S p 500 by. 5 . Nasdaq down. 75 , well off the lows it is worth noting. They had been down more than 1 at session lows. All this following the headlines and Michael Flynn did plead guilty to lying to the fbi and is agreeing to cooperate in the russia probe. Abc reporting he may testify against President Trump. The idea President Trump had in fact been connected to the russia contact. If we take a look at the intraday chart of the dow, we see this roller coaster ride up until about 11 00. It had been slightly higher, on pace for a record close. As the headlines crossed we see an absolute nosedive. Session lows down 1. 44 . On pace since the worst day since may. Also true for the s p 500. The russell 2000 down significantly, its worst day since may. A little bit of a moderation as investors trying to figure out with this means and the implications. Right now perhaps the moderating of the selling action suggests there is not enough information to know whether or not it could affect the u. S. Corporate profit outlook. We will be continuing to watch that. We are seeing one of the worst sectors the industrial sector take a big hit. Ge, boeing, intel all down. We are seeing indiscriminate selling across sectors of big u. S. Names. The uncertainty of what this could mean for the u. S. And President Trump and policy. We take a look at some of the aerospace and defense stocks, we will see something similar. General dynamics, Northrop Grumman and raytheon down. About thed tensions around Rex Tillerson. This report of tension seems to have this particular area of defense and even a bit more of a tailspin. Confirming today is risk off relative equities, this is pretty interesting. Chart of842, a monthly the range for the 10year yield. Last novemberses, on the election month, it was 70 basis points. Earlier this year around september, 30 basis points. Today, the first day of december, we have basically what is close to the entire range of november. Pretty extraordinary that investors are seeking safety to that degree, not knowing what these headlines mean. Moving towards treasuries, plus the japanese yen and gold. Shery volatility back. Abigail, thank you. Kevin Majority Leader Mitch Mcconnell says he has the republican tax overhaul. Senator jeff flake of arizona getting to a yes brings the count to 50. In the last hour senator Susan Collins, who has announced she is going to support this because of an addition that she got on board saying the Senate Tax Bill will include my salt amendment to allow taxpayers to deduct up to 10,000 for state and local property taxes. She is likely moving in the direction of a yes. So, senator Susan Collins essentially a guess. A yes . With or without her they have 50 votes. Is the the flake 50th vote. Bob corker is not happy, the last, lonely republican fighting this crusade. He is usually not the kind of person to vote no on major pieces of legislation. He votes with the team despite his strong criticisms of President Trump. He tends to vote with republicans on major pieces of legislation 10 nominations. A no vote would be unusual for him, but he has been beating this drum for a while and it looks like his concerns are not addressed there will be 1. 5 taxlion in red ink without increases if this does not pay out. Also we got a larger tax breaks and that helped ron johnson vote yes. How are they going to affect all the cost here . Kind oft is extraordinary to think the Senate Might Pass a bill today in this brainstorming key provisions of it as we speak. That conversations right now, as i understand it are about potential changes to the alternative minimum tax on the individual side, and on the corporate side the existing proposals, for appeal that. It is a lot of money that goes away. They make the changes to it. Itthey might make changes to and existing provisions to the race some of the money lost from the compromise. Kevin a lot of corporations will be looking at that for how they are going to make that a write off. When these things goes to conference next week, assuming it gets out of the senate, the you think certain House Republicans what are the sticking points going to be for them . Sahil thats a great question. The provisions worked differently in the house and senate bill. The house bill imposes a 25 raise for passthrough entities with some exceptions. The senate bill goes an entirely different approach of a deduction. Initially 17. 4 and now raised to 23 which was critical are getting the vote for ron johnson. That will be an issue for some House Republicans. House Republican Leaders are also committed to the idea of full and immediate expensing for a while. If the senate bill ratchets that back, they will be unhappy about it. Im not sure that is the sort of thing that makes for a dealbreaker. It will be interesting negotiation. You. sahil, thank kevin we are joined now by a republican congressman from new york, dan donovan. He was one of the few House Republicans who actually voted against its own tax bill. A few minutes ago we read Susan Collins tweet concerning the deduction. Good is change her vote as the thing was forward . Rep. Donovan not at all. Was Susan Collins proposed is already in the house bill. It allows families to deduct up to 10,000 from their property tax from their federal returns. Back fromready coming with the current allowance is to deduct your property tax. This is a cap of 10,000. It hurts the people i represent. It did not include any state or local income tax deduction, which new yorkers pay 10 other salaries to state and local taxes. It has been in the tax code since 1913. In 1986 when the Reagan Administration overhauled the tax code, they kept that deduction in. What Susan Collins is proposing is already in the tax bill i voted no on. Shery the only got 13 no votes on the house bill. Will you get more lawmakers to vote against the final bill if only property taxes are included . Rep. Donovan im not sure. I heard people voted on the house bill because their concerns should be addressed. The delegation from california, who has a high state and local income tax, they will be halted by not allowing their constituents to deduct that from their federal returns. I heard those folks are waiting for a fix. I just have not seen the fix. Kevin it sounds like you are not convinced this battle it sounds like the battle is far from over and it will be potential problems when this thing gets a conference. Rep. Donovan im not sure. I was a prosecutor for 20 years. People vote for various reasons. As your reporter was saying, there are people concerned about the deficit and the increase in deficit. Im concerned about the individuals in brooklyn and Staten Island trying to put food on their table, trying to pay for their childrens education and depend on this tax deduction. Every april the way for that check from the u. S. Treasury. They either pay a bill with a, take your family on vacation, or repair something in their home. They are just not going to get that. Shery you are up for reelection next year. How will what you and the gop do today affect the outcome of the Midterm Election . Rep. Donovan i cant speak to anybody but myself. The voters are very smart. They will realize i have been their voice down here in washington, that i stood up for what i believe is best for them and their families. Even if it was against my own ty, the limiting eliminating this deduction will harm them and i cannot do that to people that trusted me to come down to washington to be their voice. The voters will look at how i stood up for their beliefs and families, and i think that will be reflected in the election next year. Kevin if folks see a tax increase will be devastating to whomever their lawmaker is, but my reporting has led me to the conclusion the administration wants to get to entitlement reform next spring. That would potentially be a fix it period to fix some of the problems of the tax reform. Walk me through the chances of number one, a Government Shutdown in december, and the real possibility of entitlement reform happening . Rep. Donovan i hope our government doesnt shut down. No incentive representative to washington is shut the government down. They sent us to try to make it work better for them. My hope is that we dont have a Government Shutdown. As far as entitlement reform, there are things we have to change. Economist said if we dont do something with Social Security or medicare, by 2034 it will not exist. They cant pay out benefits the people. That is unfair to people who put 40 or 50 years into Social Security. They deserve their benefits. Maybe we have to change some of the things for the people entering the system now. , maybe for the younger folks a states the age to which they collect their benefits. May be put more money into the program. We cant affect the people who are receiving benefits now. Im 61 years old. I will be i am on the edge now. I have to get at least one Social Security check. Shery how important is it for the gop to be able to show to the public they can actually successfully run the government without a shutdown . Rep. Donovan you are right. People senses that here to make a government run more efficiently and better for them and their families. That is what we often have to do. Often a lot of our differences seem to be regional, even sometimes not even partisan. That people like myself, im a rarity. A republican who represents an urban area. A lot of my colleagues on my side of the aisle present more rural areas. They have different concerns for the people they were present from the people i represent. Many of my colleagues at 18 or 20 counties they represent. I have one county and a portion of another because we are such a densely populated area where i live. We have to realize everyone represents a different 725,000 people, but we have to represent them and not some policy, some piece of legislation will harm them. Kevin great point. It will be fascinating to watch this living shutdown fight play out over december. A lot of folks watching that. Thank you to congressman dan donovan for your time today on bloomberg. Rep. Donovan good to be with you both. Shery Rex Tillerson potentially on thin ice. We will talk to eliot engel of new york, braking member on the House Foreign Affairs committee about this situation affects u. S. Foreignpolicy. This is bloomberg. [laughter] is Bloomberg Markets balance of power. Shery to both get a check of the bloomberg first word news with mark crumpton. Mark thank you. Mitch mcconnell says there are now enough votes to pass the tax bill. Party leaders have been working on hold out since last night. Earlier today, senator ron johnson agreed to back the measure after a larger tax break for socalled pastdue businesses with added. It is not clear how the tax riders would offset the cost of a more generous to duction. A vote is scheduled for about 40 minutes at 2 00 p. M. Washington time. Former National Security adviser Michael Flynn today pleaded guilty to lying to federal agents. Speaking in court as part of his plea agreement, he said the Trump Campaign team asked him to make contact with russians and that he told the Incoming Administration what he was doing. He admitted calling a senior official from the Transition Team guidance before talking to the Russian Ambassador to the u. S. Sergei kate back survey kislyak underreporting after the call. He said it is the extraordinary painful to endure these many months of false accusations of treason and other outrageous acts. He added, i accept full responsibility for my actions. The treasurys Inspector General is looking into why Steve Mnuchins analysis of the republican tax bill has not been released. He promised complete transparency about the analysis and the economic benefits of the tax plan. The nonpartisan joint committee on taxation announced thursday the bill will add 1 trillion to the federal deficit over a decade. The Senate Procedural vote is set for 2 00. Argentina has called up a rescue mission for its missing submarine and 44 crew members. The san juan disappeared more than two weeks ago in the atlantic off the coast of patagonia. Officials say the search to recover the vessel will continue, over that International Assistance and only in waters up to 500 meters deep. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I mark crumpton. This is bloomberg. Back to you in washington. Kevin as march as mentioned, President Trumps former National Security advisor has agreed to cooperate with prosecutors in the russia probe. Cutera talk about the latest developments is the your congressman eliot engel, it was also the Ranking Member of the House Foreign Affairs committee. Congressman, let me get right to it. What the you make of this plea deal . Is essentially general flynn saying he is willing to play ball with paul miller . Rep engel it seems that way because the one count of pleading guilty, even though it was a felony count, was rather restricted. You have to wonder why he would not be indicted on more than one count. It would seem to indicate is some kind of a deal in the works, some kind of putting their Heads Together and working has flipped. Flynn shery how do you expect to help this in the investigation of mr. Mueller . Rep engel i said from the beginning i wanted mr. Mueller to do whatever he needed to do. And what the American People deserve to know is the truth. Flynn was there a lot of the time. He knows what was going on and im assuming he is telling the truth. Another problem for the president in this ongoing russia scandal. Sayn congressman, you folks and is deserve to know the truth. You know this, here in washington there are plenty of people, both republicans and democrats, case in point tony podesta, who have not always disclosed who exactly their foreign powers are. What needs to be changed in the culture of washington, d. C. For these Political Consultants lobbyists and advisers on president ial campaigns to more fully disclose which foreign powers they are actually representing . Rep. Engel first of all there needs to be disclosure. There also needs to be truth. It was pretty clear. They fired flint because he lied to the Vice President flynn because he like to the Vice President. Generally if you tell the truth, the truth will set you free. Is not a matter of whether or not there should have been dealings with russians. Clearly there should not have been to have the russians interfere with our election, but the compounded by lying about it. All of us remember general flynn at the Republican Convention aiding the chant of locker up about lock her up about Hillary Clinton seems hypocritical. Shery how much momentum does this give the investigation did take it from here and move the liability towards President Trump . I am not inagain, favor of going after anybody. Im in favor of finding out what the truth is. If any laws were broken, whoever broke those laws should be we need to go after them. It does not matter who it is. I dont think it is a matter of trying to bring down the president or bring down somebody else. Obviously there is tremendous interference with our election. Democratic process by the russians. Obviously it seems to be known about, for directly dealt with in the highest echelons of the Trump Campaign. I want to know, and i think the American People want to know exactly what happened. It is not a matter of getting somebody. It is a matter of trying to get the truth. Kevin let me ask about from a business perspective because Silicon Valley has faced intense pressure for not disclosing their advertising. We are starting to see changes from facebook, twitter about disclosures. Do you agree self policing is enough or not . What role the companies have to play as we gear up for the Midterm Elections and the 2020 election . What role does the Business Community into play in preparing for these types of advertisements that we saw from folks out in San Francisco . Rep. Engel i think things are changing. The old business as usual is not enough. People want more transparency. They want to be open. To see it with the sexual scandals that have come out. You see it with these different groups who keep things to themselves. I think the climate in washington is changing. I think people demand the change in a think it is really good to open up the door and