Pressure Mounts on Tax Writers to Produce Reform-Bill Details

Tax reform can’t happen without a budget, but conservatives won’t back the budget without a clearer plan.

House Freedom Caucus Chairman Mark Meadows
AP Photo/Manuel Balce Ceneta
Sept. 11, 2017, 8 p.m.

President Trump stunned Republicans when he agreed to a debt and spending deal with Democrats last week, an effort the administration said would “clear the decks” for tax reform. But months into the process, members of his own party are growing impatient about the lack of details on an overhaul bill.

Conservative House Republicans continue to say they won’t vote for a budget resolution—which is needed to pass a GOP tax plan with 50 votes in the Senate—unless they get more specifics on the tax bill beforehand.

“Everybody has been saying we’re going to see the details in two weeks, but they’ve been saying that for four months, and so we need to see the details any day now,” said Rep. Dave Brat, a member of the conservative House Freedom Caucus.

The pressure is mounting on tax writers to release more details, with a little more than 40 legislative days before the end of the year.

Any delay could set up a headache for GOP leadership and tax writers at end of the year, when a major funding deadline could collide with Republicans’ self-imposed deadline to finish tax reform. Before then, lawmakers must also fund the Children’s Health Insurance Program and federal aviation programs by the end of September and will likely need to provide additional funds to help victims of Hurricanes Irma and Harvey.

Trump has played both sides of the issue, saying in a speech last week that the White House would get into “great detail” in the following weeks on tax reform. Then he turned up the rhetoric on tax writers last Friday when he sent a tweet pressing lawmakers to begin committee work on a tax bill.

“Republicans must start the tax reform/tax cut legislation ASAP,” Trump tweeted. “Don’t wait until the end of September. Needed now more than ever. Hurry!”

That effort followed into the weekend, when Trump hosted Cabinet members at Camp David for a discussion of tax-reform strategy, among other issues. There, Trump called on lawmakers to “speed up” the pace of crafting tax legislation.

White House officials, however, have said that Congress and the administration must first agree to a broad outline on tax reform before committees can begin finalizing legislation. The “Big Six,” a group of congressional GOP leaders and White House economic officials, has been meeting for months to hammer out an outline on tax reform, but they’ve yet to go public with answers to key questions.

Trump has said he remains committed to a 15 percent corporate tax rate, but House Speaker Paul Ryan said last week that Trump’s figure was likely unworkable given revenue constraints, and he put the rate in the low 20s.

And some rank-and-file Republicans say the tax-writing principals have yet to square their tax-reform plans with them.

“A 25 percent corporate rate does very little for the economy,” House Freedom Caucus Chairman Mark Meadows said Friday.

Some House conservatives also oppose plans to make a tax bill revenue-neutral, meaning that every tax cut will be offset with revenue-raising provisions. For them, the budget vote is one of their best leverage points to shape the tax bill.

“This budget only means one thing, and that means tax reform,” Meadows said.

Meadows and the 30-plus Freedom Caucus members could help sink a budget bill in the House, since Democrats will be unified on what is traditionally a partisan vote.

But releasing too many tax-reform details can have its own pitfalls.

“Do you want to show members all of the good and potentially all of the bad on tax reform before you move forward on the bill?” said Jon Traub, a managing principal at Deloitte and a former staff member on the House Ways and Means Committee.

That could give more time for coalitions to form against particular provisions in the plan, or time for special interests to lobby to preserve their particular tax break.

The House Budget Committee approved its fiscal 2018 budget in July. The bill sets out instructions for reconciliation but has major issues that could impede its progress. First, it assumes that Congress repealed the Affordable Care Act, which it failed to do. Second, it contains politically sensitive spending cuts and a rollback of financial-industry regulations, which could pose problems for its passage.

House Budget Committee Chairwoman Diane Black has been has been making the rounds trying to win over skeptical members, but Brat said the whip count on the budget “didn’t look good” so far. Meadows said only a handful of his caucus would vote for the current bill.

The Senate continues to work on its own budget bill, though some members of the Budget Committee have said they would also like to see more details on tax reform before finishing the resolution. Members met last Thursday to work on crafting a bill.

Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn are set to head to Capitol Hill Tuesday to meet with Senate Majority Leader Mitch McConnell and budget writers to discuss advancing a budget bill in the slim margins of the upper chamber.

If tax writers run out of time this year, they could push their deadline into early 2018, or they could pass a few basic tax cuts as part of annual legislation that extends several temporary tax breaks, known as the extenders bill.

In a Monday briefing, White House press secretary Sarah Huckabee Sanders didn’t discount the possibility of the administration adding middle-class tax cuts to an end-of-year extenders bill if Congress couldn’t get a broader overhaul bill done by Dec. 31. While tax reform is the focus, she said, they would “look at other options at that point.”

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