GOP Sends Democrats Mixed Messages on Tax Reform

President Trump is taking a carrot-and-stick approach to centrist Democratic senators that could be swayed to vote for a Republican-backed tax bill.

Over the past two weeks, the White House has ramped up calls for Democrats to back the administration’s nascent tax plan to lower the corporate and individual rates, simplify the code, and repatriate foreign earnings to the United States. In a tax-reform speech Wednesday at an oil refinery in Bismarck, North Dakota, Trump praised Sen. Heidi Heitkamp, calling her a “good woman.” Heitkamp traveled to North Dakota with Trump on Air Force One.

A few minutes later came the other side of Trump’s strategy, when he called on North Dakotans to vote out lawmakers who don’t back his tax plan.

“If Democrats don’t want to bring back your jobs, cut your taxes, raise your pay, and help America win, voters should deliver a clear message: do your job to deliver for America, or find a new job,” Trump said.

In a Missouri speech last week, Trump singled out Sen. Claire McCaskill, who like Heitkamp is up for reelection in 2018, with a similar barb. Trump is set to take to the road weekly to sell the GOP tax-reform effort to voters.

Reeling from their failure to advance a measure rolling back the Affordable Care Act by a single vote, Republicans may need a few Democrats to pad the slim margin in the Senate if they want to pass a tax bill. Republican leaders and the White House plan to advance their tax plan using budget reconciliation, which needs only a simple majority in the upper chamber but requires that the bill remain budget-neutral after a decade. The GOP isn’t united on the effort to court Democrats, but many say they’re open to the idea of talking. Most Democrats, however, remain skeptical.

Limited Democratic buy-in on tax reform is a difficult prospect, but it’s not impossible.

Trump struck a deal Wednesday with Democrats to advance a rare bipartisan package to raise the debt ceiling and fund the government through mid-December and to provide funding for victims of Hurricane Harvey. The move caught many Republican leaders off guard and reminded Washington of the president’s fondness for bucking political norms. Trump said Thursday that the move could signal more bipartisan dealmaking.

“I think you really saw it yesterday loud and clear,” Trump said, according to pool reports. “The people of the United States really want to see a coming together, at least to an extent.”

The White House characterized the deal as a way to clear the runway for work on tax reform, though now the administration’s deadline to pass a tax bill by the end of the year will run into the need to again pass funding and debt ceiling legislation.

And the vote math may get more difficult for Republican leaders after the House Freedom Caucus said it was close to finishing its own tax reform plan, according to a late Wednesday report by Axios. That plan could have more ambitious rate cuts that the broader GOP effort and promise a welfare overhaul. That could make securing a few Democratic votes even more crucial if some House conservatives and their Senate allies go their own way on tax reform.

The list of potential Democratic crossovers is short. Senate Democrats issued a letter in early August laying out their requirements to go along with tax reform, saying that a bill shouldn’t cut taxes for the wealthy. Just three Democrats, Sens. Joe Manchin, Joe Donnelly and Heitkamp, all who are up for election in red states in 2018, didn’t sign on to the letter.

Other Senate Democrats up for reelection in states won by Trump are Bill Nelson, Jon Tester, and Sherrod Brown.

In Congress, GOP senators are mixed on the notion that they should sway Democrats. Senate Majority Leader Mitch McConnell said in early August that Republicans will go it alone on tax reform. But Sen. John Thune, a member of both leadership and the tax-writing Finance Committee, told reporters that he hoped they could attract some moderate Democrats.

The Big Six, a group of White House officials, congressional leaders and the chairman of the tax-writing committees, are handling high-level tax reform negotiations, and Democrats aren’t at the table. Bipartisan talks would likely have to begin before committees begin marking up any bill. Senate Finance Committee Chairman Orrin Hatch said he’s open to the idea.

“It always helps if you can work together, and I’m one who wants to work together,” Hatch said.

Heitkamp remains open to a tax bill and said in a statement that it was “encouraging” Trump is committed to supporting U.S. workers. Heitkamp has run counter to the Democratic line before when she met with Trump amid speculation that she would be nominated for a cabinet position, and when she voted to confirm Supreme Court Justice Neil Gorsuch. Still, the former North Dakota tax commissioner said in a statement that she’s waiting for details on a comprehensive, permanent tax proposal, an outcome that the GOP looks increasingly unlikely to produce.

Most Senate Democrats remain skeptical to the Republican overtures for bipartisan tax reform.

“They have basically frittered away needlessly months and months when they could have worked on bringing people together,” Senate Finance Committee ranking member Ron Wyden told reporters Tuesday.

The issue is historical for Wyden, who cites the sweeping 1986 reform bill as a model for bipartisan tax legislation. That bill—which eliminated a raft of deductions and lowered individual rates while increasing corporate taxes—passed against long odds with the help of Reagan administration officials Don Regan and James Baker coming together with congressional Democrats like Sen. Bill Bradley and House Ways and Means Committee Chairman Dan Rostenkowski.

Democrats are wary of the GOP pledge for a reform bill that overhauls the tax code, and instead see a straight tax cut taking shape, something they are unlikely to back.

“Time would be better spent right now giving us a very specific detailed proposal that we could work with them on; right now what we have are slogans and tweets and nothing concrete in terms of what their proposal is,” Sen. Debbie Stabenow, a Finance Committee member, told reporters Wednesday.