What’s Up with Chairman Richard Neal and Trump’s Taxes?

House Ways and Means Committee Chairman Kevin Brady, R-Texas, left, joined by Rep. Richard Neal, D-Mass., the ranking member, and Rep. Sander Levin, D-Mich., offers his manager's amendment as the GOP tax bill debate enters the final stage, on Capitol Hill in Washington, Thursday, Nov. 9, 2017.  (AP Photo/J. Scott Applewhite)
House Ways and Means Committee Chairman Kevin Brady, R-Texas, left, joined by Rep. Richard Neal, D-Mass., the ranking member, and Rep. Sander Levin, D-Mich., offers his manager's amendment as the GOP tax bill debate ... House Ways and Means Committee Chairman Kevin Brady, R-Texas, left, joined by Rep. Richard Neal, D-Mass., the ranking member, and Rep. Sander Levin, D-Mich., offers his manager's amendment as the GOP tax bill debate enters the final stage, on Capitol Hill in Washington, Thursday, Nov. 9, 2017. (AP Photo/J. Scott Applewhite) MORE LESS
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June 6, 2019 11:15 am
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In recent days we’ve been talking about the pace and strategy of Democratic investigations of President Trump. Impeach or not to impeach has taken up a lot of the discussion. We’ve also discussed the need to dramatically up the pace and the aggressiveness of the push, quite apart from whether or not it’s labeled an impeachment inquiry. As I’ve been at pains to explain, when you have a recalcitrant, indeed a law-defying President, most of this quickly ends up in the courts. There the logic of legal strategy usually fits at best uneasily with the logic of politics. No one’s going to be satisfied with the pace. Keeping the substance and the optics and the strategy in alignment is a complicated task.

As a general matter I’ve assumed, I think accurately, that people’s aims are on the up and up whatever disagreements there may be about strategy. But just in the last few days I’ve started to wonder about Rep. Richard Neal (D), dean of the Massachusetts delegation and Chairman of the House Ways and Means Committee. That’s the tax writing committee which is normally of most concern to policy wonks and corporate lobbyists. But in our Trump corruption moment it’s a position with unique hold over the question of getting the President’s tax returns.

A couple months ago I talked to some senior ex-congressional staff lawyers who told me that the seeming delay in the initial request for the returns made sense. As one put it to me, 2/3 of the delay was carefully putting in place the best facts for a successful legal strategy – since a court fight was a given – and a third was just being low energy, too little sense of urgency. But there was a clear and valid legal strategy, and my understanding was that the guiding hand was House General Counsel of the House, Douglas N. Letter. Pelosi appointed him in December after a 40 year run at the Department of Justice where his last job was Director of the Civil Division Appellate Staff. So just who you’d want in the position, given what this Congress is dealing with.

But just in recent days I’ve been hearing chatter that Neal is slow rolling the taxes push in the hopes of getting Republican buy-in and Trump’s signature for a retirement bill (the Secure Act) he’s pushing that would allow people to partially convert 401ks into annuities. Much of the retirement security debate for the last half century focuses on the slow move from defined benefit pensions (traditional pensions) to defined contribution systems (401ks, etc.), which is generally good for companies reducing financial liabilities and bad for workers looking for retirement security.

I don’t know the specifics of this bill but it’s generally considered a truism that no one ever recommends people purchase annuities unless the recommender has some financial incentive to do so. That’s a bit of an overstatement. But even when they work right they’re generally not the best deal for the purchaser. A journalist friend who follows money in politics and the financial services industry closely told me this morning: “It’s already passed the House almost unanimously, but it’s hit some snags in the Senate. It seems largely unobjectionable, but I’m sure if I took time to scrutinize it, I’d be horrified.” David Dayen says it’s generally inoffensive and includes some genuinely good things but says it’s the annuity part of it, which is at best iffy, that has provided the fuel for passage. The issue is the often exorbitant fees and the lack of protections if the annuity company goes under and leaves you with nothing.

The alleged connection between the Secure Act and Trump’s taxes has made its way into the press here and there. Dayen himself raised it a few weeks ago in this article. I’ve been poking around to see if there’s any there there on this. It seems impossible to know.

There may have or may be some slowing things down. If you’re trying to ensure a Presidential signature on a bill it’s certainly not going to be helpful to push too aggressively for something the President seems to genuinely see as an existential threat. On the other hand, people who know legal strategy don’t seem to find much fault in the legal strategy they’re pursuing. Neal’s gotten grief in the last couple days because he doesn’t seem to want to take New York State up on its offer of Trump’s state tax returns. The supposed reason is that doing so might make a federal judge more inclined to think the request for the federal taxes is based on bad faith and thus reject it. Again, though, people who know the law seem to think this is a legitimate concern.

What I think we can conclude is this. Neal is an old school Rep. The culture of the Ways and Means committee is itself definitely old school and backslapping in nature. A certain kind of member of Congress puts in the time to become Ways and Means Chair. You do it because you’re really into writing tax laws, not because you’re into conducting investigations. Neal is very much playing the standard strategy of raking in huge sums of campaign money from all the special interests that have issues before his committee – which is basically to say everyone in corporate America. So Trump’s taxes almost certainly isn’t his biggest focus. And getting too high profile on it must be in at least some conflict with what he’s really focused on, which is raising campaign dollars and trying to pass some legislation, whether it’s good legislation or bad.

I don’t see any good reason or any substantial evidence he’s slow rolling anything, as such. But is he really dead set on this? It’s his biggest priority? Probably not. Is every day that goes by without progress eating at him? Well, of course not.

I don’t think Jerry Nadler or Elijah Cummings need to be pushed. Scratch that. They need to be pushed too. But that’s not because investigations aren’t their biggest priority. They are. They definitely are. The problem I think is not getting that the current moment requires something different from the normal pace of conducting oversight. They also need to get that this isn’t a process contained within the unique processes and literal and figurative back hallways of Congres. It’s a national political moment with all that requires in terms of battling for public opinion in addition an audience of one or two judges. It needs to go faster and be more public.

With Neal though, I think he needs to be pushed. A lot. Prying open the President’s business interests isn’t just a matter of seeing how much money he makes or seeing how much of his money comes from people in Russia. There’s the much bigger issue of how his business interests are playing into his conduct of the nation’s foreign policy (and domestic policy for that matter) and more generally what if any financial crimes sustain his family enterprise. It’s a big deal and I don’t think it’s Neal’s biggest priority. To make it that he’ll need a lot of pressure from the outside.

Could it be more? Sure. And if you know anything on that front – one way or another, please drop a line to let me know.

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