-known statewide for losing two close races in 2014 and 2016 to Maine Senate President Mike Thibodeau, R-Winterport, in Waldo County, a top legislative swing district.

He ran those races championing progressive causes such as universal health care and is from the wing of the party that pushed Vermont Sen. Bernie Sanders to victory in Maine Democratic presidential caucuses in 2016. Fulford also ran unsuccessfully against Maine Democratic Party Chairman Phil Bartlett last year.

Fulford ran twice as a taxpayer-funded Clean Election candidate which isnt available for federal races and wondered aloud if a Sanders-style campaign model built on small donations would be an option against Poliquin, who raised more than $3.3 million for 2016s race.

Plus, he said theres a lot to get up to speed at the federal level on before running and henoted the possibility of a political realignment in 2018. Both Collins and Poliquin havent ruled out gubernatorial runs that would send politicians scrambling into new primary battles.

Im in the early stages of looking at all those and then evaluating whether or not it makes sense for me to run or not or me to support somebody else or what makes sense, Fulford said. And I dont have an answer yet. Michael Shepherd

Dont judge me. I recently introduced my younger son to Mr. T, who has long been one of my favorite American icons. Despite his tough image, hes a positive force on society and has done a lot of work to help kids. Hes currently a contestant on Dancing with the Stars, which I admit I havent watched but Ive been following his tweets. Sounds like the competition isnt going so well:

To any and everybody who ever felt like quitting Dont quit! he tweeted last night. Try to get back up! Dont stay down!

On the A-Team, however, hes just as likely to be punching bad guys in the face and driving that awesome red and black Chevy van like its a Ferrari. There are lots of explosions and gunfire but one truth about the show is no one ever gets hurt. The boy and I watched an episode the other night and I built Mr. T up, just like he deserved. The boy was impressed.

Daddy, if you were Mr. T what would you do to the bad guys? he said.

Id beat em up! I said. What would you do?

If I was Mr. T Id do a big belly flop right on them, he said.

Obviously, he requires more training. Heres your soundtrack. Christopher Cousins

Excerpt from:
LePage: Republicans who bucked Trump on health care should 'go home' - Bangor Daily News

Senate investigators are planning to question Jared Kushner as part of a broad inquiry into ties between Trump associates and Russia.

Senate investigators are planning to question President Donald Trumps son-in-law Jared Kushner as part of a broad inquiry into ties between Trump associates and Russian officials or others linked to the Kremlin, the New York Times is reporting.

Kushner is a close adviser to Trump. The Times said the White House Counsels Office was informed this month that the Senate Intelligence Committee wanted to question Kushner about meetings he arranged with the Russian ambassador to the U.S., Sergey Kislyak. The committee is investigating Russian interference in the 2016 presidential election. A White House spokeswoman told the Times that Kushner is willing to talk with Senate investigators about meetings with Kislyak and also with Sergey Gorkov, the chief of a bank that drew sanctions during the Obama administration.

Republicans scramble over shutdown: A top Republican with close ties to the White House tells Axios that after the health-care failure, a government shutdown in April is more likely than not...Wall Street is not expecting a shutdown and the markets are unprepared. A senior GOP aide disputed the prediction but Axios writes the math is bleak for the House to head off a shutdown. A stopgap budget runs through April 28.

Also read: Debt limit looks like a real struggle after health bill debacle.

Dodd-Frank hearings: The House Financial Services Committee will hold hearings on three portions of Dodd-Frank this week, the Hill writes. The Wall Street reform law has long been in Republican crosshairs, and on Tuesday the panel will have a hearing on the way the Financial Stability Oversight Council designates systemically important financial institutions. That will be followed by a hearing on the state of bank lending, which Republicans argue is hampered by the law. A hearing on the impact of the Volcker Rule is also scheduled. That bans banks from making certain investments and trades with their own assets.

Freedom Caucus member quits group: Rep. Ted Poe quit the conservative House Freedom Caucus on Sunday over its opposition to the Republican health-care plan. CNN says the Texas Republican was the first member of the group to leave in the fallout over its role in defeating the health bill. Poe said in a statement saying no is easy, leading is hard and that quitting the caucus would allow him to be a more effective member of Congress.

Also read: What Trump can do to undermine Obamacare, now that the GOP health bill has failed.

Link:
Senate panel to question Kushner over Russia meetings | Republicans scramble to head off government shutdown - MarketWatch

Republicans may have failed to overthrow Obamacare last week, but there are plenty of ways they can chip away at it.

The Trump administration has already begun using its regulatory authority to water down less prominent aspects of the 2010 healthcare law.

Earlier last week, newly confirmed Health and Human Services Secretary Tom Price stalled the rollout of mandatory Medicare payment reform programs for heart attack treatment, bypass surgery and joint replacements finalized by the Obama administration in December.

The delays offer a glimpse at how President Donald Trump can use his administrative power to undercut aspects of the Affordable Care Act (ACA), including the insurance exchanges and Medicaid expansion that Republicans had sought to overturn.

The Republicans' failure to repeal Obamacare, at least for now, means it remains federal law. Price's power resides in how to interpret that law, and which programs to emphasize and fund.

Hospitals and physician groups have been counting on support from Medicare - the federal insurance program for the elderly and disabled - to continue driving payment reform policies built into Obamacare that reward doctors and hospitals for providing high quality care at a lower cost.

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The Obama Administration had committed to shifting half of all Medicare payments to these alternative payment models by 2018. Although he has voiced general support for innovative payment programs, Price has been a loud critic of mandatory federal programs that dictate how doctors should deliver healthcare.

Providers such as Dr. Richard Gilfillan, chief executive of Trinity Healthcare, a $15.9 billion Catholic health system, say they will press on with these alternative payment plans with or without the government's blessing. But they have been actively lobbying Trump officials for support, according to interviews with more than a dozen hospital executives, physicians and policy experts.

Without the backing of Medicare, the biggest payer in the U.S. healthcare system which Price now oversees, the nascent payment reform movement could lose momentum, sidelining a transformation many experts believe is vital to reining in runaway U.S. healthcare spending.

Price "can't change the legislation, but of course he's supposed to implement it. He could impact it," said John Rother, chief executive of the National Coalition on Health Care, a broad alliance of healthcare stakeholders that has been lobbying the new administration for support of value-based care.

The move Friday to pull the Republican bill only reinforces the risk to the existing law, which Trump said on Friday "will soon explode."

"It seems that the Trump Administration now faces a choice whether to actively undermine the ACA or reshape it administratively," Larry Levitt, senior vice president at Kaiser Family Foundation, wrote on Twitter.

"The ACA marketplaces weren't collapsing, but they could be made to collapse through administrative actions," he added.

NEW PAYMENT PLANS AT RISK

The United States spends $3 trillion a year on healthcare - more by far than 10 other wealthy countries - yet has the lowest life expectancy and the highest infant mortality rate, according to a 2013 Commonwealth Fund report.

Health costs have soared thanks in part to the traditional way doctors and hospitals get paid, namely by receiving a fee for each service they provide. So the more advanced imaging tests a doctor orders or pricey procedures they perform, the more money he or she makes, regardless of whether the patient's health improves.

"We have a completely broken economy in healthcare," said Blair Childs, senior vice president at hospital purchasing group Premier Inc. "Literally, all of the incentives in fee-for-service are for higher cost."

Alternative payment models are designed to remove incentives that reward overtreatment of patients. Private insurers are on board, with Aetna Inc, Anthem Inc, UnitedHealth Group and most Blue Cross insurers announcing plans to shift half of their reimbursement to alternative payment models to control costs.

To promote the shift to alternative payments, the ACA created an incubator program at the Centers for Medicare and Medicaid Services (CMS). The CMS innovation center is funded by $10 billion over 10 years to test payment schemes aimed at improving quality and cutting the cost of care.

The Obama administration's decision to make some of these payment programs mandatory has drawn the ire of Price, a former U.S. senator and orthopedic surgeon. In response to a mandatory payment program for joint replacements last September, for example, Price charged that the CMS innovation center was "experimenting with Americans health."

In his January 17 confirmation, Price said he was a "strong supporter of innovation," but said he believed the CMS innovation center "has gotten a bit off track."

TRUMP SETS WHEELS IN MOTION ON DAY 1

President Trump has already signed an executive order directing the HHS to begin unraveling Obamacare. In the early hours of his presidency, Trump directed government agencies to freeze regulations and take steps to weaken the healthcare law.

The order directed departments to "waive, defer, grant exemptions from, or delay the implementation" of provisions that imposed fiscal burdens on states, companies or individuals. These moves were meant to minimize the costs and regulatory burdens imposed on states, private entities and individuals.

David Cutler, the Harvard health economist who helped the Obama Administration shape the ACA, said Price could do all sorts of things to undermine the law.

"If he wants to blow it up, he can," Cutler said in an email. But if they do, he added, "they alone will own the failure."

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How Republicans Can Hobble ObamaCare Even Without Repeal - Fox Business