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Republican Tax-Cut Dreams on Hold as Lawmakers Grow Frustrated With Trump

Updated on
  • White House has yet to offer details on offsets for tax cuts
  • Trump says ‘our bill is moving along’ despite lack of progress

House Republicans are growing frustrated with the lack of any details about the Trump administration’s tax plan, as the slow pace leaves lawmakers in limbo in their negotiations over how to deliver on long promised tax cuts.

Republicans in both chambers are leery of getting out ahead of the White House, but a member on the tax-writing Ways and Means Committee said the prospect of a detailed White House plan emerging soon was akin to the chances of spotting a unicorn.

The pessimism on Capitol Hill stands in sharp contrast to President Donald Trump’s public promises. 

“Our tax bill is moving along in Congress and I believe it’s doing very well,” Trump said Thursday after announcing that the U.S. would pull out of the Paris climate deal.

But no tax bill has been introduced -- or even circulated -- and Republicans who strongly support Trump and are desperate to advance some kind of tax bill fret that the White House is falling far behind. The White House’s only public contribution to the debate has been a one-page outline released in late April that included trillions of dollars in individual and corporate tax cuts that would explode the deficit and lacked details on how to pay for them.

White House economic adviser Gary Cohn wouldn’t say Friday during a Bloomberg TV interview when a detailed tax plan would arrive. He said the White House is “actively engaged” with House and Senate leaders to craft a consensus plan so there’s “uniform buy-in” by the time it’s released, and added that the White House is working as hard as it can to complete the task by the end of 2017.

In a separate interview Friday on Fox Business, Cohn indicated a timeline for a White House proposal: “We will have a very detailed, drafted tax plan to be delivered to Congress by when they get back from the August recess,” he said.

The Republican lawmaker on the Ways and Means panel, who spoke on condition of anonymity, said there have been lots of meetings between White House officials and key lawmakers, but the Trump administration’s approach so far feels like amateur hour.

Awaiting Details

The lawmaker said the conversations have mostly involved educating the White House and Senate about the House proposals, which include a controversial border-adjusted tax on imports championed by House Speaker Paul Ryan. The lawmaker said he was hoping to see details this week on an emerging White House plan, but officials said there is currently no plan for the White House to present anything.

The Trump administration and top Senate Republicans have made clear they don’t favor the border-adjusted tax proposal, as well as other components of the House GOP blueprint. But they haven’t proposed alternative mechanisms to offset their plans to cut personal and corporate tax rates.

“No one wants to make clear what the tax plan will look like,” said Representative Dave Brat of Virginia, a conservative who is chairman of the Small Business Subcommittee on Economic Growth, Tax, and Capital Access.

Brat said he has asked during recent House Republican meetings for a vote count on the border-adjusted tax, also known at BAT, "because we cannot wait for three weeks and then find out that that is a poison pill and come up $1 trillion short."

Jonathan Traub, a former staff director for Republicans on the Ways and Means Committee who is now a managing principal at Deloitte Tax LLP, said, “It is becoming clearer to House leaders that the border-adjusted tax is not going to become law.”

‘No Plan B’

“There’s some frustration that there’s no Plan B that anybody else has yet developed,” Traub said. “The House is frustrated that the White House and Senate keep taking shots at the BAT” but then don’t propose a way to prevent tax loopholes or avoidance strategies, he said.

Under rules that Senate leaders plan to use to pass a tax bill with only a simple majority, the legislation would have to be revenue-neutral for its changes to be permanent.

“I’m a little confused as to what the endgame is on these efforts by the House, Senate and White House to get on the same page on reform,” Traub said. “I’ve not seen visible signs that they’re closer to a deal than they were a month ago.”

The crowded congressional calendar will also reduce the time available to work on a tax bill. Senate Republicans are prioritizing health-care legislation, which may not finish by the August recess. After the break, Congress faces deadlines to avert a government shutdown, raise the debt limit and extend expiring programs like the Children’s Health Care Program. It also needs to agree on spending levels before proceeding to the vehicle for a tax bill.

‘Not Trump’s Specialty’

Many key Senate Republicans are waiting for the White House to lay out some of its parameters. House Ways and Means Chairman Kevin Brady, meanwhile, is exploring an alternative plan, according to the lawmaker on the panel, but he isn’t willing to unveil the details yet because it could spark a backlash from the White House and Senate Republicans.

Arthur Laffer, the influential supply-side economist, defended Trump’s slow decision-making on the details of a tax plan.

“It is not Trump’s specialty area,” he said. “I think he’s doing a great job of trying to adjust to new information.”

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