Fate of GOP Tax Bill Hinges on Small Handful of Senators

Daines and Johnson are holding back their support over small-business provisions, while others remain on the fence over deficit concerns.

Sen. Ron Johnson speaks to the media on Aug. 16 in Madison, Wis.
AP Photo/Scott Bauer
Casey Wooten
Add to Briefcase
Casey Wooten
Nov. 27, 2017, 8 p.m.

The GOP effort to rework the tax code is moving into a critical period in the Senate, where lawmakers plan to vote on the bill in the full chamber as soon as this week, but have yet to secure the necessary votes.

Republicans need to convince 50 of their 52 Senate members to vote for the bill, and negotiations will take place all week to sway about a half-dozen GOP senators who are either uncommitted or oppose the legislation. The negotiations could include changes to provisions on pass-through entities or new measures to combat the federal deficit as leadership scrambles to lock down the last remaining votes.

If Senate Majority Leader Mitch McConnell can corral enough votes through cajoling, deal-making, or however else, it would mark a significant step toward the bill becoming law and put Republicans closer to achieving their sole major legislative victory in 2017.

But two Republicans have already come out against the measure over its treatment of pass-through entities—businesses that pass their profits onto the owner, which are then taxed at the individual rate. Wisconsin’s Ron Johnson and Montana’s Steve Daines have said they won’t vote for the bill as it is.

“I want to see changes to the tax-cut bill that ensure Main Street businesses are not put at a competitive disadvantage against large corporations,” Daines said in an emailed statement, adding that he remained optimistic about arriving at a deal.

One option could be to raise the 17.4 percent deduction for pass-through entities laid out in the Senate tax bill. Another could be to treat the state and local income tax deduction the same between corporations and pass-throughs.

A more immediate issue is whether Johnson would vote for the tax bill when the Senate Budget Committee considers the measure Tuesday. Johnson said late Monday he would vote against the bill in committee if his concerns were unresolved.

“A number of us I don’t think are going to vote for it unless we have these issues fixed,” Johnson told reporters.

The makeup on the committee is 12 Republicans and 11 Democrats. As would be the case for a vote in the full chamber, the bill is unlikely to get any Democratic backing. Johnson said he would be meeting with leadership staff Monday night on the issue.

Efforts to provide more tax relief to pass-through entities could bump up against the other big issue that some lawmakers have with the sweeping tax bill: its deficit impact.

According to a Congressional Budget Office report released Sunday, the Senate tax bill will add about $1.4 trillion to the deficit over a decade. And that figure doesn’t factor in the notion that a future Congress would likely renew several personal tax breaks the bill sets to expire in 2025, at a cost of several hundred billion dollars.

Deficit-hawk senators such as Jeff Flake, Bob Corker, and James Lankford have balked at the idea of adding so much to the national debt.

That’s why Corker has proposed creating “backstop” provisions in the legislation in case the economy doesn’t achieve the economic growth needed to pay for the bill, possibly through changing tax rates.

Corker told reporters that he has been working throughout the Thanksgiving break on the issue with members of the administration and Finance Committee, talking “nonstop throughout the weekend” with White House chief economic adviser Gary Cohn. The administration, he said, is receptive to the idea.

Corker is also a member of the Senate Budget Committee and said it was possible that he would vote no on the bill unless he received a deal on the deficit issue. Corker didn’t give details on the structure of any revenue-raiser but said it should be large enough to make up the shortfall.

“It’s got to be at a point in time that allows you to recoup what hasn’t been met up until that date, so the order of magnitude depends on what shortfall might exist,” Corker said.

Elsewhere, Sen. Susan Collins’s vote remains an open question after she voiced concern over the Senate bill’s proposal to repeal the Affordable Care Act’s individual mandate on purchasing health insurance.

Others who could voice opposition include Sens. John McCain, Lisa Murkowski, and Jerry Moran—who told a Kansas newspaper last week that he preferred the Senate drop the individual-mandate repeal from its bill and address it separately.

That’s an unlikely proposition, however, as the individual-mandate provision would raise between $300 and $400 billion and is necessary for the bill to meet fiscal constraints in the Senate.

The White House, which has so far applied a light touch in whipping tax-reform votes in Congress, is ramping up its efforts this week as well.

President Trump hosted members of the Senate Finance Committee on Monday. The president is set to push the tax plan at the GOP senators’ weekly policy lunch Tuesday.

After Monday’s meeting, Senate Finance Committee Chairman Orrin Hatch said that he wasn’t concerned about the major differences between the Senate and House tax plans, which treat the deduction for state and local taxes differently, among other provisions.

“We’re generally able to get together and solve these problems, and I think we will,” Hatch told reporters.

If the Senate passes its tax bill, it would need to be reconciled with the House version, which passed earlier this month. But some analysts have said congressional GOP leaders may push for an informal conference between the House and Senate, applying the changes to the final Senate version and having the House then take up that bill, avoiding a potentially weeks-long conference-committee process.

Hatch said he hoped to get a bill to the White House by Christmas.

What We're Following See More »
FOSTER FREISS TO MAKE ANNOUNCEMENT TODAY
GOP Megadonor Running For Governor In Wyoming
3 hours ago
THE LATEST

"Republican megadonor Foster Friess has told party leaders in Wyoming that he plans to run for governor," and is expected to make an announcement this afternoon. Friess has donated "millions of dollars to Republican candidates and causes over the last decade, according to federal campaign finance records," including over "$1.7 million to boost Santorum's [presidential] campaign" in 2016. Gov. Matt Mead (R) is term-limited, and "a handful of Republicans are running in an open primary to succeed him in one of the reddest states in the country."

Source:
DEATH TOLL REACHES 38
Israeli Army Kills Four Palestinian Protestors
5 hours ago
THE LATEST

Four Palestinian protestors have been killed by Israeli fire near the Gaza-Israel border, bringing the death toll to 38, in what marks the "fourth consecutive week of Gaza's March of Return mass protests." The marches are part of a "month-and-a-half-long protest organized by Hamas near the border fence," which organizers have said will not stop before May 15. The marches are intended to emulate anti-apartheid protests in South Africa, and to commemorate the forced expulsion of Palestinians from their homes in 1948, during the establishment of the State of Israel.

Source:
NO TIMELINE SET
McCabe To Sue For Wrongful Termination, Defamation
5 hours ago
THE LATEST

"Former Deputy FBI Director Andrew McCabe is looking to sue for defamation, wrongful termination and other possible civil claims, his lawyer told reporters Friday." McCabe's attorney Michael Bromwich said that his team "hasn't managed to find any witnesses to corroborate McCabe's version of the story," although they have not had enough time to do so. "McCabe’s lawyers are also seeking ways to release the emails between McCabe and Comey, which would offer insight into their communication about the leaks to the Wall Street Journal."

Source:
SEEKS COMPENSATORY DAMAGES
DNC Files Sweeping Lawsuit Over 2016 Election
6 hours ago
WHY WE CARE

"The Democratic National Committee filed a multimillion-dollar lawsuit Friday against the Russian government, the Trump campaign and the WikiLeaks organization alleging a far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump. The complaint, filed in federal district court in Manhattan, alleges that top Trump campaign officials conspired with the Russian government and its military spy agency to hurt Democratic presidential nominee Hillary Clinton and help Trump by hacking the computer networks of the Democratic Party and disseminating stolen material found there." The DNC is seeking "millions of dollars in compensation to offset damage it claims the party suffered from the hacks," and is arguing the cyberattack" undermined its ability to communicate with voters, collect donations and operate effectively as its employees faced personal harassment and, in some cases, death threats."

Source:
BIGGEST FINE OF TRUMP ERA
Wells-Fargo Fined $1 Billion For Defrauding Customers
7 hours ago
THE LATEST

The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency have fined Wells Fargo $1 billion dollars for convincing customers to buy insurance they did not need, and could not afford. "In October, the bank revealed that some mortgage borrowers were inappropriately charged for missing a deadline to lock in promised interest rates, even though the delays were Wells Fargo's fault." The bank has also apologized for . "charging as many as 570,000 clients for car insurance they didn't need," and found that about 20,000 of those customers "may have defaulted on their car loans and had their vehicles repossessed in part because of those unnecessary insurance costs."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login