Happy Friday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL--Why the tax law failed to save the GOP majority: The biggest accomplishment for congressional Republicans -- passing a sweeping new tax law at the end of 2017 -- didn't end up saving the GOP majority in the House.
The economy wasn't the biggest issue of the midterms, according to exit polls, which found that a plurality of voters think the new tax law has not had any impact on their personal finances.
Democrats claimed victory on the issue, but Republicans are divided.
Some say the law helped prevent the GOP from losing even more seats because it boosted the economy, blaming other factors for the Democratic wave. Other GOP lawmakers, however, expressed concerns that a provision in the law hurt Republicans in high-tax states such as New York and New Jersey -- where the GOP ended up losing a total of six seats, with two races still uncalled.
The Hill's Naomi Jagoda unpacks the legacy of the tax law and its impact on the midterm elections here.
- Republicans did spend time on the campaign trail touting the tax cuts and arguing that Democrats would raise taxes if elected. But other issues, such as immigration, often featured more prominently in their campaigns.
- Health care was a bigger part of Democratic campaigns, though the two issues were linked to some extent, with Democrats often arguing that the tax law's increase in the debt would lead Republicans to pursue cuts in Medicare.
- Democrats ended up gaining more than 30 House seats. These gains involved defeating four Republicans on the Ways and Means Committee and flipping a number of seats in high-tax states such as New York, New Jersey, California and Illinois.
- "Certainly, I think it would have been better if we had complete deductibility of SALT," said Rep. Leonard LanceLeonard LanceKean Jr. to run against Malinowski: report Thomas Kean wins GOP primary to take on Rep. Tom Malinowski Gun debate to shape 2020 races MORE (R-N.J.), who voted against the tax law because of its limits on deductions for state and local taxes. Lance lost his race for reelection.
- The affluent districts that contain many voters who claim the state and local tax deduction also are areas where Trump was unpopular, and some strategists see the overall displeasure at the president as a bigger reason why these districts went for Democrats.
LEADING THE DAY
Harris tax credit would help low, middle-income families at cost of $3T: A new tax credit proposed by Sen. Kamala HarrisKamala HarrisTlaib blasts Biden judicial nominee whose firm sued environmental lawyer These Senate seats are up for election in 2022 Trump by the numbers: 2024 isn't simple MORE (D-Calif.) would primarily help low- and middle-income households but would reduce federal revenue by almost $3 trillion over the next decade, according to an analysis from the Urban-Brookings Tax Policy Center (TPC) released this week.
"Harris' bill is extremely ambitious and, in many ways, an improvement over the today's [earned income tax credit]," Howard Gleckman, a senior fellow at TPC, wrote. "But it also would be very expensive at a time when next year's budget deficit is expected to top $1 trillion."
Harris, a possible 2020 Democratic presidential candidate, rolled out legislation last month that would create a new refundable tax credit of up for low- and middle-income families. Naomi Jagoda breaks it down here.
Facebook reeling after damning NYT report: Facebook is being hit with fresh criticism from Capitol Hill as lawmakers reacted harshly Thursday to a New York Times investigation that detailed the company's efforts to wield influence in Washington after becoming aware of Russia-linked activity on its platform during the 2016 presidential campaign.
The explosive article laid out how Facebook's leadership was reluctant to confront the Russian efforts on its platform and was unprepared for the subsequent firestorm and fallout, which involved the Cambridge Analytica scandal.
"It's alarming, it's appalling," Sen. Brian SchatzBrian Emanuel SchatzThese Senate seats are up for election in 2022 Overnight Energy & Environment — Starting from 'scratch' on climate, spending bill Eight senators ask Biden to reverse course on Trump-era solar tariffs MORE (D-Hawaii) told The Hill. "It shows that they were not behaving like a neutral platform. It shows that they were engaged in information operations. That they have engaged in a strategy to avoid any oversight or regulations. This is what you get when an American corporation gets so big and is exempted from any meaningful oversight."
The Hill's Harper Neidig and Ali Breland tell us more about Facebook's latest controversy.
Graham set to take over Judiciary as Grassley takes Finance. Crapo staying at Banking: Sen. Lindsey GrahamLindsey Olin GrahamSenators introduce bill aimed at protecting Ukrainian civilians Kyrsten Sinema's courage, Washington hypocrisy and the politics of rage Hillicon Valley: Amazon's Alabama union fight — take two MORE (R-S.C.) is poised to become the chairman of the Senate Judiciary Committee after Sen. Chuck GrassleyChuck GrassleyThese Senate seats are up for election in 2022 Hillicon Valley — Senate panel advances major antitrust bill Senate panel advances bill blocking tech giants from favoring own products MORE (R-Iowa) announced Friday that he would step down to take over the chairmanship of the Finance Committee.
Grassley, who was fiercely criticized by Democrats for his handling of Kavanaugh's nomination, said he's looking forward to working on economic issues. He said he will focus on passing additional tax relief, expanding market access for farmers, manufacturers and service providers, and reforming health care.
Grassley's move also all but ensures that Sen. Mike CrapoMichael (Mike) Dean CrapoThese Senate seats are up for election in 2022 Alabama GOP gears up for fierce Senate primary clash Senate Republicans call on Biden to lift vaccine mandate for truckers crossing Canadian border MORE (R-Idaho) will remain chairman of the Senate Banking Committee.
Trump says China eager for trade deal: President TrumpDonald TrumpJudge rules Alaska governor unlawfully fired lawyer who criticized Trump Giuliani led fake electors plot: CNN Giuliani associate sentenced to a year in prison in campaign finance case MORE on Friday said "China wants to make a deal" with the U.S., but noted that any deal would have to be reciprocal.
"China wants to make a deal," the president told reporters Friday in the Oval Office. "They sent a list of things that they're willing to do, which was a large list," he added, referencing a list of items on which China said it was willing to compromise.
"I think we'll have a deal. We'll find out very soon," he continued. "We have to have reciprocal trade. We can't have trade that's meant for stupid people, and that's the way they took advantage of our country."
Context: Trump's comments on Friday come one day after China's Commerce Ministry said the country had resumed trade talks with Washington.
NEXT WEEK'S NEWS, NOW
- Congress will be out next week for Thanksgiving, but the Senate is expected to confirm Kathy Kraninger to be director of the Consumer Financial Protection Bureau soon after lawmakers return. Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThese Senate seats are up for election in 2022 WATCH: The Hill recaps the top stories of the week Effort to overhaul archaic election law wins new momentum MORE set up a procedural vote on her nomination Thursday, but it's unclear when the Senate will formally confirm her.
GOOD TO KNOW
- Two senators are pushing a new bipartisan bill to crack down on illegal robocall scams, raising the maximum civil fine for violators to $10,000 per call.
- Rep. Larry BucshonLarry Dean BucshonThe Hill's Morning Report - Presented by Uber - Senate debt limit drama ends; Trump legal troubles rise Maternal and child health legislation must be prioritized now Peanut Butter and Jelly make debut ahead of White House turkey pardon MORE (R-Ind.) on Friday criticized a drug pricing proposal President Trump made last month, marking some of the first public resistance to the move from congressional Republicans.
- Congress is looking to provide emergency disaster funding to California as wildfires have left 60 people dead and rising, but members say it will take some time.
- White House budget director and acting CFPB Director Mick MulvaneyMick MulvaneyTrump's relocation of the Bureau of Land Management was part of a familiar Republican playbook Jan. 6 committee issues latest round of subpoenas for rally organizers The Hill's Morning Report - Presented by Alibaba - To vote or not? Pelosi faces infrastructure decision MORE is openly angling to replace Wilbur RossWilbur Louis RossMomentum builds to prohibit lawmakers from trading stocks Census memo notes 'unprecedented' Trump administration meddling: report Holding defiant Trump witnesses to account, Jan. 6 committee carries out Congress's constitutional role MORE as Commerce secretary, according to Politico.
- Britain's top manufacturers are working on backup plans as they brace themselves for a hard Brexit, despite Theresa May's draft withdrawal agreement from the EU, reports the Financial Times.
- The Federal Reserve is close to the point of being "neutral" on interest rates and should predicate further increases on economic data, the central bank's vice chairman Richard Clarida told CNBC Friday.
ODDS AND ENDS
- T-Mobile predicted that its $26 billion merger with Sprint could close as early as the first quarter of next year, despite significant opposition to the deal from consumer and labor groups.
- Kansas Gov.-elect Laura Kelly (D) said she believes the state will expand Medicaid next year and will put together a proposal to do so.
RECAP THE WEEK WITH ON THE MONEY
- Monday: Funding fight to dominate dramatic lame duck | Trump blames Dems for stock slide | Trump hits Comcast after antitrust complaint | Officials reportedly moving closer to imposing auto tariffs
- Tuesday: Amazon taps New York, Northern Virginia for new offices | What it means for the DC area | Dems target vulnerable commerce chief | Earmarks look to be making a comeback
- Wednesday: Trump, Senate leaders to huddle on border wall funding | Fed bank regulator walks tightrope on Dodd-Frank | Koch-backed groups blast incentives for corporations after Amazon deal
- Thursday: Senior GOP senator warns Trump against shutdown | Treasury sanctions 17 Saudis over Khashoggi killing | HQ2 deal brings new scrutiny on Amazon | Senate confirms Bowman to Fed board