Republican Senator Says He Can't Support Tax Bill That Balloons DebtBy , , and
Lankford of OK: assumptions about growth must be reasonable
VP Pence says ‘right kind’ of cuts could power 3.5-4% growth
Republican Senator James Lankford of Oklahoma said he can’t support the party’s tax-overhaul bill if it increases the U.S. debt too much, showing the challenges of passing the sweeping measure that many forecasters say will blow out the budget deficit.
Lankford said any assumptions about the economic growth that tax cuts in the bill would generate have to be reasonable, and that “I am a ‘no”’ if the measure balloons the debt.
“It’s one thing to be able to cut taxes,” Lankford said on NBC’s “Meet the Press” on Sunday. “It’s another thing to be able to say, ‘How are we going to deal with our debt and deficit?”’
Vice President Mike Pence said on Fox’s “Sunday Morning Futures” that “the right kind of tax cuts” -- including an immediate, not phased-in, reduction in the corporate tax rate -- can produce sustained growth to 3.5 percent and even 4 percent. House Majority Whip Steve Scalise said on the same show that 4 percent economic growth or more was achievable.
The Joint Committee on Taxation, the official congressional scorekeeper, projected a roughly $1.41 trillion revenue loss from the bill without factoring in macroeconomic assumptions. The Republican budget allows for as much as $1.5 trillion in new deficits over a decade.
House Speaker Paul Ryan said on “Fox News Sunday” that the tax bill will help grow the economy, adding less to the deficit than is otherwise accounted for in the bill.
Ryan said the lesson learned from the failed push to repeal and replace President Barack Obama’s health-care law was to coordinate with the Senate and “then move together.” The difference between the bills from the two chambers will be small, he said.
The House tax plan released on Nov. 2 doesn’t pay for itself through growth, according to an analysis by the right-of-center Tax Foundation. Accounting for economic growth from tax reductions would trim a projected 10-year revenue loss of $1.98 trillion over 10 years to $989 billion, the study found. The foundation attributed the discrepancy between its forecast and that of the joint committee to to differences between their models.
Over the long run, the bill’s changes would lead to a 3.9 percent higher gross domestic product, which would create 975,000 full-time equivalent jobs and would lead to wages that are 3.1 percent higher, according to the analysis.
Ryan said the House is on track for completing work in its bill by Thanksgiving. The Senate will unveil its bill as early as this week.
Cutting taxes for businesses, thus encouraging them to pay higher wages, hire more workers and invest in equipment will “jump start” the economy, Representative Tom MacArthur, a New Jersey Republican, said on Fox’s “Sunday Morning Futures.”
MacArthur said he supports capping deductions for property taxes paid at $10,000 and eliminating the Alternative Minimum Tax, calling it “a high win for middle-class taxpayers” in states such as New Jersey.
Speaking on ABC’s “This Week” program on Sunday, House Freedom Caucus Chairman Mark Meadows said he’s willing to vote to increase the deficit because, in his assessment, economic growth will outweigh it over time.
“Even though we are looking at increasing the deficit in the short run, over a fifteen year period, it appears that we could actually have these tax cuts paid for because of economic growth,” Meadows said.
(An earlier version of the story corrected the Fox show on which MacArthur appeared.)
— With assistance by Sahil Kapur, and Erik Wasson