clock menu more-arrow no yes

Republicans have agreed on a deadline for tax reform — but no plan

House Speaker Paul Ryan And GOP Leadership Address The Media After Weekly Conference Meeting Chip Somodevilla/Getty Images

President Donald Trump paid Senate Republicans a visit on Tuesday and talked more of the same vague “pro-growth,” “pro-jobs” agenda he and Republicans have been selling for months.

Everyone in the conference agrees tax reform needs to happen, and soon — but Trump didn’t articulate any details or policy specifics. That in itself is indicative of a major problem facing Republicans.

“There is a real frustration among House members and senators here that we have been talking about tax reform for many months and we have no more details to actually debate at this late stage in the legislation year,” a Republican lawmaker told Vox.

It’s the second time Trump has directly addressed Congress this week. On a Sunday call with House Republicans, he told members they would face a bloodbath in 2018 if they didn’t get the budget and tax reform done fast. But the Senate didn’t appear to get the same treatment. Trump didn’t give the upper chamber any ultimatums or deadlines, Sen. Ted Cruz (R-TX) said.

“The conversation was much more far-reaching — it was not just tax reform,” Cruz said, reiterating Trump’s platitudes. “It was the full gamut of the agenda, really focused on jobs and economic growth and really delivering for the working men and women of this country.”

Both House and Senate Leaders have said they are intent on getting tax reform done by the end of the year. But it’s clear that Republicans have a long way to go.

“The next couple months are going feature considerable negotiation and discussion to get to consensus,” Cruz said.

Republicans still don’t seem to know what they’re doing on tax reform

The House is planning to drop its tax bill next week, on the condition that the Republican conference can pass the Senate’s budget, giving Republicans the green light to pass tax reform with only GOP votes.

But House Republicans are still debating the specifics.

“The fact you don’t have a bill yet is because they keep trying to put the puzzle pieces together and it doesn’t fit,” Rep. Joe Barton (R-TX) told reporters Monday night.

For months, top senators, House members, and two members of the Trump administration have been hashing out tax reform behind closed doors. They came up with a framework of the bare minimum: a substantial cut to the corporate tax rate, a huge expansion of the standard deduction, and a collapse of individual tax rates into three tax brackets instead of the current seven. (They have also proposed a possible fourth top tax bracket but haven’t put numbers to anything.)

While there is widespread consensus to cut taxes, Republicans are having a hard time deciding which loopholes, deductions, and benefits they are willing to do away with to pay for those cuts.

They are still in the process of floating — and shooting down — ideas. Last week it was a possible cap on 401(k) contributions, which Trump shot down over Twitter Monday. On Tuesday, the conference was back to debating the state and local tax deduction, which if scaled back could be a bring in a lot more revenue.

Meanwhile, in the Senate, tax-focused Senate Finance Committee, Chair Orrin Hatch (R-UT) has already said his committee won’t “rubber stamp” the House’s proposal — signaling differences between the chambers.

Still, Trump is under the impression that House and Senate are “pretty much in agreement” on tax reform, White House aide Marc Short told Vox. Not everyone in Congress is so certain.

“I don’t know that there is an agreement between those in the Senate and the House as to what the final product is going to look like,” the Republican lawmaker said.

This isn’t going to be easy

Ever since the GOP failed to repeal Obamacare, Congress’s first priority has been to push through a tax bill. But unlike with health care, Republicans can’t rely on punting the tough policy decisions down to the states.

And as Vox’s Matt Yglesias explained, there is a lot of room for disagreement:

Any industry that wants to save any provision only needs to find three GOP senators — or two dozen House members — to kill it. This is presumably why Republican leaders keep not naming names as they go through different iterations of their plan. But unless they find some way to actually reach agreement on the crucial topic of which loopholes, exactly, are going away, there’s just no way for their tax plan to move ahead.

Because of these challenges, Rep. Barton, who participated in the 1986 tax reform debates, said he’s “skeptical” tax reform can get done by the end of the year.

“I am one of the few people that was here in 1986 and we had the president of the United States strongly committed — Reagan — and the speaker of the House strongly committed, Tip O’Neill, and the Senate leadership strongly committed, and it barely passed and it took a year and a half, and it took several meltdowns,” Barton said.

How can something come together and get his vote this year?

“Well, you do a lot of praying,” Barton said.

Sign up for the newsletter The Weeds

Understand how policy impacts people. Delivered Fridays.