Senate Republicans got some sorely needed momentum behind their tax overhaul Tuesday as key GOP swing votes inched closer to backing the legislation — after Senate leaders launched a frenzied round of negotiations to convince the holdouts.
The Senate Budget Committee voted to advance the GOP tax reform bill on Tuesday on a party-line vote, with both Sens. Bob Corker (R-Tenn.) and Ron Johnson (R-Wis.) backing the measure a day after threatening to withhold their support. That critical vote came after President Donald Trump came to Capitol Hill to rally the troops in the tax battle.
Johnson voted for the tax bill after a back-and-forth with Trump during the lunch, according to multiple sources, over the Wisconsin Republican’s main concern: that the current proposal gives more benefits to corporations than to businesses that pay taxes through the individual system.
At one point, Johnson — who has persistently pressed his case for so-called pass-throughs to other senators — said jokingly that no one grandstands better than him, according to one senator who attended the lunch.
Corker, one of the fiscal hawks concerned about the deficit impact of tax cuts, said he was satisfied with details for a “trigger” to reverse tax cuts if economic growth fell short of projections in years to come. He expects details to be released Thursday.
“I’ve got details but I want to get it all sort of put to bed,” before disclosing them, he told reporters. “It’s an agreement in principle, a very strong agreement, with [Senate Majority Leader Mitch] McConnell, with [the] Finance Committee, and of course the White House has been in the midst of all this too.”
The agreement was primarily brokered between Corker and Sen. Pat Toomey (R-Pa.), a member of the tax-writing Finance Committee, according to one GOP source. The two key lawmakers struck an agreement in September on the overall price tag of $$1.5 trillion for the Senate plan.
Corker has also been working on the trigger idea with Republican Sens. Jeff Flake of Arizona and James Lankford of Oklahoma.
Corker said he believes there is a viable workaround if a trigger violates budget rules of the Senate that Republicans plan to use to pass their tax bill along party lines.
The Budget Committee vote became even more dramatic after Capitol Police were forced to escort multiple protesters out of the room. Chants of “kill the bill, don’t kill us” repeatedly disrupted the panel’s proceeding.
Despite Tuesday’s developments, Senate Republicans have a way to go before locking down at least 50 votes in favor of the tax bill. The GOP has not formally unveiled changes that would appease the likes of Corker, Flake and Lankford, as well as Johnson.
Several other Republican senators remain wild cards as the chamber races to a vote by the end of the week.
Earlier in the day, Senate Majority Leader Mitch McConnell, members of his leadership team, and key Senate Finance Committee Republicans met with Sen. Steve Daines (R-Mont.) — who, like Johnson, has concerns about the bill’s treatment of so-called pass-through businesses.
“It’s a challenging exercise,” McConnell said Tuesday. “Think of sitting there with a Rubik’s Cube trying to get to 50.”
Another critical Republican swing vote — Sen. Susan Collins of Maine — is seeking several provisions before she is willing to endorse the tax bill, including passage of separate legislation to stabilize the health insurance markets.
The tax bill includes a repeal of the Obamacare individual mandate that everyone carry health insurance, and Collins told reporters Tuesday afternoon that Trump committed to backing a stabilization measure from Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), as well as a bill from her and Sen. Bill Nelson (D-Fla.) to protect pre-existing conditions and use high-risk pools.
The commitments from the president came in a separate meeting with Collins, Alexander and Sen. Lindsey Graham (R-S.C.), Collins said.
“I think they’re eager to help me get to ‘yes,’” she said.
The moderate senator also said in an interview earlier Tuesday that she wants the top individual tax rate to remain at the current 39.6 percent, restore the state and local tax deduction on property taxes to aid those in high-tax states, and make the child care tax credit refundable “so it would help lower-income working families.”
She also wants to kill a proposal in the plan that would eliminate the ability of employees of the government as well as nonprofits, churches and others to make catch-up contributions to their 401(k) retirement plans, saying “this makes no sense whatsoever — we should be encouraging people to save for their retirement, and there seems to be a receptivity to fixing that provision.”
Meanwhile, Corker and other fiscal hawks have become increasingly vocal about their concerns that the bill might fall short of paying for itself, as its chief backers claim.
“If we could take the entire individual side of this, throw it in the trash can and take it directly to the incinerator, I would be thrilled,” Corker said on CNBC. “But I’m willing to swallow the individual side, which to me is not what it needs to be, to get the business side as long as we’re not increasing deficits.”
And the addition of the health care battle has further complicated matters. Top Democratic senators have said that every member of their 48-person caucus supports the stabilization measure, but that calculus is sure to change if Republicans are using the Alexander-Murray deal to try and mitigate the impact of repealing the individual mandate.
“You can’t sabotage the entire system and then say you’re going to do a small little fix on top of that sabotage,” Senate Minority Leader Chuck Schumer said Tuesday.
Senate Democrats from states Trump won handily signaled they felt little political pressure to support the current effort, though they walked a fine line between arguing the Senate’s tax reform bill could be improved on a bipartisan basis and shutting the door on supporting it.
“If you’ve heard the rhetoric that Democrats don’t want tax reform, that’s false,” said Sen. Joe Manchin (D-W.Va.). “We want tax reform. The country needs meaningful tax reform.”
Sen. Heidi Heitkamp (D-N.D.), who accompanied Trump to a tax reform event in her home state earlier this year, knocked the bill as “a moving target” that still contains a number of provisions that concern her, particularly tax cuts that it would benefit wealthy individuals more than they would benefit middle-class taxpayers.
“Every member of Congress is going to be a winner” under the current Republican tax bill, she said. “But I’ve got constituents who aren’t going to be winners who make a lot less than I do.”
When asked whether moderate Democrats might support the Republican tax reform effort at the end of the day, Manchin said Democrats “haven’t seen the final version” and noted that several Republicans remain on the fence.
“We think they’re still trying to find ways to get 51 votes,” he said. “We’re saying, why work on getting 51 votes, why don’t you work on getting 60 votes?”
The Senate budget panel was required to green-light the tax bill because Republicans are using a budget maneuver that would allow them to pass the bill with only 51 votes. Under those procedural rules, the committee could not substantially change the legislation before it heads to the floor for a full vote.
“Our work today is of a ministerial nature,” Budget Committee Chairman Mike Enzi (R-Wyo.) said during the markup.
Brian Faler and Sarah Ferris contributed to this report.
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