Celebration and Panic

Election Impact:  In addition to winning the Virginia Governor, Lt Governor and Attorney General races, there is a chance that when final results are in Democrats will also gain control of the Commonwealth’s House of Delegates.  As of now they’ve won fifteen seats, with four additional races so close that they are subject to a recount.  If Democrats win two of those seats they will gain control of the Virginia house.  Regardless of the outcome, the make-up of the legislature will be dramatically changed. Those fifteen seats were all held by white men, eleven of their replacements are women, including the first Latina and the first transgender delegate and one of the new men, who lost his newscaster fiancée when she was shot while broadcasting, is a staunch gun control advocate.   Notably, at 9%, Governor-elect Northam’s margin of victory was larger than Clinton’s 5% presidential margin and larger than previous Democratic governors’ margins of victory.  He also won 51% of the  “educated white” vote, breaking through what had been perceived to be a 45% ceiling for Democratic candidates. Gillespie, who had previously run for senator against current US Senator Mark Warner had only lost that 2014 election by fewer than 1% of the vote.  For Virginians, the changing house makes it more likely that Governor-elect Northam will be able to enroll his state in the Obamacare Medicaid Expansion, prior efforts by outgoing Governor McAuliffe had been voted down by the previously Republican dominated legislature.  For his part, expect to see more of the ambitious, popular McAuliffe, leaving Virginia’s leadership on a high note, he is likely to throw his hat into the Democratic presidential ring.  Tuesday’s elections are having an impact far outside of Virginia. The perception now is that Republicans have a serious problem in suburbia, with white, educated independents and more moderate Republican voters fleeing the Trump bandwagon.  As a result congressmen from districts that Hillary won in 2016 are sweating bullets.  Despite their fears, Trump and his nefarious Mr. Outside, Steve Bannon, remain confident that Trump is not the problem, in fact Bannon insists that he is the solution. Just forty-eight hours before Tuesday’s election Bannon had insisted that because he was embracing the Trump philosophy, Virginia’s Republican Governor wannabee Gillespie was surging to victory but once the results were in Bannon quickly changed his tune, alleging that Gillespie lost because he wasn’t all-in on Trump or his agenda.  In Maine, a disgruntled Governor LePage is threatening to block the Medicaid Expansion that his state’s voters passed overwhelmingly because “it will just give able bodied people free health care,” implying that they should just get off their duffs and work harder if they want to see a doctor.  Le Page may have to get off his duff, his state legislators are ready to allocate funding to pay the state’s share of the largely federally funded costs associated with the expansion with or without his help.

Taxes Anyone:  The election results are likely to complicate tax reform legislation, as Republican members of Congress from blue states and other vulnerable districts feel more heat.  California’s Representative Darrell Issa has already announced that he will vote “no” on the current plan, saying “we can do better,” by which he means if I vote for this, I am toast.  Long Island Congressmen Lee Zeldin and Peter King are with him, they are both in the “no” camp as long as state and local taxes remain non-deductible. Despite House Speaker Ryan’s desperate exhortation that Tuesday’s election results mean that “we have to get something done,” the pragmatic King said that he can’t go back to his district and brag about the success of passing tax reform if the result is that his constituents will see their taxes going up while corporations benefit.   As to tax plan specifics, the House has already modified their version, further ballooning the projected deficit by scaling back a corporate tax avoidance provision under pressure from their outside bosses the Koch Brothers. Feeling the pressure to move forward with tax legislation, even in the face of a declining voter base who cares little about corporate tax cuts and is growing increasingly skeptical that they will see much in the way of personal cuts, the Senate plans to unveil their plan this morning.  The Senate plan can’t provide for more than a $1.5 trillion deficit increase so it is expected to diverge from the House plan by not fully repealing the estate tax, eliminating all of the state and local tax deduction including the deduction for local real estate taxes,  and possibly changing a tax cut for unincorporated “pass-through” companies so it is more palatable to the small business lobby than the House legislation. As to those promised corporate cuts, to keep the deficit balloon more manageable, the Senate plan may call for them to be phased in.  So far the Obamacare individual mandate remains intact, but if it gets thrown into the tax legislation, Republicans will gain an additional $338 billion of deficit wiggle room, though 13 million would lose insurance and premiums would go up.  The fight is on, the bots are armed and even main stream TV stations will be flooded with pro and anti-tax reform ads.

Russia, Russia, Russia Plus:  Former Trump campaign manager and current Trump surrogate, Corey Lewandowski has had an epiphany.  He took some memory enhancing supplements and now remembers talking to Carter Page about his planned Russia trip. My guess is that the damning email trail is more responsible for his recollections that the snake oil.  The judge in the Paul Manafort case has issued a gag order in an effort to squelch Manafort’s lawyers and any witnesses from trying the case in public.  Unfortunately, in addition to having Federal pardon power, Trump is not subject to the gag order’s restrictions, so his tweeting will go on and we know how much he likes to tweet, he’s been tweet smacking from China off of a hopefully secure computer instead of his phone which Communications Director and Gal Friday Hope Hicks has hidden for the duration of his China stay.  Though his possible crimes aren’t necessarily Russia related, federal prosecutors have subpoenaed billionaire investor and former White House advisor Carl Icahn’s records.  They are looking into the role he played in advising the Trump administration on policies related to biofuels while he was making a killing in that market.  He’d “voluntarily” stepped down from his role when his not so proper investment activities came to light earlier in the year.  At that time the White House response had been that Icahn is a nice guy but all he did was carry coffee.

Good-bye Jim Acosta:   In what may be an effort to creep back into Trump’s good graces,  the Session’s led Justice Department has announced that they are subjecting the proposed ATT-Time Warner merger to added scrutiny.  They might “force” Time Warner to sell CNN before granting approval for the deal to go forward.  Though industry consolidation is a real concern, the Trump administration focus on CNN is being viewed with skeptical eyes and increasing concern that the push to force the divestment of CNN has far more to do with a dissatisfaction with their negative Trump coverage and CNN correspondent Jim Acosta’s annoying questions than real concern about industry consolidation.  Remember when Trump threatened NBC’s licenses, well NBC doesn’t have any licenses, so right now there is little Trump can do to thwart Rachel Maddow, but going after CNN is something he thinks he can do. For some reason, Trump’s Justice Department has no problem with conservative media conglomerate Sinclair Broadcasting buying up local stations but then again Sinclair features Boris Epshteyn, one of Trump’s alternative fact spewing cronies, on all its stations.  Trump’s team also has no problem with Nazi sympathizers so they must be very happy that former White House adviser Sebastian Gorka has just been hired by FOX News.  As to freedom of the press, Trump is only supportive if he or his friend Sean Hannity control the talking points.            

Travel Plans:  If you already have your tickets and your itinerary is set, you probably can continue with your plans to visit Cuba but going forward US citizens travel will once again be restricted.  Those very special art, cultural and religious group tours will still be okay as long as your travel organizer sticks to a list of permissible hotels and travel venues, those that benefit locals over the Cuban government.  The return to old restrictions may be payback for the hearing and other medical maladies that US Diplomats suffered possibly at the hands of the Cuban government but also possibly at the hands of one of those 400 pound guys sitting on a couch somewhere or some other nefarious group of people.  Alternatively the return to the old restrictions may be another attempt by Trump to sure up some of his dwindling base, with all of those Puerto Ricans moving onto Florida’s voter rolls, he needs to make sure that Florida’s old guard Cubans remain on the Trump team.  Earlier in the week, the Department of Homeland Security told 5000 Nicaraguans, beneficiaries of the Temporary Protected Status Program, who have lived in the US for upwards of two decades to start packing their bags, their protected status has been revoked. They’ve been given twelve months to leave. Another notable Trump accomplishment?