Trump Adds Democrat to Tax Roadshow With a Seat on Air Force One

  • President repeats promise to cut taxes and simplify the code
  • Details of a revamp remain scant; basic questions still linger

Trump Says It's Time to Lower Taxes

President Donald Trump will bring his pitch to overhaul the tax code to North Dakota on Wednesday with an unlikely guest in tow: the state’s Democratic senator, Heidi Heitkamp.

Heitkamp, who is facing re-election next year, will join the rest of the state’s congressional delegation aboard Air Force One as they travel to the capital of Bismark, where Trump is planning to argue that his proposed cuts are worthy of bipartisan support.

Heidi Heitkamp

Photographer: Andrew Harrer/Bloomberg

Trump will point to North Dakota’s history of cross-party support for reductions to the tax rate, according to speech excerpts provided by the White House.

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"I want all of America to be inspired by the North Dakota example," he will say. "This state is a reminder of what can happen when we promote American jobs instead of obstructing them.”

The inclusion of Heitkamp on the trip is intended as, at least, public outreach to Democrats to assist in the tax push after a series of legislative defeats, including the effort to repeal and replace Obamacare, that came after some Republican lawmakers joined a unified Democratic opposition. But Republican leaders have rejected Democratic demands not to advance tax legislation through the reconciliation process, which would allow them to bypass a Senate filibuster and pass a bill on a partisan basis.

Presidents have long used flights aboard the iconic aircraft as a treat to woo over crucial swing votes on pivotal legislation; former President Barack Obama would often travel to the home districts of House members he needed as he pursued the Trans-Pacific Partnership trade deal.

Traditional Approach

The White House has attempted a more traditional sales effort for the tax legislation, holding weekly strategy meetings within the administration as congressional and White House negotiators work to flesh out the tax code’s overhaul. The administration has held weekly conference calls with outside conservative political advocacy and business groups, and on Tuesday Trump huddled with the advisers and congressional leaders shepherding his effort on Capitol Hill.

“We’re going to cut taxes,” Trump vowed during a Roosevelt Room meeting with the so-called Big Six tax negotiators -- National Economic Council Director Gary Cohn, Treasury Secretary Steven Mnuchin, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and the leaders of the congressional tax-writing committees. "We’re going to reduce taxes for people, for individuals, for middle-income families. We are going to reduce taxes for our companies. And those companies are going to produce jobs."

Cohn will be making the trip with Trump, according to a senior White House official.

Administration officials said before the meeting that they didn’t expect it to produce any major policy breakthroughs, but instead serve as a kickoff to congressional efforts to flesh out tax principles the leaders released in July. Details of a revamp remain scant, with basic questions like where corporate and individual rates will be set unanswered.

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Trump stuck to well-practiced talking points when reporters were invited in for a portion of the meeting, repeating admonitions that the tax code should be “as simple as possible” and that a tax cut would produce “millions of new jobs.”

Carry On

White House press secretary Sarah Huckabee Sanders, in a statement, described the meeting as "productive" and said the group "agreed that committee activity should continue so that Congress can move to mark-ups on legislation as expeditiously as possible."

The visit to North Dakota is the second time in as many weeks that the president has used his travel to single out vulnerable Democrat facing a tough re-election battle in 2018. Last week, Trump made his first major speech on taxes in Missouri, and said if Democrat Claire McCaskill didn’t support his push, “you have to vote her out of office.”

On Wednesday, Trump will ask voters to "deliver a clear message" if "Democrats continue their obstruction," according to the excerpts provided by the White House.

"Do your job to deliver for America or find a new job," Trump will say.

Tough Decisions

The White House has said that a dramatic cut to the corporate rate is essential to fostering the kind of economic growth Trump promised on the campaign trail.

But lawmakers are already facing a crowded legislative calendar, including efforts to fund the federal government, increase the nation’s debt borrowing authority, and pay for recovery efforts in the aftermath of Hurricane Harvey. That agenda got even fuller earlier Tuesday when the president announced his plan to end the Deferred Action for Childhood Arrivals, or DACA, program, which offers protection to immigrants who were brought to the country as children without documentation. Administration officials say they now want Congress to act on DACA.

Trump is scheduled to meet Wednesday with the bipartisan leadership of both the House and Senate.

Even if lawmakers didn’t face an incredibly busy and politically charged schedule, there remain a series of tough decisions to make on a tax overhaul.

Finalized Blueprint

House Ways and Means Chairman Kevin Brady declined to go into specifics when asked what progress had been made toward agreement on tax changes in August. He also declined to say whether any specific decisions had been made by the tax leadership in Congress and the Trump administration over the recess. 

"Every day we work on driving the rates lower, both for middle-class families and for businesses of all sizes," he told reporters.

House Freedom Caucus Chairman Mark Meadows said Republicans still haven’t received any guidance from leaders on what corporate, individual or capital-gains tax rates will be. He said it’s important for "real specifics" to be decided by the end of September, "so that we’re actually debating the legislative text so we can pass it out of the House."

Slashing the rate for corporations and so-called pass-through entities to 15 percent -- the goal Trump has set -- could cost more than $2 trillion over 10 years, according to the Washington-based Tax Foundation think tank. If tax changes are to be permanent, any cuts have to be accompanied by offsets such as the elimination of loopholes. So far, White House officials and congressional leaders haven’t provided many details about ways to offset cuts, aside from eliminating state and local tax deductions.

Politico reported that Trump continued to push for dropping the corporate tax rate to 15 percent at Tuesday’s meeting despite opposition within his party and the conclusion of most of his negotiators that it will end up between 20 and 25 percent.

45 vs. 1

Democrats are also likely to object to changes that would benefit the richest taxpayers, with 45 senators signing a letter earlier this year saying they wouldn’t support a bill including tax cuts for the top 1 percent.

Tax policy experts have said the dozen bullet points the White House released in April outlining its principles would undoubtedly mean lower taxes for top earners, while the effect on middle incomes was less clear. The plan calls for cutting the top income-tax rate to 35 percent from 39.6 percent; eliminating the Alternative Minimum Tax, which raises the tax bills of certain taxpayers on the higher side of the income scale; and repealing the estate tax, which applies to individuals with estates worth more than $5.49 million. However, it also would eliminate state and local tax deductions, which tend to benefit high-income filers in Democratic states.

Supporters of the president’s tax push say they expect additional details on the measure to be released soon, although Cohn declined to commit to a precise timetable during an interview with Bloomberg Television last week.

“We’re now working with House Ways and Means Committee and Senate Finance Committee to really finalize what that blueprint will look like,” Cohn said. “That’s going to get released in the next -- whatever -- weeks or months as those committees get together and finalize all of the details.”

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