Senate Republicans consider a future tax increase in their tax bill after report shows current measure drives up deficit by $1 trillion – By Erica Werner, Mike DeBonis & Damian Paletta (Washingtonpost.com) / Nov 30 2017
BREAKING: Senate Republicans are considering a future tax increase in their tax bill after a report showed that the current measure would drive up the deficit by $1 trillion.
The Republican plan for a massive tax overhaul steamed toward a Senate vote Thursday, even as a nonpartisan congressional scorekeeper said the plan would fall short of GOP claims that it would pay for itself.
A Joint Committee on Taxation analysis released Thursday afternoon, after senators had already taken initial votes on the bill, concluded the bill would add $1 trillion to the national deficit over a 10-year period, even after the economic growth the bill is projected to create is taken into account. The new tax revenue from that growth would only offset about a third of the plan’s cost, the analysts found.
Later Thursday, the Senate parliamentarian ruled they could not use one plan they’d considered to address the bill’s impacts on the federal budget, ruling it did not comply with the Senate procedures Republicans want to use to pass the bill.
Sen. Bob Corker (R-Tenn.), who has said he won’t support legislation that adds to the deficit, had pushed for the bill to include a “trigger” provision that would automatically bump up taxes if certain economic growth targets weren’t met. But the idea was controversial among conservatives and appeared dead Thursday after the parliamentarian’s ruling.
“It doesn’t look like the trigger is going to work,” Sen. John Cornyn (Texas), the second-ranking Republican in leadership.
The ruling left the GOP searching for answers on how to win over Corker and fellow deficit hawks. One option under consideration included automatic tax increases that would kick in six or more years in the future, regardless of how fast the economy is growing.
On Thursday morning, Corker said the pending release of the new JCT analysis — known as a “dynamic score” — could affect the negotiations. And he insisted he could not accept a $1 trillion addition to the deficit.
“To the extent that dynamic scoring is less than that, that’s the gap that needs to be made up,” he said.
Still, Republicans moved closer to getting the support they need to pass the bill in a closely divided Senate, as they picked up support from Sen. John McCain (R-Ariz.) on Thursday morning, narrowing the number of holdouts.
But GOP leaders projected optimism about passing the $1.5 trillion legislation through the Senate on Thursday evening or Friday, a major step forward as President Trump and GOP leaders seek to overhaul the U.S. tax code for the first time in three decades.
“This is not a perfect bill,” McCain said in a statement, “but it is one that would deliver much-needed reform to our tax code, grow the economy, and help Americans keep more of their hard-earned money.”
McCain’s stance on the legislation had been uncertain, and leadership had eyed him warily after he unexpectedly sank their efforts to repeal the Affordable Care Act over the summer with a theatrical thumbs-down on the Senate floor.
Republican leaders have little margin for error in the closely divided Senate, where just three defections can sink the bill, as Democrats unanimously oppose it.
[Do Senate Republicans have the votes to pass their tax bill?]
Sen. Ron Wyden (D-Ore.), the top Democrat on the tax-writing Senate Finance Committee, said the late-breaking JCT analysis of the bill’s economic effects — which Republicans have been touting for months — illustrates a mistaken approach.
“This isn’t tax reform at all,” he said. “This is now just a grab bag full of goodies for multinationals and donors and special interests.”
GOP leaders, though, have brushed off the criticism for weeks. Senate Majority Leader Mitch McConnell (R-Ky.) told reporters Thursday, “We’re certainly optimistic. As you know we had everybody on board to take the bill up. I think everyone is trying to get to yes.”
In a sign that Republicans expect the Senate to clear the bill this week, House Majority Leader Kevin McCarthy (R-Calif.) on Thursday told lawmakers in that chamber to return to Washington a day earlier than scheduled next week to cast votes on Monday night to begin the process of resolving differences between the House and Senate bills.
“I strongly encourage all members to be here, present and voting,” McCarthy said on the House floor.
Of the 52 Republican senators, there were just a handful whose stances remained uncertain or undeclared as of early afternoon Thursday, most prominently Sens. Susan Collins (Maine), Ron Johnson (Wis.), Jeff Flake (Ariz.) and Corker.
Senators are still debating where the money would come from for that change, as well as other changes other Republicans are seeking. Sen. Marco Rubio (R-Fla.) was trying to increase a child tax credit. To do so, he would slightly decrease the size of the tax cut the bill proposes to offer corporations. Under the current version of the bill, that rate would drop from 35 percent to 20 percent.
House conservatives were drawing a hard line on that issue. “We have consistently said as low as possible but no higher than 20 percent,” said Rep. Mark Meadows of North Carolina, chairman of the House Freedom Caucus, referring to the corporate tax rate.
Collins was working on several issues, including partially restoring the ability of taxpayers to deduct state and local taxes from their federal tax bill. Flake said he was waiting for a few answers.
Johnson still has not said whether changes made by leadership were enough to satisfy his concerns about the treatment of so-called pass-through businesses, whose owners pay taxes through the individual code rather than at corporate rates. Johnson retains partial ownership of one such business and wants better treatment for them.
Overall, the legislation represents a massive change for the tax code that delivers huge cuts for corporate America and the wealthy, while the benefits for individuals are mixed or in some cases nonexistent, according to multiple nonpartisan analyses.
The Senate GOP tax bill would slash the corporate tax rate from 35 percent to 20 percent, starting in 2019. It would also create incentives for multinational companies to bring foreign earnings back to the United States. And it encourages businesses to invest more, allowing them to immediately expense the cost of things like new equipment and machinery.
The bill would temporarily cut taxes on families and individuals, lowering tax rates and expanding the amount of income that isn’t subject to taxation. It would also, temporarily, expand the child tax credit for families earning less than $1 million. But it would also cut back on many tax breaks, prohibiting people from deducting the taxes they pay to states and localities.
[38 percent of Americans won’t get a sizable tax cut under the Senate GOP plan]
Importantly, the bill would also repeal a central element of the Affordable Care Act, which creates penalties for Americans who don’t have health insurance coverage. This is a major plank in President Barack Obama’s signature legislative achievement, and the Senate language, if signed into law, would mark the biggest GOP legislative success in paring back that law.
This change would create more than $300 billion in budget space because of the money that would be saved in Medicaid spending and other programs, but it would also lead health insurance premiums to increase and more than 13 million fewer people to have health insurance in several years, according to the Congressional Budget Office.
Democrats railed against the legislation, calling it a giveaway to corporate America that fell fall short of being the middle-class tax cut Republicans promised.
“Senate Republicans are writing a bill that gives huge tax cuts to the richest people in this country,” said Sen. Sherrod Brown (D-Ohio).
The bill also polls poorly. But Democrats appeared powerless to stop it as Republicans pushed it forward in desperate pursuit of a political win after failing to pass any major legislation so far this year despite controlling the White House and both chambers of Congress.
PB/TK – Of course it’s not the perfect bill, there’s no such thing as a perfect bill. For a bill to be perfect it would have to affect everyone equally, no favoritism to anyone or any entity. But is adding another trillion dollars + now an additional trillion to the deficit in hopes of “trickle down economics”…. err sorry apparently that’s a bad term to use… adding to the deficit in hopes that tax reform helps business add jobs (which many large corporations said they won’t), helps business give paychecks (which many business said they will give back to stockholders instead) and helps people consume more (if tax reform passes it will be after the holiday season when people freakout looking at their credit card bill or bank statement). Wouldn’t be nice to see Congress pay off the deficit, save money and let people put money away for retirement instead
