Flynn plea agreement marks huge step in Mueller investigation, as GOP struggles with tax bill

Michael Flynn’s plea agreement caught the White House and political Washington by surprise Friday, marking a huge step forward in the investigation being led by special counsel Robert S. Mueller III.

Ever since Flynn’s lawyers stopped sharing information with White House attorneys, just before Thanksgiving, it was clear that he was cooperating with Mueller’s prosecutors.

But the speed with which the special counsel reached a deal was striking, as was the public acknowledgment that Flynn had discussed his contacts with Russian Ambassador Sergey Kislyak with “a very senior member” of President Trump’s transition team.

I’m David Lauter, Washington bureau chief. Welcome to the Friday edition of our Essential Politics newsletter, in which we look at the events of the week in Washington and elsewhere in national politics and highlight some particularly insightful stories.

A FLYNN ON THE WALL

When George Papadopoulos pleaded guilty at the end of October, Trump allies could accurately dismiss him as a low-level advisor with limited ties to Trump. That’s not possible with Flynn, who was frequently at Trump’s side during the campaign, through the transition and into the first weeks of the president’s tenure in office.

With Flynn now cooperating, Mueller has a source who would have been inside key meetings and with access to other senior officials. The statement by federal District Judge Rudolph Contreras, who presided over Friday’s plea hearing, that Flynn had provided “substantial assistance for prosecution of another person” sent a clear, and very loud, message to his former colleagues.

The contrast between Flynn’s plea to a single count of making a false statement and the lengthy list of charges Mueller brought against former Trump campaign manager Paul Manafort sent a reinforcing signal: Cooperation brings leniency, holding out courts peril. Other people who have been interviewed by Mueller’s investigators, including Trump’s son-in-law and advisor Jared Kushner, have surely taken note.

POLITICAL RISK FROM THE TAX PLAN

Republican determination to push ahead on the tax bill, despite polls showing it to be broadly unpopular with voters, resembles one of those complex logic problems in which an act that helps most individuals in a group can still prove dangerous to the group as a whole.

For most Republican lawmakers, passage of a big tax cut is a must. They come from solidly Republican districts and states, their biggest political worry is a primary, and their core voters and donors demand action. For them, the fact that the bill gives most of its benefits to the well off is a feature, not a bug.

But the Republican majority, particularly in the House, relies on lawmakers who represent less solidly red places. They already face tremendous risk in next year’s midterm elections. For many of their constituents, the tax measure means an increase, not a cut. Passage could further endanger their ranks and perhaps give Democrats the majority.

Democrats faced a similar dilemma seven years ago when they voted to approve Obamacare despite its unpopularity. They gambled the law would become more popular over time — that happened, but only this year when Republicans tried to repeal it. In the meantime, their votes cost Democrats control of Congress.

Republicans may now be about to repeat that experience.

The tax bill has moved a long way from the project GOP tax writers had once planned.

The original idea was to cut the top corporate tax rate and offset the loss of revenue to the Treasury by what tax nerds call broadening the base — steps to raise taxes on industries that currently get special breaks. That concept had bipartisan appeal; the Obama administration also had proposed cutting the corporate tax rate.

Over the last few years, however, that plan repeatedly proved to be politically unfeasible: The companies that would have to pay more opposed it too strongly.

So GOP lawmakers and the Trump administration fell back on an alternative. They kept the big corporate tax-rate cut, but decided to pay for only part of it.

The resulting bill, which arrived at the Senate floor Thursday afternoon, is forecast to increase the federal deficit — the congressional Joint Committee on Taxation projects the red ink will spread by $1 trillion over the next 10 years, even after accounting for additional economic growth. To the extent that the bill does raise revenue, much of that comes from higher taxes on individuals and families.

The deficit projections caused a handful of GOP lawmakers, notably Sens. Bob Corker of Tennessee and Jeff Flake of Arizona, to balk on Thursday, delaying passage of the bill. On Friday, Flake said he would vote yes, all but guaranteeing Senate passage of the bill.

Politically, though, it’s the tax increases on families that are most likely to cause trouble for Republicans. The taxpayers who will be taking the biggest hit are upper-middle-class homeowners living in relatively costly coastal states, especially California, New York and New Jersey.

Republicans have more than a dozen lawmakers from suburban parts of those states who are at risk next year. Their constituents face a tax hike mostly because of the bill’s sharp, new limit on deductions for state and local income taxes, and they’re not likely to be happy about paying more, especially after Trump promised a bill that would cut taxes for everyone.

These California maps, showing the areas where the largest share of taxpayers take state and local tax deductions, show why some California Republicans are in jeopardy.

Meantime, as Noam Levey wrote, the Senate bill’s elimination of the Obamacare requirement that people buy health insurance could wreak havoc in some very red states by sharply raising insurance premiums.

Sen. Susan Collins (R-Maine) has tried to mitigate that problem. In return for her vote on the tax bill, she has insisted on Senate leaders’ agreement on separate legislation that would try to bolster insurance markets. Those bills have yet to pass, however, and even if they do, their effectiveness remains to be tested.

We will cover the vote on our Essential Washington blog. If you want the news to come to your phone on this vote, make sure you sign up for our Breaking News Alert.

TRAIN CRASH AHEAD

The tax debate has deflected attention from a big problem heading fast toward Capitol Hill: Government agencies face a shutdown in just over a week.

Congress has yet to pass the annual appropriations bills needed to fund government agencies. Lawmakers in September gave themselves until Dec. 8 to get the job done; they’ve barely started to negotiate.

Trump made the task harder this week by picking a new fight with Democratic leaders Sen. Chuck Schumer of New York and Rep. Nancy Pelosi of San Francisco. As Noah Bierman and Brian Bennett wrote, it was the latest example of how his erratic deal-making style has left lawmakers in both parties distrustful.

The year-end spending bill is likely to become a vehicle not only for the healthcare measures that Collins has pushed, but also for efforts to resolve the status of so-called Dreamers — young people who came to the U.S. illegally while children.

Negotiators hope Congress can pass a short-term extension next week to give themselves a chance to wrap up a bigger deal by Christmas Eve. But chances of success are iffy, and a Christmas-season government shutdown seems increasingly possible.

ALLEGED SEXUAL HARASSERS FACE CONSEQUENCES

Male lawmakers who have been accused of harassing female aides are suddenly starting to face consequences, both in Washington and Sacramento. But change is coming in fits and starts.

In Washington, Rep. John Conyers of Michigan, the longest-serving member of the House and a leader of the Congressional Black Caucus, faced increasing pressure to resign over sexual harassment allegations. Sen. Al Franken of Minnesota also continues to be in the spotlight, with an Ethics Committee investigation now underway.

In Sacramento, women who were harassed denounced a failing system for reporting sexual misconduct at the California capitol.

Cathy Decker looked at why the political system is so much slower than corporate America in firing alleged harassers. One key issue: Who’s supposed to do the firing, colleagues or voters? Michael Finnegan provides this helpful Q&A on how the congressional ethics process works, and why it’s so slow.

Meantime, both parties continue to watch Alabama’s Senate race, where Roy Moore, the Republican, has been accused by several women of misconduct against teenagers, including at least one alleged assault, when he was in his 30s. The election there is Dec. 12.

OTHER NOTABLE STORIES

Evan Halper writes that some industries that cheered Trump’s climate regulation rollbacks now worry the changes will go too far.

David Willman looked at Mueller’s record as a prosecutor, which shows surprising flaws.

Tom Steyer has gathered more than 3 million signatures to impeach Trump. Mark Barabak asks: So why are Democrats so annoyed?

Trump appears headed toward replacing Secretary of State Rex Tillerson with CIA chief Mike Pompeo. Tracy Wilkinson and Noah Bierman report the latest state of play.

Meantime, Trump is taking an unexpectedly active role in demanding options on moving the U.S. Embassy in Israel from Tel Aviv to Jerusalem.

Another poll shows Sen. Dianne Feinstein far ahead in her reelection bid.

And in the race for governor, former Los Angeles Mayor Antonio Villaraigosa chose the day before Thanksgiving to release details on his personal finances. His tax returns show that the man who left the mayor’s office “with no job, no house, no car” has made millions since. Seema Mehta and Patrick McGreevy explain how.

ALL THE PRESIDENT’S TWEETS

Twitter has long been Trump’s favored means of pushing his message. This week, it was his retweeting of a British far-right group’s anti-Muslim videos that drew condemnation. We’re compiling all of Trump’s tweets. It’s a great resource. Take a look.

LOGISTICS

That wraps up this week. My colleague Christina Bellantoni will be back Monday with the weekday edition of Essential Politics. Until then, keep track of all the developments in national politics and the Trump administration with our Essential Washington blog, at our Politics page and on Twitter @latimespolitics.

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David.lauter@latimes.com

@davidlauter