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Minnesota Democrats strike a deal on rebate checks, credits and Social Security tax cuts

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Democrats struck a deal Wednesday on a $3 billion plan to send one-time tax rebate checks of $260 to 2.5 million Minnesotans, create a new tax credit they hope will slash childhood poverty rates and exempt many seniors from taxes on their Social Security income.

Local governments also will see a boost in aid to keep property taxes down and help cover public safety costs.

Not everyone will see a tax cut under the bill, and some corporations and wealthier Minnesotans will pay more.

“We had an extraordinary opportunity here to provide for children and families across the state,” DFL Senate Tax Chair Ann Rest said.

The deal, presented late Wednesday night, comes after months of negotiations among Democrats on how much to cut taxes — and who should benefit most — with a historic $17.5 billion budget surplus at their disposal. Republicans have been critical of the plan, pushing for more of the surplus to be devoted to tax cuts.

The final agreement on the one-time tax rebates is smaller than the $1,000 for individuals and $2,000 for married couples that Gov. Tim Walz pitched earlier this session.

Under the deal, single Minnesotans who make up to $75,000 a year can get a one-time refundable tax credit of $260, and $520 for married joint filers who make up to $150,000 a year. Families with children can get $260 more per child, up to three children, for a maximum of $1,300.

“It was a proposal we put forward, and we compromised in good faith on this. I’m glad Minnesotans are getting money back in their pocket,” Walz said. “It was a little smaller than we wanted, but there were other things that we got for that trade for children and families.”

DFL legislative negotiators included a version of the governor’s proposal to create a new child tax credit, which they estimate will cut childhood poverty in the state by nearly 25 percent. The new credit will provide families $1,750 per dependent, which will start phasing out at $35,000 in annual income for couples.

Meanwhile, couples earning up to $100,000 in annual income will be exempt from state tax on their Social Security income. Some Democrats campaigned on fully exempting that income from taxes.

Both the House and Senate DFL originally included a provision in their tax bills to require multinational corporations to report profits from subsidiaries, allowing Minnesota to collect taxes on those profits. But questions emerged about how much extra money the plan would raise for the state.

Democrats still raise roughly $1 billion in new revenue in the bill. Most of that money comes from conforming to a federal provision that taxes some profits from corporations with business overseas. Democrats also changed itemized deductions for higher-income earners.

Some renters and homeowners will see larger tax credits and refunds under the bill. Counties and local governments will each see an $80 million increase in aid, plus an additional one-time infusion of $300 million to help them cover public safety costs. Tribal nations will get $105 million in new aid over the next four years.

“That’s a transformational piece,” said House Tax Chair Aisha Gomez, who pushed for the tribal aid.

Republicans have criticized Democrats for removing an exemption for baby products such as strollers, car seats and cribs from the state’s sales tax.

“With an $18 billion surplus, you can shake a couch cushion around here to find $7 million to help growing families in the state of Minnesota,” said Sen. Julia Coleman, R-Chanhassen, who successfully added the exemption to the Senate tax bill only to see it removed later.

The final deal must still pass both the House and Senate before it can head to Walz for his signature.



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Trump expected to name Marco Rubio as secretary of state

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Trump has made his choice for a number of other national security roles. He has selected Rep. Michael Waltz, R-Fla., to be his national security adviser, and Rep. Elise Stefanik, R-N.Y., to be ambassador to the United Nations.

Rubio was first elected to the Senate in 2010 as part of a new generation of conservative Tea Party leaders. But some conservatives considered him wobbly on immigration, an issue that caused him political problems when he ran for the Republican presidential nomination in 2016 against Trump and others.

During that campaign, Trump belittled him as “Little Marco,” and Rubio responded with acerbic attacks.

But after Trump’s 2016 victory, Rubio went on to patch things up with him, serving as an informal foreign policy adviser and helping to prepare him for his first debate against Biden in 2020.

Under Florida law, Gov. Ron DeSantis can temporarily appoint a replacement to Rubio’s seat who will serve in the Senate until the next regularly scheduled general election is held. After last week’s elections, Republicans are set to hold at least 52 seats in the chamber.



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Speaker Mike Johnson says Republicans are “ready to deliver” on Trump’s agenda

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And while Johnson predicts next year will launch the ”most consequential” presidency and Congress in modern times, he has had difficulty this year leading Republicans who refused to go along with plans, forcing the speaker to often partner with Democratic Leader Hakeem Jeffries.

Johnson’s troubles stem in part from his slim majority, but that could persist if Trump continues to tap House Republicans to fill his administration. Trump has already asked Rep. Elise Stefanik, R-N.Y., to be ambassador to the United Nations and Rep. Mike Waltz, R-Fla., to be his national security adviser.

”We’re pretty much maxed out,” said Rep. Ronny Jackson, R-Texas. ”Everybody understands that.”

In the weeks ahead, Congress faces another deadline, Dec. 20, to fund the federal government or risk a shutdown, and conservatives are redoubling their pressure on Johnson not to cave on their demands to slash spending.

The House and Senate also will consider replenishing the Disaster Relief Fund to help provide aid in the aftermath of Hurricanes Helene and Milton.

And with President Joe Biden preparing to exit and Democrats relinquishing their hold on the Senate, there will be pressure to confirm more judicial nominees and to usher out the door any other bills that could possibly become law before Trump takes over.



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Judge set to rule on whether to scrap Trump’s conviction in hush money case

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The lawyer, Michael Cohen, fronted the money. He later recouped it through a series of payments that Trump’s company logged as legal expenses. Trump, by then in the White House, signed most of the checks himself.

Prosecutors said the designation was meant to cloak the true purpose of the payments and help cover up a broader effort to keep voters from hearing unflattering claims about the Republican during his first campaign.

Trump said that Cohen was legitimately paid for legal services, and that Daniels’ story was suppressed to avoid embarrassing Trump’s family, not to influence the electorate.

Trump was a private citizen — campaigning for president, but neither elected nor sworn in — when Cohen paid Daniels in October 2016. He was president when Cohen was reimbursed, and Cohen testified that they discussed the repayment arrangement in the Oval Office.

Trump has been fighting for months to overturn the verdict and could now seek to leverage his status as president-elect. Although he was tried as a private citizen, his forthcoming return to the White House could propel a court to step in and avoid the unprecedented spectacle of sentencing a former and future president.

While urging Merchan to nix the conviction, Trump also has been trying to move the case to federal court. Before the election, a federal judge repeatedly said no to the move, but Trump has appealed.



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