Congress expected to vote on budget to avert government shutdown

People walk by the U.S. Capitol building in Washington, U.S., February 8, 2018.

By Richard Cowan

WASHINGTON (Reuters) – The U.S. Senate and House of Representatives were expected to vote on a proposed budget deal on Thursday that would avert another government shutdown but that has angered fiscal conservatives who complain it would lead to a $1 trillion deficit.

The plan to keep the government operating and to increase spending over the next two years faced resistance from conservatives in the Republican Party, who favor less spending on domestic government programs. At the same time, many liberal Democrats wanted to withhold their support as leverage to win concessions on immigration policy.

That meant the bill’s passage was not assured in the House and would need some Democratic support. House Speaker Paul Ryan, a Republican who has backed the agreement, said on Thursday he believed the chamber will pass the budget deal.

“I think we will,” Ryan told radio host Hugh Hewitt. “This is a bipartisan bill. It’s going to need bipartisan support. We are going to deliver our share of support.”

Mark Meadows, chairman of the conservative House Freedom Caucus, called the deal “eye-popping and eyebrow-raising.”

“We took an official position last night to say we can’t support this,” he told CNN on Thursday.

Republicans control both chambers of Congress.

The rare bipartisan deal reached by Senate leaders on Wednesday raises spending on military and domestic programs by almost $300 billion over the next two years.

It would allow for $165 billion in extra defense spending and $131 billion more for non-military programs, including health, infrastructure, disaster relief and efforts to tackle an opioid crisis in the country.

It would stave off a government shutdown before a Thursday night deadline and extend the federal government’s debt ceiling until March 2019, putting off for more than a year the risk of a debt default by the United States.


The agreement, backed by Republican President Donald Trump, disappointed conservative House Republicans and outside groups.

“It’s not like Republicans aren’t concerned about disaster relief, or Republicans aren’t concerned about funding community health centers or dealing with the opioid crisis,” U.S. Representative Warren Davidson, a Republican, said in an interview with National Public Radio.

“But when you add them all up, it adds to an awful lot of spending. … It’s not compassionate to bankrupt America.”

Liberal Democrats meanwhile opposed the deal because it does not include an agreement to protect from deportation hundreds of thousands of “Dreamers,” young people brought illegally to the United States as children.

House Democratic leader Nancy Pelosi on Wednesday staged an eight-hour speech on the House floor in support of immigration legislation, including reading letters from Dreamers pleading to be allowed to stay in the United States.

A number of lawmakers who supported the bill acknowledged the deal was not perfect. “It’s not pretty,” Republican U.S. Representative Adam Kinzinger said on CNN.

Democratic Senator Jon Tester said he hoped House Democrats would back the measure. “We don’t want the perfect to get in the road of the good,” he told the cable network.

Republican Senator Lindsey Graham said many lawmakers believe the defense spending in the bill was essential. “We’re going to get it through because most people will support it,” he told Fox News.

Senate Republicans planned a procedural vote on a stand-alone bill to increase military funding for the rest of the year to demonstrate support for Trump’s promised defense build-up.

Democrats will not support it because it does not contain similar spending increases for non-military programs. But the Senate’s failure to advance the bill will not damage the budget legislation, which is due for a vote later in the day.

White House adviser Kellyanne Conway told Fox News the agreement provides long-term certainty in the budget and funding for Trump priorities including infrastructure and military funding.

Failure to agree on spending led to a partial three-day shutdown of government agencies last month.

(Reporting by Makini Brice, Katanga Johnson, Doina Chiacu; Editing by Frances Kerry and Alistair Bell)

Saudi Arabia says it has seized over $100 billion in corruption purge

A view shows the Ritz-Carlton hotel's entrance gate in the diplomatic quarter of Riyadh, Saudi Arabia, January 30, 2018.

By Stephen Kalin and Katie Paul

RIYADH (Reuters) – Saudi Arabia’s government has arranged to seize more than $100 billion through financial settlements with businessmen and officials detained in its crackdown on corruption, the attorney general said on Tuesday.

The announcement appeared to represent a political victory for Crown Prince Mohammed bin Salman, who launched the purge last November and predicted at the time that it would net about $100 billion in settlements.

Dozens of top officials and businessmen were detained in the crackdown, many of them confined and interrogated at Riyadh’s opulent Ritz-Carlton Hotel.

Well over 100 detainees are believed to have been released.

Billionaire Prince Alwaleed bin Talal, owner of global investor Kingdom Holding, and Waleed al-Ibrahim, who controls influential regional broadcaster MBC, were freed last weekend.

“The estimated value of settlements currently stands at more than 400 billion riyals ($106 billion) represented in various types of assets, including real estate, commercial entities, securities, cash and other assets,” Sheikh Saud Al Mojeb said in a statement.

The huge sum, if it is successfully recovered, would be a big financial boost for the government, which has seen its finances strained by low oil prices. The state budget deficit this year is projected at 195 billion riyals.

In total, the investigation subpoenaed 381 people, some of whom testified or provided evidence, Mojeb said, adding that 56 people had not reached settlements and were still in custody, down from 95 early last week.

The government has generally declined to reveal details of the allegations against detainees or their settlements, making it impossible to be sure how much corruption has been punished or whether the $100 billion figure is realistic.

The only settlement disclosed so far was a deal by senior prince Miteb bin Abdullah to pay more than $1 billion, according to Saudi officials. Miteb was once seen as a leading contender for the throne, so his detention fueled suspicion among foreign diplomats there might be political motives behind the purge.

Although officials said both Prince Alwaleed and Ibrahim reached financial settlements after admitting unspecified “violations”, Prince Alwaleed continued to insist publicly he was innocent, while MBC said Ibrahim had been fully exonerated.

Economy minister Mohammed al-Tuwaijri told CNN this month that most assets seized in the purge were illiquid, such as real estate and structured financial instruments. That suggested the government may not have gained large sums of cash to spend.

In another sign that the investigation was winding down, a Saudi official told Reuters on Tuesday that all detainees had now left the Ritz-Carlton. The hotel, where the cheapest room costs $650 a night, is to reopen to the public in mid-February.

Some detainees are believed to have been moved from the hotel to prison after refusing to admit wrongdoing and reach financial settlements; they may stand trial.

Bankers in the Gulf said the secrecy of the crackdown had unsettled the business community and could weigh on the willingness of local and foreign businesses to invest.

“It’s reassuring if this situation is finally at an end, as the process was not clear from the start and at least if it is now ended, that provides some clarity and closure,” said a banker who deals with Saudi Arabia.

But Prince Mohammed appears to have won widespread approval for the purge among ordinary Saudis, partly because the government has said it will use some of the money it seizes to fund social benefits.

“What has happened is great, it will be counted as a win for the government. Whoever the person is, he is being held accountable, whether a royal or a citizen,” said Abdullah al-Otaibi, drinking at a Riyadh coffee shop on Tuesday.

An international financier visiting the region said authorities’ tough approach might ultimately prove effective.

“There are many different ways to fight corruption and not all of them are effective. Ukraine tried to do it by creating institutions, but that hasn’t really worked as that approach doesn’t change behavior,” he said.

“Saudi’s approach stands a better chance of being effective as it’s more direct.”

(Additional reporting by Sarah Dadouch in Riyadh and Tom Arnold in Dubai; Reporting by Andrew Torchia and Angus MacSwan)

Government shutdown fizzles on spending, immigration deal in Congress

Clouds pass over the U.S. Capitol at the start of the third day of a shut down of the federal government in Washington, U.S., January 22, 2018.

By Susan Cornwell and Richard Cowan

WASHINGTON (Reuters) – Congress voted on Monday to end a three-day U.S. government shutdown, approving the latest short-term funding bill as Democrats accepted promises from Republicans for a broad debate later on the future of young illegal immigrants.

The fourth temporary funding bill since October easily passed the Senate and the House of Representatives. President Donald Trump later in the evening signed the measure, largely a product of negotiations among Senate leaders.

Enactment by Trump of the bill allowed the government to reopen fully on Tuesday and keep the lights on through Feb. 8, when the Republican-led Congress will have to revisit budget and immigration policy, two disparate issues that have become closely linked.

The House approved the funding bill by a vote of 266-150 just hours after it passed the Senate by a vote of 81-18.

Trump’s attempts to negotiate an end to the shutdown with Senate Democratic leader Chuck Schumer collapsed on Friday in recriminations and fingerpointing. The Republican president took a new swipe at Democrats as he celebrated the Senate’s pact.

“I am pleased that Democrats in Congress have come to their senses,” Trump said in a statement. “We will make a long term deal on immigration if and only if it’s good for the country.”

Immigration and the budget are entangled because of Congress’ failure to approve a full-scale budget on time by Oct. 1, 2017, just weeks after Trump summarily ordered an end by March to Obama-era legal protections for young immigrants known as the “Dreamers.”

The budget failure has necessitated passage by Congress of a series of temporary funding measures, giving Democrats leverage each step of the way since they hold votes needed to overcome a 60-vote threshold in the Senate for most legislation.

With government spending authority about to expire again at midnight on Friday, Democrats withheld support for a fourth stopgap spending bill and demanded action for the Dreamers.


The roughly 700,000 young people were brought to the United States illegally as children, mainly from Mexico and Central America. They mostly grew up in the United States.

Former President Barack Obama’s Deferred Action for Childhood Arrivals, or DACA, program gave the Dreamers legal protections and shielded them from deportation.

Democrats, as a condition of supporting a new spending stopgap, demanded a resolution of the uncertain future Trump created for the Dreamers with his DACA order last year.

But Democratic leaders, worried about being blamed for the disruptive shutdown that resulted, relented in the end and accepted a pledge by Republicans to hold a debate later over the fate of the Dreamers and related immigration issues.

Tens of thousands of federal workers had begun closing down operations for lack of funding on Monday, the first weekday since the shutdown, but essential services such as security and defense operations had continued.

The shutdown undercut Trump’s self-crafted image as a dealmaker who would repair the broken culture in Washington. It forced him to cancel a weekend trip to his Mar-a-Lago estate in Florida.

The U.S. government cannot fully operate without funding bills that are voted in Congress regularly. Washington has been hampered by frequent threats of a shutdown in recent years as the two parties fight over spending, immigration and other issues. The last U.S. government shutdown was in 2013.

Both sides in Washington had tried to blame each other for the shutdown. The White House on Saturday refused to negotiate on immigration issues until the government reopened.

On Monday, Trump met separately at the White House with Republican senators who have taken a harder line on immigration and with moderate Democratic Senators Joe Manchin and Doug Jones.

Reuters/Ipsos polling data released on Monday showed Americans deeply conflicted about the immigration issue, although majorities in both parties supported the DACA program.


Some liberal groups were infuriated by the decision to reopen the government.

“Today’s cave by Senate Democrats – led by weak-kneed, right-of-center Democrats – is why people don’t believe the Democratic Party stands for anything,” said Stephanie Taylor, co-founder of the Progressive Change Campaign Committee.

Markets have absorbed the shutdown drama over the past week.

U.S. stocks advanced on Monday as each of Wall Street’s main indexes touched a record intraday level after the shutdown deal.

For Jovan Rodriguez of Brooklyn, New York, a Dreamer whose family came from Mexico when he was 3 years old and ultimately settled in Texas, the latest development was more of the same.

“Why do we have to wait – again? It’s like our lives are suspended in limbo,” he said. And they have been for months. I don’t trust the Republicans and I don’t trust (Senate Majority Leader Mitch) McConnell with just a promise. That’s not good enough any more.”

(Additional reporting by David Morgan, Ginger Gibson, Amanda Becker, Blake Brittain, Susan Heavey, Steve Holland, Diane Bartz, Lucia Mutikani, Yasmeen Abdutaleb and Patricia Zengerle in Washington, Megan Davies in New York and Sharon Bernstein in Sacramento, Calif.; Writing by Doina Chiacu; Editing by Alistair Bell and Peter Cooney)

With 25,339 murders in 2017, Mexico suffers record homicide tally

- A police cordon reading "Danger" is pictured at a crime scene where unknown assailants gunned down people at a garage in Ciudad Juarez, Mexico, January 4, 2018. REUTERS/Jose Luis Gonzalez

MEXICO CITY (Reuters) – There were more than 25,000 murders across drug-ravaged Mexico in 2017, the highest annual tally since modern records began, government data showed.

Investigators opened 25,339 murder probes last year, up nearly 25 percent from the 2016 tally, interior ministry data released on Saturday showed. It was the highest annual total since the government began counting murders in 1997.

Mexico has struggled with years of violence as the government has battled vicious drug cartels that have increasingly splintered into smaller, more bloodthirsty, gangs.

Violence is a central issue in July’s presidential election. Mexican President Enrique Pena Nieto faces an uphill battle to keep his ruling Institutional Revolutionary Party in office.

There were 40 percent more murder investigations opened last year compared with 2013, Pena Nieto’s first full year in office.

Mexico on Thursday dismissed a claim by U.S. President Donald Trump that it was the most dangerous country in the world.

(Reporting by Gabriel Stargardter; Editing by Daniel Wallis)

Senior Honduran official rejects new election call amid protests

Senior Honduran official rejects new election call amid protests

By Gustavo Palencia

TEGUCIGALPA (Reuters) – A senior Honduran government official ruled out a new presidential election on Monday, the day after the Organization of American States called for one following a contentious vote that has sparked violent protests.

Electoral authorities said on Sunday that U.S.-friendly President Juan Orlando Hernandez won the Nov. 26 election after partial recounts of voting tallies did not tip results in favor of his opponent, TV host Salvador Nasralla, despite widespread allegations of irregularities.

Hours later, however, the OAS said the process did not meet democratic standards.

First Vice President Ricardo Alvarez flatly rejected the call for another vote. “The only other elections there are going to be in this country will be on the last Sunday of November 2021,” he said.

“This is an autonomous and sovereign nation,” Alvarez told reporters. “This is a nation that is not going to do what anybody from an international organization tells it to do.”

Hernandez, who is mourning the death of his sister in a helicopter crash over the weekend, has not yet commented on the call for new elections.

Nasralla leads a center-left coalition that seemed headed for a surprise upset in the hours after the election, but results suddenly stopped coming in. When they restarted, the outcome began to favor the incumbent.

Opposition politicians hurled accusations of voter fraud at the government, and Honduran military police fired tear gas at protesters, who burned tires and attacked buildings.

Adding to the confusion, European Union election observers on Sunday said the vote recount showed no irregularities. Like the OAS, the EU observers monitored the electoral process in Honduras.

EU chief monitor Marisa Matias said on Monday it was beyond her team’s mandate to say whether there should be a new election, saying that up to two months would be needed to finish a final report.


Nasralla met with OAS Secretary General Luis Almagro and a senior State Department official in Washington on Monday. Nasralla said he was ready for new elections, even though he claimed to have won the first time by half a million votes.

“I’m sure I will win again,” Nasralla said, after handing more material purportedly showing fraud to Almagro.

John Creamer, U.S. deputy assistant secretary of state for the Bureau of Western Hemisphere Affairs, told Nasralla the State Department was studying both the OAS and EU reports and did not speak in favor of or against new elections, Tony Garcia, an adviser to the candidate present in the meeting, told Reuters.

The U.S. State Department issued a statement urging Honduran political parties to raise any concerns about the election using what it said was a legal provision establishing a five-day period for presenting challenges to the results.

“We call for all Hondurans to refrain from violence,” it said.

Honduran rights groups say 20 people have been killed in the protests, almost all by bullet wounds.

Furious that Hernandez had been declared the winner, protesters clashed with police in Tegucigalpa, the capital, blocked roads around the main port and partially burned a courthouse and bank branch in San Pedro Sula, Honduras’ second-largest city.

Honduras has been roiled by political instability and violent protests since the election. The count has been questioned by the two main opposition parties, including Nasralla’s Opposition Alliance Against the Dictatorship, as well as a wide swath of the diplomatic corps.

The OAS statement described irregularities, including deliberate human intrusions in the electoral computer system, pouches of votes opened or lacking votes, and “extreme” improbability around voting patterns it analyzed, making it “impossible to determine with the necessary certainty the winner.”

(Reporting by Gustavo Palencia in Tegucigalpa, Anthony Esposito, Lizbeth Diaz and Gabriel Stargardter in Mexico City, and Mohammad Zargham in Washington; Writing by Frank Jack Daniel; Editing by Matthew Lewis and Leslie Adler)

Middle-class Egypt adapts to survive as austerity bites

Middle-class Egypt adapts to survive as austerity bites

By Patrick Markey and Nadine Awadalla

CAIRO (Reuters) – Swapping new cars for cheaper models, cutting back on pricy supermarket shopping and giving up holidays abroad, middle-class Egyptians are finding strategies to stay afloat after a currency reform a year ago sent their living costs soaring.

Egypt floated its pound in November 2016 as part of a $12 billion International Monetary Fund loan package, and the currency lost half its value, eroding spending power and pushing inflation to record highs over 30 percent this summer.

President Abdel Fattah al-Sisi’s government has been praised by IMF and World Bank economists for reform progress and for measures to shield the poorest from the fallout. But middle-income Egyptians say it has been a year of cutbacks, cost saving and crisis management.

Presidential elections are due early next year and Sisi is expected to seek another term. But some Egyptians are finding that their new economic reality is crowding out politics as they struggle to maintain standards.

Others are digging deep and insist that despite the pain of austerity, Sisi remains the only candidate to provide stability after the years of turmoil that followed the 2011 uprising that ousted Hosni Mubarak.

Overcoming voter apathy may be a challenge if the former military commander decides to run when critics say he will face little competition after what rights groups describe as an unprecedented crackdown on opponents and dissidents.

Low turnout was a worry in 2014, when Sisi won by a landslide, as a popular figure who had overthrown president Mohamed Mursi of the Muslim Brotherhood after mass protests the previous year.

“The rise in prices changed things,” said Ayman, a Cairo bookstore owner. “We hoped for good things from President Sisi … He is a good man and I voted for him, but we are not feeling the progress, all I care about is giving my son a good life, a good home.”

Economic reforms have come at a fast pace.

The IMF deal called for broad adjustments to Egypt’s state subsidies to slash deficits as part of Sisi’s promise to revive an economy hit hard by unrest, protests and militant attacks in the last six years.

Backed by the IMF and the World Bank, Sisi’s government says the overhaul will lead to long-term growth and the return of foreign investment. Officials have adopted programs to provide the poor and vulnerable with cash and other protections.

Still, fuel costs have doubled with two increases in subsidized prices. Electricity prices are up and a new tax helped push inflation to more than 30 percent in July. That has now eased to 25 percent and is expected to fall further soon. But it has been a crushing struggle for some.

Hisham Azz al Arab, chairman of Egypt’s largest private bank CIB, said those on middle and upper incomes were the most affected by the economic reforms, but it would take time for their impact to balance out for those families.

“We saw that clearly in their behavior of spending, it started to change,” he told CNBC. “For the middle and upper class it is a matter of time before income and productivity start to catch up to pre-reform levels.”

A 2016 World Bank survey found the middle class represented around 10 percent of the country’s population of about 90 million just before the Arab Spring protests. Middle-class activists were among the leaders of the 2011 uprising.


For professionals like Karim, a Cairo small business owner, it was a stark adjustment. Monthly food bills went from 1,200 pounds ($67) to 3,200 pounds ($179). That meant for the first time bargain-hunting for food, giving up luxury goods, and using the car less to cut back on fuel spending.

It also meant paying employees more to keep them, while at the same time making sacrifices to keep his children in school.

“The middle class has only two options, fall into the lower class, which is hard for them to do, or get more enterprising,” he said. “Everyone is trying to show they are still in the middle class, people want to tell themselves that.”

For others, maintaining a middle-class lifestyle has meant dipping into savings and giving up restaurants or even turning to relatives for help with the cost of family holidays.

“It’s extinct,” said Islam Askar, a contracting company owner, of the country’s middle class. “There isn’t a household in Egypt that hasn’t been hit by the decrease in the pound and the rise in the prices.”

Economists say middle-class erosion had been reflected in figures for car sales, the weakness in some consumer stocks and in outbound tourism.

For some, like Mahmoud Al-Abadaly, hunting for bargains among the crash-damaged vehicles at a second-hand car shop, politics comes second to cash considerations. A car normally worth 300,000 pounds ($17,000) can be fixed up and had for half that price, he said.

“When a car has been in an accident, its price drops,” he said. “Everyone is trying to do this now because they need to save.”

But Egypt’s inflation outlook is already improving a year after the float, falling to 26 percent in November. Finance Minister Amr el-Garhy said that would fall to around 14 percent by August next year.

What impact a year of austerity will have on Sisi’s popularity is unclear. He has yet to announce his intentions, though supporters have already started a petition campaign for him to run for a second term. For his hardcore backers, it is time to rally behind him despite hard times.

“I will be for Sisi again for the presidency even with inflation, rising prices and the poor state of the economy,” said Ali Abou Al-Saoud, a sales representative.

But some of the president’s high-profile backers have turned against him, partly over the economy.

Turnout may be key for credibility, analysts say, as the government rebrands Egypt as a more stable bet for foreign investment after years of unrest. In 2014, turnout was about 47 percent, less than Sisi had called for.

At the time, Sisi was idolized by many, although his support base has since slipped, critics say. However, protests are now restricted by law and secular activists have been rounded up. Other Egyptians say political fatigue has set in.

“There is still a strong sense of wanting to maintain and enjoy the relative security,” said Ziad Bahaa Eldin, a deputy former prime minister who now works as an economist. “People are suffering from inflation but they want stability.”

(Reporting by Patrick Markey; editing by Giles Elgood)

Congress secures tax deal, Trump backs 21-percent corporate rate

Congress secures tax deal, Trump backs 21-percent corporate rate

By David Morgan and Amanda Becker

WASHINGTON (Reuters) – Congressional Republicans have reached a deal on final tax legislation, the U.S. Senate’s top Republican tax writer said on Wednesday, with President Donald Trump saying he would back a sharply lowered corporate tax rate of 21 percent.

The 21 percent rate would be slightly above a proposed 20-percent rate that Trump supported earlier, but still far below the present headline rate of 35 percent, a deep tax cut that U.S. corporations have been seeking for years.

As they finalized the biggest tax overhaul in 30 years, Republicans for weeks wavered on slashing the top income tax rate for the rich, but finally agreed to do it, despite Democrats’ criticism that the bill favors the wealthy and corporations, while offering little to the middle class.

The emerging congressional agreement includes a 21-percent corporate rate; a top individual income tax rate of 37 percent, down from the current 39.6 percent level; and a $10,000 cap on deducting state and local property or income tax payments, said sources familiar with the negotiations.

Although the president said a “final number” on the corporate rate had not been set, the Senate and House of Representatives were hurtling toward an agreement that would clear the way for final votes in both chambers next week.

“I think we’ve got a pretty good deal,” Senate Finance Committee Chairman Orrin Hatch told reporters as he prepared to join other Republicans for lunch with Trump.

Hatch’s remarks appeared to reinforce expectations that a final vote could begin in the Senate as early as Monday. Further details of the agreed legislation were not yet available.

Republicans have been urgently trying to finalize details of their bill without increasing its estimated impact on the federal deficit. As drafted, it is expected to add as much as $1.5 trillion to the $20-trillion national debt over 10 years.

At a tax event held by Democrats, Moody’s Analytics Chief Economist Mark Zandi said the Republican bill, if enacted, would cause interest rates to rise, meaning the benefits of a lower corporate tax rate would be “completely washed out.”

Stock markets have rallied for months in anticipation of lower taxes for businesses. The benchmark Dow Jones Industrial Average Index <.DJI> was up 0.5 percent at 24,628 in afternoon trading.

“The market is trading at all-time highs, its run-up has been really in anticipation of tax reform,” said Ken Polcari, NYSE floor division director at O’Neil Securities in New York.


Republican Senator Bob Corker, a fiscal hawk, on Wednesday said he was undecided on whether to support the bill. He told reporters: “My deficit concerns have not been alleviated.”

Asked at the lunch by reporters if he would sign a bill with a 21-percent corporate tax rate, Trump said: “I would … It’s very important for the country to get a vote next week.”

With their defeat on Tuesday in an Alabama special Senate election, Republicans were under increased pressure to complete their tax overhaul before Christmas and before a new Democratic Alabama senator can be formally seated in the Senate.

Democrat Doug Jones’ capture of the Alabama Senate seat came hours ahead of the final tax agreement being hammered out.

When Jones, who upset Republican Roy Moore in the deeply conservative Southern state, arrives in Washington, the Republicans’ already slim Senate majority will narrow to 51-49, further complicating Trump’s legislative agenda.

Fast action by Republicans on taxes would prevent Jones from upsetting the expected vote tallies on this bill since he will not likely be seated until late December or early January.

Senate Democratic Leader Chuck Schumer called on Republicans to delay a vote on overhauling the tax code for the first time in 30 years until Jones can be seated, but that was unlikely.

A one-percentage-point change in the corporate rate would give tax writers about $100 billion of revenues over a decade that could be used in many ways. One could be to repeal a federal tax on inheritances paid by wealthy Americans. Another might be to end the corporate alternative minimum tax.

Some Republicans also wanted a slightly higher corporate rate to pay for a higher child tax credit. Lawmakers had also debated capping a popular individual deduction for mortgage interest at $750,000 in home loan value, instead of $1 million.

If Trump can sign a tax bill by the end of the year, it would be the first major legislative victory for him and the Republicans since they took control of the White House and both chambers of Congress in January.

After his lunch with Republican lawmakers, Trump will speak on tax legislation alongside five middle class families who would benefit, senior administration officials said.

He wants to try to counter claims that the Republican tax plan would largely benefit corporations and the wealthy.

The nonpartisan Joint Committee on Taxation and Congressional Budget Office have both said wealthier taxpayers would gain disproportionately from the Republican proposals.

(Additional reporting by Jeff Mason, Steve Holland, Susan Cornwell, Richard Cowan, Makini Brice and Doina Chiacu; Editing by Kevin Drawbaugh and James Dalgleish)