when he started he was 91. he said i don't have a lot of money but i have a lot of time and i can help out. >> i want to give a shout out to my 100 one-year-old grandfather. leland: we will see you tomorrow. jillian: goodbye, everyone. ♪ >> welcome to the journal editorial board, another big step forward in the republican effort to overhaul the tax code, the senate passing tax cuts and jobs act by a vote of 51-49 after a last-minute scramble to bring one republican holdout along, mitch mcconnell calling the early morning vote a great day for the country. >> 31 years since we have done comprehensive tax reform. we have an opportunity to make america more competitive, keep jobs from being shipped offshore

and provide substantial relief to the middle-class. >> joining the panel, wall street journal columnist and deputy editor dan hettinger, columnist and manhattan senior fellow jason riley and columnist, mary, 51, 52 votes, not always sure they were going to get them, what turned the tide in the end? >> using a seasonal metaphor, you heard of the christmas tree, there were four or five senators who were holding out and i think mitch mcconnell very masterfully addressed concerns of each of them by giving them small presence to put under the tree or on the tree so you have susan collins, who gets her $10,000 property deduction, property tax deduction, medical expense deduction increase, ron johnson

really wanted something better. paul: senator from wisconsin. >> for small businesses. and a quite generous deduction for businesses. each of those things were enough to bring 51 senators on board. leland: paul: not pretty, let's be honest. buying of votes with policy. why did this succeed where the effort on healthcare failed? >> the sort answer is this succeeded because of the effort on healthcare failed. paul: quiet desperation? >> this was the republican party on the brink. the possibility of failure on the tax reform bill was unthinkable. this party washed up, failed on these two pieces of legislation,

and the dire predictions have diminished because they passed this, and going into 2018 looking a lot stronger than they did a month ago. >> one of the most important things mitch mcconnell a compost was preserving the best parts of the reform, the corporate side of this. >> 20% corporate rate down -- a year ago would you have believed they got a 20% corporate rate? >> i would not. to water down, and mike lee putting in an expensive tax credit, nothing for growth and what is worse, to water down the corporate tax rate reduction to get those freebies away. it is impressive what mitch mcconnell said we would do and republicans will show that they can govern, and have something

to run on. paul: what are the perils going ahead? it will go back to both parties, final bill for a vote. what are the big risks here. >> the good news is a number of provisions, the same in the senate and house bill like 20% corporate rate. what you have differences on, when some tax breaks sunset, when they expire the senate had to sunset a number of them because of the rules to get this through. that makes it easier because they are bound by senate rules, the house has to swallow a little bit of that but there are other things, the house version, four tax brackets, and state and

local income tax deductions, to increase that, and income for small businesses, the senate version is more generous. they got things to work through, the sense of palpable relief is a good sign that people feel this would be an easier lift that initial bills. >> the estate tax repeal, the house repealed totally, compromising on doubling the exemption from 5 $.5 million to $11 million but it won't be revealed. >> that is an important conversation to have because this whole tax reform is about getting capital into the market. there are too many people on the republican side who keep talking

in terms of jobs and middle-class tax cuts. >> we want jobs. >> it is fine. we want jobs with free-trade too but what you do when you do this tax cut and deploy capital in the market is create wealth. you don't know how that wealth is going to be allocated in the market after that. the messaging from republicans has to be this is about making the country wealthier. >> the worst part of the bill is some of the provisions, susan collins such as medical deduction, things like that but we call this cats and dogs, this is the way tax bills get done and you got to do these things to get the best parts of the bill and so far they -- >> the worst part is the -- $1 million mortgage deduction.

that is scandalous. paul: the house cut to to half $1 million, don't know if that will stay. democrats pull out all stops to block the gop tax overhaul from reaching donald trump's desk by year's end, we will look at the biggest criticisms being offered by tax-cut opponents next. investor in infrastructure, we don't just help power the american dream. we're part of it. when food is good and clean and real, it's ok to crave. and with panera catering, there's more to go around. panera. food as it should be.

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>> tax bill will balloon the deficit by $1.5 trillion. >> we have a bill that raises the deficit by $1.4 trillion. >> the nonpartisan congressional budget office says this attack on $1.4 trillion to the debt in the next we 10 years. leland: democrats voicing concerns the republican tax form plan will both the budget and

add to the federal debt, one of the talking points the left is using in its effort to block republicans from getting a bill on donald trump's desk by christmas. earlier i spoke with tax foundation president scott hives about the argument against tax reform. >> let's take these issues one by one. first, the joint tax committee's report, dynamic analysis that said it is going to increase the tax reform, increase the economy by a minor amount, 0.8%, that would only get back one third of this $1.4 trillion. what do you think of that? >> the good news is the official scorekeepers on capitol hill say this is a progrowth tax bill that will generate additional economy and revenues but i think they were conservative in their estimates and when we use our tax foundation model we find the bill is far more pro-growth and delivers far more revenue to bring down the cost of the plan.

>> reporter: your argument, that would raise your model, raising more than $1 trillion quite comfortably. what is the biggest difference between the assumptions in your model and assumptions in a joint tax committee? >> the joint committee uses a closed economy model assuming the united states the closed economy so anytime the government runs deficits that crowd out private borrowing, raises interest rates and adds to the borrowing costs and slows the economy. we have an open economy model assuming global capital markets won't be affected by a little bit of additional government borrowing which is why our models prove a lot more growth. paul: what about the argument of the deficit that it will increase the deficit by that amount, in the growth estimate which i understand the closed economy model, a crucial point you make but what about the

growth impact of cutting the corporate rate like the bill proposes, expensing immediately at 100%, you have more growth credits and other models. >> we think capital matters and taxes on capital matters the most, the most sensitive factor in the economy because it is so mobile, when you lower the cost of capital you increase the amount of investment in the economy raising productivity, wages, living standards, all good for economic growth so those are the most positive aspects of the bill. they are the least politically popular but the most progrowth elements. leland: who wants to give a tax break to corporations? on the other hand if you get the economy growing everybody will benefit from the growth that follows it. one of the other complaints you hear from the democrats is equity and distribution, this

is, in its tax cut for corporations and pass-through businesses a tax cut for the rich. as you look at the distribution table is that accurate? >> we have to understand the us tax code is extremely progressive already, the top 1% of taxpayers pays a greater share of the tax burden than the bottom 90% combined. over the years congress has passed these child tax credits and other tax credits that have knocked millions of people off of tax rolls at the bottom so the only people of paying taxes are the wealthy. almost by definition anytime you try to cut taxes across the board to some extent it will benefit the rich. paul: i am getting emails from people i know in illinois and california and new york and i hear them saying my taxes are going up under these bills because they are getting rid of the state and local tax deduction. these are relatively well-off upper-middle-class taxpayers but

most of them are republican voters and they are saying are my taxes are going to go up after this bill because there's no real cut, no cut at all in the top rate income tax rate in the house bill, only a one percentage point cut in the senate tax bill so they say i am going to pay hundreds, tens of thousands of dollars more on income. that sound plausible to you? >> it is possible. if you live in a high tax area with high property taxes and the state with high income taxes, you may pay more and in an odd sort of way, these plans make the tax code even more progressive which is funny to hear democrats complain about this being a tax cut for the rich when eliminating state and local tax deduction is one of the more progressive tax plans you can do. paul: it belies the this is a

tax-cut for the donor class, republican donors, they are the ones complaining about it at least that i hear. >> i know, that caused consternation in the republican caucus especially for republicans that are in blue states but those are very isolated cases. the vast majority of people will get a tax-cut, they aren't affected by state and local tax deduction and will be beneficiaries at the end of the day. paul: net on net, all things considered, you think good corporate reform, much less high-quality individual reform. >> this is a progrowth tax plan. the corporate cuts are the most import elements, they will make the economy grow in the us more competitive, that is the key at the end of the day. paul: pleasure to have you here. still ahead for a trump national security adviser michael flynn pleading guilty friday to lying to the fbi. what it means for the president

and his administration when we come back.

paul: donald trump's former national security advisor, michelson, pleads guilty to lying to the fbi about a conversation with russian ambassador, disclosed he is cooperating with special counsel's office as highest-ranking current or former white house official to be caught up so far. donald trump tweeting earlier, quote, i had to fire general thing because he lied to the vice president, he pled guilty, it is a shame because during his actions in the transition were lawful, there was nothing to

hide. we are back with dan henninger, jason riley, and kim. why did he turn. >> there would be several reasons for it. the central issue of collusion, i suspect mike flynn was essentially broke, very expensive to defend yourself against a federal prosecutor, been in the military his whole life and ran out of money. secondly it looks like he did lie to the fbi, that is a felony and for whatever reason he said these things to the fbi that remains a history. there may have been other problems for mike flynn like relationships with the turkish government, the work he had done. larger charges and his son who was working in the company as well could have been a target of mister mueller and part of the deal may have been he got his son set aside in all this so my clinton had a distinguished

career as a public servant for 30 years and now he faces the prospect of going to prison for 6 months. paul: james comey, former fbi director told the house intelligence committee in march that his agents decided general flynn had not lied about those meetings and yet now the fbi is saying he did. do you know what changed? >> that is what makes this very interesting. what they are saying he lied about is the nature of the conversations he had with the former ambassador and whether he had a follow-up call. when fbi agents interviewed him, there was reporting at the time and james comey in a private briefing to the house intelligence committee said his agent did not believe flynn was lying. he had forgotten these conversations, what was discussed so the fact this is changing makes a strong case that he's trying to cut a deal

to forestall being hit with larger charges, there's a question whether he did lie or not. paul: it is clear he is being held to basically provide information going up the chain. >> looks like mueller is methodically going about this, he has flipped someone close to trump's inner circle and doesn't look like he is anywhere near done with this. this is not a big development. paul: jared kushner, the president's son-in-law, the senior transition official cited in the court document as somebody who talked to flynn when he was talking to the russians. seems like he is targeting kushner for some kind of similar charge. >> the idea that he flipped as if he committed a crime and is

having to confess to it he was talking to the russians during the transition. there's nothing wrong with that, he shouldn't have lied about it but -- paul: it will be a crime on the record. >> it all happened during the transition so completely fine what he did and the idea that they will smoke out kushner because they were planning on how to deal with the russians once donald trump got into office doesn't seem like there's much there. paul: this happened after the election, this is about things that happened in the transition. as our colleague jenkins put it he lied about a non-crime. >> let's keep something in my, lying to the fbi is a crime, a prosecutor can indict you. robert mueller's mandate from

rod rosenstein is not simply to look at collusion which is not a crime but to find evidence that federal crimes were committed. a lot of what we have been talking about -- paul: i understand that but supposed to be about the collusion, the trump administration working with the russians to defeat hillary clinton. >> during the campaign. paul: what evidence do we have that that happened? >> we have no evidence. what we know is we think mueller had something bigger and that was the threat. unless you come to this and start talking, that is the concern if you are the white house and why he took this. paul: is there anything you see on the collusion front or during the campaign that shows in these

documents? >> absolutely not. if you want the cynical view, several experts point this out, what was the obama justice department doing interviewing flynn anyway. what he was doing, conversations were entirely legal. moreover highly likely, we can assume the russian ambassador was being monitored by intelligence agencies so they knew the contents of these conversations. if you want to be cynical you can suggest they were going there for something like that. >> there may be something more he knows, we will find out but our job is too fast, when we come back sexual misconduct enveloping the media and hollywood now spreading to capitol hill was looking at how party leaders are responding next. ♪ because there are options. like an "unjection™". xeljanz xr. a once daily pill for adults with moderate to severe ra

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>> congressman conyers should be doing. 0 tolerance means consequences for everyone no matter how great the legacy, it is no license to harass or discriminate. paul: the sexual-harassment bonfire threatening to engulf capitol hill. that was nancy pelosi calling on john krohn years to resign amid multiple allegations of misconduct, the minority leader

calling on ruben keywin to step down after he harassed and aid during his 2016 command as more women come forward to accuse our franken of groping and unwanted kissing. a week ago or 10 days ago nancy pelosi was saying he was an icon who deserved due process, now she is saying he needs to resign. what changed? >> i think what changed his democrats have been caught up in the very words she used, 0-tolerance. that is what they have claimed all along needs to be the standard. as we talked about there are problems with that because you are convicting people before the facts come out, the ethics committee has done an investigation but given what that standard has been for them on campuses they felt they need to apply it uniformly to anyone accused of anything and this is where you end up, with calls for resignation. paul: make the tough situation.

if you are accused, if you settle something whatever the facts might be, you are a suspect and she's saying you are out. >> let's separate a case where someone is accusing a congressman and there is no process, in these cases where there was money paid to do a settlement. you can say nobody wanted to deal with it so they pay the money to move on but it is taxpayer money, whether it is local from the district or federal, is taxpayer money and something else that is disturbing which is some of these were serial, wasn't just a 1-time payment but a number of payments, you can just shut the whole thing up by paying a bunch of money and the problem continues. paul: there is a republican

involved, reportedly settled the sexual-harassment claim by his communications director, $84,000 out of house compliance. >> a senate candidate in alabama, roy moore was accused, the president of the united states has been accused, i think the public has become aware of the situation in congress, talk about what mary was saying, they are shocked at this process, so difficult for these women to come forward, payments can be made in secret and no one can know about them and a lot of the public is a this is outrageous, we want transparency. paul: let's bring in a group called the voters, take roy moore, everyone knows these accusations that he is close in the polls. if he wins, what difference do we owe voters to say you elected

him anyway? >> he is 5 or 6 points up in the polls and members of the senate said they would vote to recuse the seat of roy moore if elected by the people of alabama, there are competing interests here, people of alabama, the whole story, and some of these other people are abused, there is a process, the constitution says congress in both houses can expel a member by a two thirds vote. that happened, bob packwood of oregon in the 80s. after the ethics committee determined he harassed women and then resigned. him make the point. the senate ethics committee got to get involved in these cases so there are standards of proof before use an accusation should expel the person. paul: what you think of the question of the motives. >> without standards of proof you can't go around accusing

people. >> whether he is popular or not, and over a subordinate, to be dealt with, and -- >> speaking of popularity, democrats, chuck schumer, the leader of the democratic party, in the senate, and being popular and the donor class, how closely divided, what is happening to conyers has not happened to our franken. >> do you think our franken with the pressure on john conyers to resign, will grow? >> there needs to be a process in place like the senate ethics committee, and what our franken is accused of is different than what john conyers has been

accused of, not suggesting they should not be bad but the degree does matter. and 0-tolerance, and to get to the voters, in these settlements only to give voters more information about what happened. paul: you think this should be transparent, and what was paid out? >> the reform going to the house has good elements or bad elements, transparency is one we need to think about seriously. paul: north korea tests the longest range missile setting up alarms in washington and a close the global. some sega state department shakeup is in the works.

how will the trump administration respond? ♪

>> north korea launched an intercontinental ballistic missile. it went higher than any previous shot they have taken. it is a research and develop and effort on their part, building ballistic missiles that could threaten everywhere in the world. >> north korea testing a new intercontinental ballistic missile capable of hitting all of the continental united states. the launch was the first since september despite repeated warnings from donald trump who told reporters at the white house tuesday that the us will handle the situation, heightening tension with pyongyang with reports that secretary of state rex tillerson could exit the administration as early as january. anthony is a senior fellow at the translation for defense of

democracies. >> any doubt at all that this new missile they tested they have shown some photos since the launch, can reach the united states? >> north korea has been working on this long-range program since 1998. this is another step in the process. looks like the missile is larger than ones we have seen before, it can reach the united states. the question is whether the reentry vehicle which would have a nuclear weapon in it could survive reentry, they will do more tests to ensure that would happen. paul: they have to miniaturize the warhead and make sure of that as well. is there any doubt they will get there given the pace of their progress? >> the other thing to keep in mind, north korea showed that ballistic missiles in their parade that are larger than this

one. paul: rex tillerson called for more sanctions to come down on north korea here. do you think that is the answer, just press north korea with sanctions and other pressure? >> sanctions, pressure campaign, only 10 months of it, ten years of failed policies by republican and democratic administrations and now we are willing to give 10 months worth of robust sanctions. and a military option comes with several disadvantages, sanctions is the best one now, to give what leverage we can attain.

>> when we have had sanctions on north korea they haven't been the same kind of sanctions, severe sanctions that were against iran and also putting pressure on china and chinese firms that trade and do business with north korea. >> we are nowhere near, iran sanctions, and chinese banks, to aid north korea, and punished very severely for the iran sanctions program, and gone the furthest of any presidential administration target and nationals and companies, for additional banks and held back the sanctions issues they put

forward. they need to unleash the power of the treasury department to go after pyongyang and beijing. >> response to that, they lose the cooperation what they are promising. you have to make a judgment when the chinese are leading you want to string you along like some people think they have been for years and when you get cooperation. >> the chinese have been leading us on for a decade. at some point we have to smarten up and realize the chinese are always going to nibble around the edges and make a big deal about closing this bridge or targeting these north koreans, they will never go after their own nationals unless authorized to do so in the united states is the only one with the authority to force them to do that. paul: some have suggested including gus about redeploying tactical nuclear weapons to the

peninsula in the south not because we want to use them but as a demonstration of seriousness, you do anything here to us, this is the response you get. >> we can do that, it arguments the terms that much. and the nuclear triad that can launch a nuclear weapon against north korea. the disadvantages of doing that would feed into north korea's propaganda and outweigh the benefits of doing that. at this point we have to stay away from symbolic moves and move toward harsh sanctions and increasing military exercises would be one way to do that especially the interdiction phase where we talk about how to interdict north korean missiles, missile defense, would be more

practical on the defense side and not as symbolic. paul: good to have you here, thank you. when we come back, a not guilty verdict in the kate steinle murder case, reigniting the debate about thing to worry cities. a big issue in the midterm elections. it's what this country is made of. but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y, there's an us.

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paul: a san francisco jury found an illegal immigrant not guilty in the july 2015 death of kate steinle as he was acquitted of murder and involuntary manslaughter charges as well as assault with a deadly weapon.

donald trump who made cracking down on illegal immigration a cornerstone of his presidential campaign called the verdict disgraceful and promised the usual her democrats at the ballot box including, quote, the jury was not told the killer of kate was a 7-time felon. they are so weak on crime they will pay a big price in the 2018, and 2020 elections. we are back with dan hettinger, jason riley and kim stossel. explain this verdict to me. there were several charges she could have convicted him on but did convict him on any. >> a lot of americans are scratching their heads, the president characterizing this as outrageous. how can someone fire a firearm at someone and not be convicted of involuntary manslaughter. >> the defense that he cited accidentally and it ricocheted and hit kate shkreli -- steinle.

they must've but his story. >> perhaps they did. i don't understand how. they had several charges they could have brought, first-degree murder, secondary murder, involuntary manslaughter and didn't find any of them. ultimately sanctuary city politics are what killed kate steinle in addition to this man. paul: explain. >> it is outrageous, the policies these cities have in place to not cooperate with federal authorities when they request local authorities, until they get there. they have issues with this person. san francisco has a noncooperation policy in place and it remains in place today. if he were being held he would be released again. the state of california has mandated a state policy that moves more toward san francisco policy. >> the feds are not off the hook. they had him, his sixth

violation coming into the country illegally, they had him. instead of deporting him they sent him to san francisco to face a marijuana charge that was 20 years old and then san francisco let him go and california let him go but that was a mistake but what about the imf. >> it was the policy in place and it remains in place. >> it is a federal policy. >> he would be deported under the administration. paul: san francisco let him go, which is to say the san francisco jury made a political decision, this is nullification. if you cannot convict him for involuntary manslaughter the phrase has no meaning. >> you say that and it is politically motivated. >> the people of san francisco in a battle with donald trump as intense as trump's battle with the white house press corps over immigration. that is what jason is describing, not complying with

federal law, they go we are not convicting. paul: let's talk about the impact of this decision on the politics of immigration. for those of us for relatively of immigration and i am and i think you are too, this is a terrible verdict because a lot of people who look at this verdict say there you go, people who might be open to immigration say we can't enforce our borders because it keeps coming back and when we catch somebody we can't convict them if he convicts, - commits a crime. >> loses public sentiment. if we can't get rid of somebody like this guy, multiple felony convictions deported numerous times and just let out on the street, our system is broken and we can't afford, from a crime perspective, to do comprehensive immigration reform.

i don't think a lot of democrats are thrilled that san francisco is taking this stand because they are worried about public sentiment and on the wrong side of it. people like diane feinstein, california democratic senator complaining about san francisco policies. paul: i would speak up about this. if you want to deal on the dreamers why not speak up and say this is not right and not related to how we should think about immigration and we will enforce those laws and cooperate, you are likely to get an easier chance getting a consensus for legalizing the dreamers. >> this is a tragedy on so many levels. one of the big problems is it is going to be lumped in by people who don't like immigration. as an example of what happens when we have lax immigration policy where most immigrants are law-abiding contributors to the nation.

paul: we got this da ca debate later in the week. >> it will be there, democrats we use it as leverage but the leverages weakened as a result. paul: we have to take one more break. when we get back, hit and misses of the week. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor.

. .

paul: time now for hits and misses of the week, kim, start us off. >> well, paul, i don't want to spend a lot of time criticizing donald trump's team because there's so many hours in the day but we should make an exception when he causes international incidents when retweeting muslim videos when british prime minister theresa may attacked prime minister, the religious question is tough enough without him elevating it and undermining one of our biggest allies in the fight. paul: jason.

>> a fake story in washington post about story on roy moore, not only undermines serious journalized but trivial sexual assault and i'm glad they called him on it. paul: he we wanted to report a false story. dan: the transportation system that was going to recuse from the catholic archdioces. why? because washington metro said this might promote religion or religious belief. jesus and mary weren't in the ads. this is where happy holidays get you, i will tell you, paul, santa is next. paul: all right, thank you, dan you have your own hit or miss, be sure to tweet it us at jer

hit and miss. we hope to see you right here next week. ♪ >> president trump reacting to the news that his former national security adviser michael flynn has pleaded guilty to lying to the fbi amid a fundraising trip to new york city, trump appear to go down play the developments saying that aside from lying to the fbi flynn did nothing illegal. welcome to a brand-new hour inside america's news headquarters, i'm molly. kelly: molly, good to join you, i'm kelly wright. he's not concerned about flynn's guilty plea which requires him to cooperate with russian investigation. quote, i had to fire general flynn because he lied to the vice president and