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President Donald Trump on Wednesday cast aside decades-old U.S. norms by saying any Middle East peace deal would not necessarily have to establish a Palestinian state.

“I'm looking at two-state and one-state, and I like the one that both parties like,” Trump said standing alongside Israeli Prime Minister Benjamin Netanyahu in the White House’s East Room. “I'm very happy with the one that both parties like. I can live with either one.”

Trump’s reply to a reporter’s question very much reflected his business background. The new U.S. president sees the decades-old plan for a Palestinian state existing peacefully beside a Jewish state as an unmet goal. The 45th U.S. president is eager to nudge both sides toward a deal, and to get one, he is willing to accept something that falls short of the idea of two countries.

“I thought for a while the two-state looked like it may be the easier of the two but honestly, if Bibi and if the Palestinians -- if Israel and the Palestinians -- are happy, I'm happy with the one they like the best,” Trump said.

[Trump Hill Backers Provide Cover After Flynn Departure]

So far, congressional GOP leaders seem content with giving Trump ample room to pursue a peace deal, and on his policy toward the Jewish state.

For his part, Netanyahu, who has strong support within the Republican caucus in both chambers, laid out his “two prerequisites for peace.”

“First, the Palestinians must recognize the Jewish state,” he said. “They have to stop calling for Israel's destruction, they have to stop educating their people for Israel's destruction.

“Second, in any peace agreement, Israel must retain the overriding security control over the entire area west of the Jordan River because if we don't, we know what will happen,” the Israeli leader said. “Because otherwise, we'll get another radical Islamic terrorist state in the Palestinian areas exploding the peace, exploding the Middle East.”

Another issue on which Republican leaders are giving Trump ample leeway is his campaign trail pledge to move the American embassy from Tel Aviv to Jerusalem. Since taking office, Trump has backed away from the pledge, saying it is complicated.

On Wednesday, he said his administration is “looking at it very, very strongly,” adding, “and we'll see what happens.”

Netanyahu took Trump off guard by announcing the duo intend to seek more than just an Israeli-Palestinian peace pact.

“I believe that the great opportunity for peace comes from a regional approach from involving our new found Arab partners in the pursuit of a broader peace and peace with the Palestinians,” he said.

[Trump Accuses Agencies, Media of ‘Cover-up’ Via Russia Leaks]

A moment later, Trump said he “didn't know you were going to be mentioning that,” while also throwing his weight behind the deal: “I think it's a terrific thing and I think we have some pretty good cooperation from people that in the past would never, ever have even thought about doing this.”

Neither Trump nor Netanyahu identified which countries would be involved in such an initiative.

The U.S. president looked directly at Netanyahu at one point and urged him to temporarily stop building settlements on the West Bank. The Israeli leader held tight to both sides of his podium and stared back at Trump, stonefaced.

In another remarkable moment Trump pinned blame for his decision to fire his national security adviser, Michael Flynn, on the media. In doing so, he contradicted his own top spokesman, Sean Spicer, who on Tuesday said the president asked Flynn to step down because he had lost “trust” in him.

“Gen. Flynn is a wonderful man. I think he's been treated very, very unfairly by the media, as I call it, the fake media in many cases,” Trump said. “And I think it's really a sad thing that he was treated so badly.

“I think in addition to that from intelligence, papers are being leaked, things are being leaked, it's criminal action,” he said, referring to Flynn’s conversations with a top Russian diplomat.

“It's a criminal act and it's been going on for a long time before me but now it's really going on,” he said, next repeating a morning Twitter rant by saying the Flynn-Russia narrative is meant to “cover up for a terrible loss that the Democrats had under Hillary Clinton.”

https://twitter.com/realDonaldTrump/status/831837514226921472

Contact Bennett at johnbennett@cqrollcall.com. Follow him on Twitter @BennettJohnT

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Heard on the Hill

Take Five: Brian Mast

By Alex Gangitano
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Utah Sen. Orrin G. Hatch has launched a new push for a bipartisan Senate alternative to the contentious House Republican tax plan, as President Donald Trump begins to frame administration priorities.

The Senate Finance chairman said last week he was meeting with Democratic tax writers one-on-one and hoped there would be leeway for deals, after bitter debates over Health and Human Services Secretary Tom Price and Treasury Secretary Steven Mnuchin riled the Senate and exposed deep partisan fault lines.

“I don’t think you can pass a tax bill, unless it’s bipartisan,” Hatch said in an interview.

After rolling over Democrats who boycotted a committee markup to get both nominations to the Senate floor, the top tax writer said political pressure as the 2018 midterm elections approach could eventually help to bring lawmakers together on taxes. “It may be the reason we finally do something,” Hatch said.

He referred to the fact that 23 Democrats and two independents who caucus with them — including nine Finance members — will be up for re-election in 2018, compared to just eight GOP senators.

Hatch, 82, is among the Republicans whose terms end in 2018, and he is weighing another campaign — even though he indicated in 2012 this would be his last term.

The seven-term senator said the House GOP plan would not pass the Senate, even if it moves under reconciliation instructions that would allow passage with 51 votes. He pointed to disputes over parts of the House plan, including a proposal for border adjustments to apply business income taxes to imports but not exports.

To develop a tax measure, Hatch has pointed to several legislative models, including the permanent and temporary tax breaks in the fiscal 2016 omnibus bill, a regular-order measure enacted without revenue-raising offsets. Other prototypes include two tax cuts enacted as reconciliation measures under President George W. Bush, and the 1986 tax overhaul.

Hatch’s vision for compromise drew support from former Texas Republican Sen. Phil Gramm, a consultant and longtime adviser to Senate Majority Leader Mitch McConnell of Kentucky. Gramm said in an interview that he encouraged GOP senators to follow the course that led to the 1986 law, which was largely written in the Senate.

“We ought to do what we did … in 1986, when we reduced subsidies, simplified subsidies and lowered rates,” he said.

For now, leaders of both parties said any Senate talks would face a deep partisan divide over across-the-board individual rate cuts in the current House GOP and Trump tax plans.

South Dakota Sen. John Thune said he and other senior Republicans would insist on sweeping rate cuts, while Democrats such as Sens. Sherrod Brown of Ohio and Dianne Feinstein of California would push against tax cuts for wealthy families.

“Rich people don’t need more tax breaks,” Brown said.

Both sides will be looking for areas of potential common ground in a tax outline that Trump’s team plans to unveil in several weeks.

Brown said any deal would need a number of sweeteners to attract liberals like him. For example, he wants indexing for the earned income tax credit and child tax credit.

Feinstein said any bipartisan compromise likely would need to focus on “middle-income people, who live paycheck to paycheck.” She said she voted for Bush’s first tax cut in 2001 with 11 other Democrats because it expanded the child tax credit and “was not a millionaire’s bill.”

With or without a broad bipartisan deal on his panel, Hatch and other senior Republicans said they will be looking to woo Democrats if a bill gets to the floor. “That doesn’t mean you have to have everybody on both sides,” Hatch said.

Top targets for the GOP charm offensive include several centrists up for re-election, including Democrats Joe Manchin III of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana, as well as Angus King, the independent senator from Maine who caucuses with the Democrats.

Even a few Democratic allies could help Hatch and other GOP leaders deal with procedural hurdles, and make up for potential defections from the 52-seat GOP majority.

In 2003, Bush narrowly won Senate passage for his second tax cut on a 51-50 vote. Three GOP “no” votes were offset by the “aye” votes of two Democrats and Vice President Dick Cheney.

With that precedent in mind, Hatch said he plans more huddles with Democrats in coming days to gauge their interest.

“We’re not ignoring their needs. … We’ll have to see. There’s a lot of bitterness around here,” he said.

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