December 22 was sent to the president s desk. President trump just signed the bill after yesterdays praising congress with congressional leaders. Many republicans worry the shortterm thanks could give the democrats leverage. We are on capitol hill with the latest. Is this because the spending bill to get all next up with the tax reform bill . Sahil it is unlikely. They have to operate separately. He cant but the spending bill the reconciliation because he goes through different process. The debate will get mixed up with the tax bill now that republicans have cleared some space to work on that while giving themselves just two more weeks to negotiate a government funding bill. They half to get a deal with have to get a deal with democrats on spending levels, nondefense spending and defense spending. There are a bunch of military hawks that want to raise the dollar forel without dollar increases in domestic discretionary spending, which democrats are demanding. Yes, republican said given themselves some space to pass the tax bill. David one of the ways that spending gets mixed up is through senator collins. You wrote a great piece where she thinks she has a deal and she will vote with the tax overhaul provided she gets some spending and the health care area. How could you for taxes unless he knows she gets that money on the spending side . Sahil she voted for the senate bill, she says believing she had a deal to include two Health Care Bills and whatever particular vehicle goes through this year. That will stabilize the obamacare markets after the repeal of the individual mandate. The problem is the deal only seems to be operable in the senate. The Senate Majority leader made a commitment to her. It probably can pass the senate for there is a vindication it can pass the house. Speaker ryan says openly he was not party to this deal and he is not signing off on it. It remains an open question. There is a lot of opposition to those bills in the house and the white house. I asked the white house yesterday and they did not commit the pushing for this. By the end of the year for senator collins, it was her vote in question for the final tax package when it comes back from conference committee. Shery when it comes to getting votes that will depend a lot on what happens at this date and local tax the reductions. Tax d edictions. There are some republican members who want to include income taxes. Most notably california House Republicans. Votedt three of them have for the house bill. That me 11 House Republicans voted for the house bill, for they want an expansion in the white house seems to be open to it. Gary cohn suggested on this network this morning and Republican Leaders in the house and senate are working on that. It looks like there could be a state and local income Tax Exemption added to the bill. Shery great to have you, thank you. Our National Political reporter on capitol hill. David lets get a check of were markets stand with julie hyman with the latest. Julie we have got stocks rally in the wake of this mornings jobs report. Major averages of higher. The nasdaq and the leadership position as we see strength and largecap technology. It is the dow and s p trading at records on the closing basis. The have not touched intraday highs. In one of the subgroups benefiting from the report if the temporary employment and staffing companies. They tend to move in tandem with the various job numbers. Manpower robert and trueblue are all trading higher. Just a refresher. Payroll is up 228,000 for november, better than estimated after a couple of disruptions in the prior months due to hurricane effects. We have been focusing on the average hourly earnings. They rose 2. 5 yearoveryear, less than had been estimated. If you look at the Economic Data it hasas of late, been surprising by a higher margin. That is the blue line, the economics of price index for the United States. In looks at how Economic Data has been doing relative to estimates. After underperforming estimates in the summer and going in the fall, it is catching back up with the s p 500. Interesting because they tend to move more together. There was a big gap. And now the numbers are starting to perform a little bit better relative to expectations. Nonperforming relative to expectations are the laggards. We have ups down. Not by much for the company did say in a tweet it was seeing struggle at his Delivery Centers because of the big influx of orders for the holidays. We have Pall Corporation falling. That has to do with an analyst call being cut the underweight from sector wait over keybank. They are setting valuations and fundamentals. Cooper company in the industrials. After mountingwn concerns, including a rise in andand market share gains it overshadowed its fourthquarter which was in line with estimates. Cocacola as well falling. It looks like this is linked to an analyst note. Cocacola remains a show me story and its growth targets are a little too aggressive. David thanks so much, julie. Shery settling this taking points. The republican tax bill is heading to conference. We talk with congressman Ryan Costello of pennsylvania about what should make it into the final bill. This is bloomberg. Shery this is Bloomberg Markets balance of power. David lets check it on first word news. Which ar we turn to mark crumpton. Mark arizona officials are trying to figure out with a hold a special election to take a midterm replacement republican congressman trent franks. He announced he will resign effective january 1 after revealing he discussed surrogate motherhood with female staffers. The vacancy is occurring more than six months before the next general election, arizona law requires the governor to schedule a special primary election and a special general election. Democrats are continued thats considering a plan that would limit the influence of socalled superdelegates at the next president ial primary. Most the new rules, superdelegates would have to tighter votes on the conventions first ballot. The compromise comes after allegations by supporters of vermont senator Bernie Sanders during the 2016 primaries the system was rigged. The legal battle over President Trumps travel been resumed today in virginia. Administration attorneys will ask a federal Appeals Panel to uphold the september 24 proclamation that restricted travel to the u. S. From six mostly muslim nations and blocked entry entirely from syria and north korea. The Supreme Court ruled monday the latest restrictions will remain in full effect of the appeals process plays out. U. K. Labour Party Leader Jeremy Corbyn says more clarity is needed concerning the announced breakthrough in brexit negotiations. He told reporters in geneva while progress may have been made, the brexit referendum was in 2016. Agreement should have been reached a long time ago. Is to determination maintain a trade relationship ush europe which will give access to a great many jobs of those sent the channel. Will maintain those jobs. Nobody voted in the referendum to lose their job. Mark todays announced breakthrough lets talk move on from the initial divorce terms to the crystal subject of writtens future britains future relations with a block. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. David the house and Senate Conferees are getting to work in reconciling the different versions of tax overhaul. The administration said it supports allowing deductions for either real estate or state and local taxes up to 10,000. Laid out his views in an interview on bloomberg earlier today. The house is concerned about their salt members, and about 70 salt members of the house. We are concerned about them. No one really wants tax increases here. What they are trying to do is say maybe we should expand the 10,000 deduction, not to just include real estate taxes but also include income taxes. The white house is fine with that. David we welcome a republican member of the House Committee on energy and commerce, representative Ryan Costello of pennsylvania. He joins us from pennsylvania. Good to have you. Rep. Costello good to be with you. David we want your best view on what we will end up with. Lets start with state and local tax provisions. Is this a done deal at this point . Basically it will be a 10,000 cap for either real estate taxes or state income taxes . Rep. Costello a combination of the two. I think that is where. David how do you pay for that . That will cost some money. Rep. Costello if you look at the house plan, the house plan is paid for. If you look at the senate plan, they are looking at repealing the individual mandate. When you do that, that opens up even more revenue. I think that is how you do it. Shery you are ok with repealing the individual mandate, although it could be stabilizing some sectors the Health Industry . Rep. Costello 80 of those who actually pay the penalty or the tax make less than 50,000 a year. , in the grand scheme the individual mandate operates as a tax on lower income americans. David you were in favor of repealing the individual mandate the matter what it does to the Health Insurance market market . Rep. Costello the way to stabilize the marketplace, more than anything else is to return csrs. Has an issue i have taken issue with with President Trump. i would like to see csrs returned. There is more we can do in creating flex ability in each state and how they operate the insurance marketplace, but the individual mandate is not the difference between stabilizing the marketplace or not. Back to your salt question, it is critical. You mentioned there are 70 districts or 70 members who are really looking very closely and making sure we do have the combination of state income tax the ability to deduct that in relation to tax reform. What you do is you marry that with the lower tax rates with a higher income thresholds for this tax rates. I think the overwhelming geordie of Hardworking Taxpayers and families will see a tax cut out of this, along with the projected Economic Growth on the business side of the plan. I do believe we will get to a place out of the contrary the process going right now where most of risk and say this is a good plan for our country and a good plan for growth. Shery we have a congressman from new jersey yesterday. They wanted a full inclusion of the salt deductions. Had he looked at their proposal or would you know if those are gaining momentum . Rep. Costello at this point in time, from a momentum perspective, this is was within the contrar conferee and the house and senate. Might goal is to see a tax plan that will facilitate more growth, create more jobs, with wages and at the same time provide a tax cut for middle income families. I believe the plan that comes out of the conference process will do that. The extent to which we are able to make sure, particularly in the northeast in california as well, those who are paying high state and local taxes, property taxes, income taxes have the ability to the duct deduct. That is something i take seriously and is critical to me ultimately supporting a bill. I have not looked at with josh and leonard i would have to speak with them more. I cant speak with specificity as to what they said earlier today. David everybody is for paying for growth. Everybody is for growth. What about the deficit . Are you concerned about the deficit, either from the tax plan for the infrastructure plan . Are your constituents worried about how much money we are borrowing and arguably putting on the backs of our children and grandchildren . Rep. Costello certainly. I think everybody should be concerned about deficit spending, which we have done for quite some time. As well as the debt which is now 20 trillion. I think this is my third year serving, every single year i think have tacked another 1 trillion onto the debt. This is projected. I would take issue with some of the scoring. This is projected at 1. 2 trillion over 10 years. That assumes lower Economic Growth that i think will happen. I believe larry kudlow earlier on your station was speaking about the fact that if you look created and00 jobs the 3. 3 gdp growth last quarter and look at what companies are looking to do with that capital, you can see some substantial investment in the year to come which will lift wages, tighten the labor market, which will require Company Security for employees. That natural weightlifting will be a net positive wage listing will be a net positive. That is how you create growth in this country. If you look at the growth projections relative to the tax plan, i would take issue with what the cbo did. The underestimate growth. You are talking about over a 10year projection. If we wanted to talk about the debt, i would look back at the governments spending spree that went on over the past 10 years. Give you look forward, im optimistic for the future of the country. Shery that is all the time we have now but thank you for joining us. Congressman Ryan Costello, republican of pennsylvania. In overnight breakthrough divorce talks between the u. K. In the eu after a month of haggling. With theresa mays concessions will mean going forward. Next. L talk about that this is bloomberg. David this is Bloomberg Markets balance of power. Shery now comes the hard part. The 45 billion deal was signed before dawn in brussels, finally clearing the way for a trade talks to begin between the u. K. In europe. The negotiations were mostly concessions on the part of may. What this means for the vote ahead. We are joined with jacob senior fellow at the Peterson Institute for economics in washington. That he for joining us. Can we say that this round was completely won by the eu . Yeah, this is a complete capitalization by the u. K. Government on pretty much all the main eu demands. Atimately the divorce bill the recommended to the eu wanted. If you look at details of the citizens rights, every eu citizen in the u. K. Will now law for rights under eu the duration of their lifetime, even if they remain in the u. K. In the Northern Irish issue. There, i think the real interesting thing is this agreement now is essentially making a soft brexit of full regulatory alignment for all the eu u. K. With the eu. The default option, meeting if there is no agreement on a future trade agreement, the outcome will be that the u. K. Becomes a bit like norway. Given that this is the eus preferred end state, the eu has zero incentive to actually negotiate a new Free Trade Agreement with the u. K. Brexitspects for a soft has gone up dramatically with this agreement. David this is such a soft brexit, i wonder if it is a brexit at all, except they dont get a seat at the table. They basically promised the republic of ireland there will be no border between republic of ireland and Northern Ireland. They promised the Northern Irish, because they are essential to theresa mays government there will be no border between Northern Ireland and the u. K. Theyre essentially will be no border between the u. K. Portray papers is in the eu. Can theresa may deliver this in her own party . Jacob there is no doubt this is what it means. This is a fake brexit in my opinion because it basically means the u. K. Becomes a rule an option taker, similar to norway. Can theresa may deliver this within her party . I think that is highly unlikely, or may not be the case. What i think is the case is that this deal is very close to where the labour party is on many of these issues. I dont think it is any doubt this is a deal that theresa may can carry with relative ease through the british parliament. Even if she loses the right wing of her own party. In that sense it is quite politically savvy of her, but it runs the risk ironically of having the same split in the conservative party going forward. Shery and theresa may is speaking about the impact on the economy and businesses. Take a listen. Millions of jobs that fit of jobs depend on the future trading relationship we will determine. I am optimistic about discussions ahead. In the meantime, reaching this agreement now ensures businesses will be of to make Investment Decisions based on an implementation period that offers welcome certainty. Shery what does a fake brexit me for these companies . Mean for these companies . Jacob the status quo more or less will continue. Certainly it will continue through the transition period which is currently, inked in to last until the end of 2020. In the event there is a trade agreement on the future relationship, that transition period could be extended. The key thing here is that the agreement on Northern Ireland whate default option happens is if there is no trade agreement, full regulatory alignment between all of the u. K. And the eu continues. The said, incentivewise, eu has no incentive to strike a deal. Nor does u. K. Businesses because they prefer the status quo. Shery jacob, thank you for joining us. Jacob kirkegaard, senior fellow at the Peterson Institute for International Economics joining us from washington. David it would be ironic if britain has gone through all of this and put a lot of this through this for a fake brexit. Never mind. We are not really leaving. Shery with the eu leading negotiations. David u. S. Labor market maintained steady growth last month with congress on because of passing the taxcut. We will speak with chris lu, former labor secretary secretary. This is bloomberg. Is this a phone . Or a little inter