Republicans in Congress are keeping their tax plan moving right on schedule, with a quick-strike strategy and an uncanny knack for waving away the trade-offs that come with overhauling the nation’s tax code.
House Republicans passed their tax bill exactly two weeks after detailed legislative text was released. Senate Republicans are now preparing to take up their own plan later this week, so long as they keep defections to a minimum.
GOP leaders are cutting deals to keep 50 of their 52 members onboard and approve the tax legislation. The Washington Post reported on Monday that Republicans were weighing amendments to the tax treatment of “pass-through” businesses to win over the lone defector so far, Sen. Ron Johnson of Wisconsin, and to the bill’s overhaul of state and local tax deductions to keep other waving senators from opposing the bill.
Plenty of pitfalls lie ahead. But the tax plan has yet to encounter any hurdle it can’t clear or any concerns Republicans can’t dismiss. The GOP’s top priority, after the failure of Obamacare repeal, is charging ahead on momentum alone.
This is all in spite of the plan itself. Most Americans disapprove of the House and Senate proposals, according to new polling from Quinnipiac. Outside analyses have estimated that more than 25 percent of taxpayers would pay more by 2027 under the House bill. The Senate bill is projected to raise taxes on Americans making less than $30,000 a year starting in 2021. The Senate bill also includes a repeal of Obamacare’s individual mandate, which the CBO estimates will lead to 13 million fewer Americans with health insurance.
In the House, Republicans from New York, New Jersey, and California could have banded together to block the bill because the elimination of state and local tax deductions acutely hurts their constituents. But they didn’t. The House bill never appeared to be in danger of failing.
In the Senate, up next after the House passes their version, only Johnson has defected so far. Senate leaders are talking confidently about their ability to wrangle together a majority, even with their thin margin for error.
Overriding any specific concern is the GOP’s desperate desire to secure a major legislative victory and a truncated public debate that has prevented any sustained resistance from taking hold. Sweeping tax changes, at least for now, appear to be happening.
Republicans really, really, really want to get their tax plan done
Republican leaders and the rank and file have portrayed passing a tax overhaul as an existential issue after the failure to repeal Obamacare, the party’s other longstanding campaign promise.
“The way I see it, honestly, is we’ve got to get our job done,” House Speaker Paul Ryan (R-WI) said after this month’s Virginia elections, which many observers saw as an omen of a Democratic wave in 2018. “I think what people want to know and see is that this Donald Trump presidency and this Republican Congress makes a positive difference.”
Sen. Lindsey Graham (R-SC) put it more plainly late last month as the tax debate debate was picking up.
"Well, I think all of us realize that if we fail on taxes, that's the end of the Republican Party's governing majority in 2018," he said.
Congressional Republicans have been shockingly candid about their motivations, telling reporters that donors have said directly if the party fails on a tax overhaul, campaign contributions will dry up.
"My donors are basically saying, 'Get it done or don’t ever call me again,’” Rep. Chris Collins (R-NY) said recently.
To prevent a tax overhaul from suffering Obamacare repeal’s fate, Republicans have sought to move quickly and perfected their ability to disregard evidence from outside experts that their tax bill won’t achieve what they promised.
The House bill was introduced on November 2, a markup in the House Ways and Means Committee started four days later, and within two weeks, Republicans were putting the plan on the House floor for a vote.
The Senate bill moved equally fast. It was introduced on November 9, passed by the Senate Finance committee a week later and could be passed by the entire Senate less than three weeks after its introduction.
Amid that mad dash, lawmakers are making big promises about the tax legislation, suggesting it could add tens of millions of jobs to the US economy.
“If we can get 20 million people back to work, it’s going to be big,” Rep. Ted Yoho (R-FL) told Vox.
The independent analyses have been less rosy. A Penn analysis projected that the House bill would add up to 0.83 percentage points to the economy’s growth in 2027. A Tax Policy Center estimate found that the individual tax cuts in the House plan would overwhelmingly benefit the top 1 percent a decade from now. And meanwhile, millions of US households would eventually see higher taxes, as the New York Times detailed.
But that hasn’t deterred Republicans. They have simply insisted that every American would benefit, despite experts’ findings.
“It lets every American keep more of what they earned,” House Majority Leader Kevin McCarthy (R-CA) said, a claim that PolitiFact rated false.
By the same token, after months of promising revenue-neutral tax reform, both the House and Senate bills are projected to increase the federal deficit by more than $1 trillion. There, again, Republicans are simply dismissing the official findings, claiming that the economic growth spurred by the overhaul would erase any projected deficit growth.
“I think this tax bill is going to reduce the size of our deficits going forward,” Sen. Pat Toomey (R-PA), one of the primary architects of the plan, told reporters last week.
There has been nothing, so far, that can’t be explained away.
The tax plan still has some big obstacles to navigate
Speed has helped Republicans keep their tax plans moving. The House bill went from introduction to passage in two weeks. The Senate bill is on a similarly accelerated timeline. This is not the months-long debate that helped derail the Obamacare repeal crusade.
But ironically, health care could end up being the biggest hurdle lying ahead for Republicans, particularly in the Senate, where 50 of the 52 Republican senators must back the tax plan. They’ve already lost one for the time being, Sen. Ron Johnson (R-WI), who isn’t satisfied with the changes for small firms that are taxed as individuals, known as “pass-throughs.” Two more defectors would sink the current bill.
Now the Senate has added the repeal of Obamacare’s individual mandate to its tax legislation, a provision that the Congressional Budget Office estimated would lead to 13 million fewer Americans having health insurance by 2027 and a 10 percent increase in premiums.
Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK), who both voted down a health care plan this summer that did little more than repeal the mandate, expressed their reservations about mixing health care with taxes after the change was announced.
“Tax reform is complicated enough, and when you add health care reform in at the same time, it continues to complicate it,” Murkowski told reporters.
But neither of them has committed to voting against the tax plan over the issue either. Murkowski in particular has a big reason to vote for the tax bill: It would also open up the Arctic Wildlife Refuge for more oil and gas drilling, a longstanding goal of Alaska politicians. Collins is also the target of last-minute changes to state and local tax deductions, according to the Post.
Other possible defectors — like Sens. Bob Corker (R-TN) and Jeff Flake (R-AZ), who are worried about the federal deficit — are still on the fence too. Corker aides sounded optimistic on Monday that their boss will ultimately be able to support the final bill.
Corker staff says he has worked over break with admin and senators to get tax bill changed. "While more work remains, all parties are hopeful that the final bill will be good for our country.”— Manu Raju (@mkraju) November 27, 2017
One final wild card will be Sen. John McCain (R-AZ), who has at times been fixated on bipartisanship and regular order. He already showed in the health care debate that he is willing to buck the party if he isn’t satisfied with the product or process.
But with Obamacare repeal, it was easy to identify as many as a dozen “no” votes at times. The tax bill also has to thread a narrow needle, but Senate Republican leaders have thus far prevented a critical mass of their conference from jumping ship. Even Johnson, who also blanched at the health care bills periodically, could still be won over.
If both chambers do pass a tax bill, they will still have to reconcile their differences. Touchy issues like the state and local tax deduction and Obamacare repeal could complicate those conference negotiations.
But over the course of two weeks, congressional Republicans have set themselves to get this win. Their dreams of passing a major tax bill by the end of the year suddenly don’t seem so farfetched.