WASHINGTON – The Republican push to rewrite the tax code gained momentum Tuesday after a Senate panel advanced the measure and several wavering lawmakers signaled that they are leaning toward backing the bill.
Republicans on the Senate Budget Committee unanimously voted to send the party’s tax package to the Senate floor, setting up a final vote as soon as this week. The measure moved forward when two GOP senators on the committee who had threatened opposition, Sens. Bob Corker, Tenn., and Ron Johnson, Wis., instead supported the legislation.
Corker said he had reached an agreement with GOP leaders that would limit the tax plan’s impact on the debt. Johnson, who has repeatedly threatened to vote against the bill because he says it favors corporations over other businesses, said he continued to have concerns but voted to “make sure this process moves forward.”
While the bill now heads to the Senate floor, it remains unclear whether Republicans have the 50 votes they need for final approval. GOP leaders still have to corral several on-the-fence members of their caucus, who have different and contradictory demands.
But getting the legislation to the floor represents a significant victory for President Trump and Republican leaders, who are trying to deliver a major legislative accomplishment after a year full of misfires.
Trump on Tuesday visited Republicans at the Capitol to cajole skeptical lawmakers. During his visit, he clashed with Johnson over the senator’s demands but appeared to make substantial progress toward winning another key vote, from Sen. Susan Collins, R-Maine.
In a private meeting with Collins before lunch, and again in front of the larger group of Republicans, Trump signaled openness to Collins’s demands, which include paying federal subsidies to help lower-income Americans afford health coverage and allowing Americans to continue deducting up to $10,000 in property taxes from their taxable income.
“It’s certainly progress,” said Collins, who played a central role in derailing GOP health-care bills this year.
McConnell said Tuesday that he intends to press forward with the bill in the coming days, eyeing passage by the week’s end.
“It’s going to have lots of adjustments before it ends, but the end result will be a very, very massive . . . tax cut,” Trump said.
Beyond bolstering support for the bill, Republicans must also fit the sweeping tax cut – most of it aimed at businesses – into a tight fiscal straitjacket because of their decision to use special budget procedures to avoid a Democratic filibuster.
That means the changes sought by Collins, Johnson and others would require finding offsetting revenue elsewhere in the bill. And that could create problems for other Republicans.
The House has already passed its version of the tax plan, and the Senate bill is certain to be considerably different. Republicans in the two chambers would have to reach an agreement on a consensus bill.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, said Tuesday that he expected a formal conference committee to be appointed to hash out the differences, even as more Republicans speculated that the House would simply pass the Senate bill.
“We’re looking forward to finding common ground in conference, finalizing the details and sending this historic legislation to the president by the end of the year,” Brady said in remarks to the American Enterprise Institute.
The Senate tax bill would permanently slash the corporate tax rate from 35 percent to 20 percent starting in 2019 and temporarily lower the tax rates paid by individuals and families through 2025. It would also repeal a provision of the Affordable Care Act that sets up penalties if Americans don’t have health insurance, a central plank of the Obama administration’s signature health-care law.
The health-care provisions in the bill prompted Collins to seek legislation stabilizing insurance markets, including a bipartisan bill sponsored by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., that would make federal payments to insurers, as well as a measure Collins co-sponsored with Sen. Bill Nelson, D-Fla., that would provide new reinsurance payments to subsidize high-cost patients.
Those bills, however, cannot be added directly to the tax package because of fiscal and procedural constraints. Collins said she wants to see the health legislation pass into law before the differences between the House and Senate tax bills are resolved.
Meanwhile, few details have emerged about the deal Corker secured to blunt the tax plan’s deficit impact. He had sought the inclusion of a fiscal “trigger” that would generate additional revenue if the bill failed to spark the economic growth that Republicans have predicted.
Some Republicans aired concerns that any such trigger could cause a tax increase amid an economic downturn or complicate companies’ ability to do long-term planning and investment. Grover Norquist, the influential president of Americans for Tax Reform, called the concept a nonstarter: “No one invests in response to ‘maybe.’ A trigger that threatens tax hikes is a self-fulfilling threat to kill jobs.”
Corker would not discuss details of the proposal Tuesday but assured reporters that his colleagues would find it palatable.
“There’s agreement in principle, very strong agreement, with McConnell, with the Finance Committee – and of course the White House has been in the midst of all this, too – but the agreement was made with McConnell and the Finance Committee leadership,” Corker said.
No official analysis has been released by the Treasury Department or the nonpartisan congressional Joint Committee on Taxation to support the GOP claims that growth would make up for revenue losses. In a Tuesday memo, the taxation committee told Sen. Ron Wyden, D-Ore., that it might have a rough analysis available by late Wednesday – though that report would not include the latest changes to the Senate legislation.
Wyden, the top Democrat on the tax-writing Senate Finance Committee, called the inclusion of a trigger “another budget gimmick” that would obscure the true cost of the GOP bill.
“What they have done for months is resisted efforts to give us anything resembling legitimate scoring,” he said.
Johnson’s opposition is based on his complaints that the bill would not sufficiently lower taxes for millions of businesses that are effectively taxed through the individual income tax code. These businesses, known as “passthroughs,” would receive temporary tax cuts that expire in 2025, unlike the tax cuts for corporations, which would be made permanent.
Republicans control 52 votes in the 100-seat Senate, and they can afford to lose the support of just two members if they want the measure to pass.
The president and White House officials have made entreaties to some Democratic senators representing states that voted for Trump last year, but they have yet to persuade any to support the bill.
Various estimates show that the tax plan would disproportionately benefit corporations and the wealthy, with many middle-class Americans seeing their taxes increase over time. Republicans have said they would not allow taxes on the middle class to rise and would change the bill if needed, but it has left an opening for Democrats to attack the package.
“This legislation is a disastrous and unfair piece of legislation that gives huge tax breaks to the people who need it the least – the very, very wealthy,” said Sen. Bernie Sanders, I-Vt.
Budget Committee Democrats unanimously voted against advancing the tax bill Tuesday, and protesters disrupted the panel’s meeting shortly before the vote, chanting “Kill the bill.” But the measure proceeded after the protesters were cleared, and Democrats were unable to slow it down or change its design.
Describing the committee vote at the White House on Tuesday, Trump touted his party’s success. “We had a unanimous vote – from the Republican side, at least.”