The Senate Tax Bill Has Something for Every Republican to Hate

  • Lawmakers warily eye their once-in-a-generation opportunity
  • Fleeting rate cuts, potential tax hikes loom in bill’s details
Ron Johnson of the Senate Budget Committee and a Republican from Wisconsin discusses the tax plan, Nov. 29.

Some Republican senators hate that they’re about to vote for a bill that cuts individual tax rates before raising them back in a few years.

Others hate that they might have to approve spring-loaded tax hikes if deficits increase. Some hate that large corporations would get a lower tax rate than family-owned businesses. And plenty of GOP senators hate that their once-in-generation opportunity to rewrite the tax code wouldn’t abolish the estate tax that conservatives detest.

And while most of them appear likely to support the legislation anyway, the animosity within the caucus toward certain elements of the bill underscores how precarious the path to approval is, particularly as key provisions continue to be negotiated and rewritten.

Senate Republicans voted Wednesday to begin debate on a bill that would cut taxes for corporations and -- at least temporarily -- for individuals, bringing them and President Donald Trump one step closer to a signature legislative victory. But as GOP leaders push toward a vote by week’s end, this much is clear: The bill has something for pretty much every Republican senator to hate.

“The individual stuff we’re doing -- I’d just as soon throw it in the incinerator and burn it,” said Senator Bob Corker of Tennessee, referring to a mix of tax cuts and tax hikes that would expire after 2025. “There are things in this bill I don’t like at all.”

The measure represents the product of rapid-fire compromises made to satisfy diverse policy demands and -- for eager tax cutters -- vexing fiscal constraints. Budget rules that prevent the legislation from contributing to long-term deficits resulted in a bill with a swath of temporary tax cuts. The White House and GOP leaders insist they’ll all be made permanent, but those are decisions for a future Congress.

Moving Target

More changes may come over the next two days as Republicans attempt to pass legislation that would affect virtually every American taxpayer’s wallet -- all within two weeks of rolling it out. It’s a moving target, testing the limits of what some lawmakers can decide to live with.

Senator John Kennedy of Louisiana declared Tuesday that he’d have to be “drunk” to vote for a so-called revenue trigger that would impose tax increases if needed -- a provision sought by Corker and other fiscally-minded Republicans in the event that the economy doesn’t grow enough to recoup the bill’s estimated $1.4 trillion revenue loss. The next day, however, Kennedy said he won’t draw “lines in the dirt.”

“I said if I voted for it, consider me drunk,” he told reporters. “And I may have to get drunk to vote for the bill.”

Senator Thom Tillis of North Carolina warned Wednesday that a trigger could be self-defeating: “The perverse consequence of having a trigger in here is that you won’t achieve the economic growth you otherwise would.”

‘Cocktail’ of Concerns

Meanwhile, Senator Susan Collins of Maine has said it’s a mistake to mix health care and taxes by zeroing out the Obamacare individual mandate. On Wednesday, she said she’s gotten assurances that Senate leaders will try to advance measures aimed at stabilizing health insurance markets. She also opposes lowering the 39.6 percent tax rate to 38.5 percent for people making over $1 million.

Senator Ron Johnson of Wisconsin said he’s troubled by the fact that large corporations are set to receive a far lower tax rate than would closely held businesses like partnerships; party leaders on Wednesday agreed to boost a proposed 17.4 percent deduction for such “pass-through” entities to 20 percent, short of the 25 percent Johnson wanted.

As senators gathered Wednesday evening for a procedural vote to begin debate on the tax bill, Johnson told reporters he might vote “no” because he wanted still more for pass-throughs. He voted yes, as did Collins. Neither has made a commitment on final passage, however.

“Susan’s got a concern -- it’s a real legitimate concern. Ron Johnson’s got a concern. There’s a deficit concern,” said Senator Lindsey Graham of South Carolina, who added that he’s trying to stay flexible: “It’s like making a cocktail. If you add more of this and less of that, I’m fine.”

‘Rubik’s Cube’

There’s one thing he can’t accept, he said. “Failure’s not an option.” Everyone has their problems with the legislation, he said, and “that’s what makes it probably a good bill.”

In a sense, that’s “just the way the process works,” said Senator James Risch of Idaho, who recounted a conversation with fellow Idaho Senator Mike Crapo.

“Mike, what are we going to do here? No matter how you vote on this you’re going to catch heck at home from one side or another,” Risch told him.

“That’s life here,” Crapo responded, according to Risch. Risch declined to reveal his biggest concerns about the bill.

“I don’t want to go there,” he said. “Ask me after it’s over.”

Senate Majority Leader Mitch McConnell, who can lose only two of his 52 members before the effort crashes, said this week that corralling them is a “challenge.”

“Think of sitting there with a Rubik’s cube, trying to get to 50,” he told reporters.

Kennedy said the GOP’s internal debate on taxes will be a dramatic change from the health-care deliberations that ended in September as the party failed to deliver on a seven-year promise of repealing Obamacare. He insisted that nobody should let the “perfect be the enemy of the good” in pursuit of reaching a solution.

“I’m not so arrogant that I think that I have all the answers,” the first-term Louisiana senator said.

— With assistance by Erik Wasson

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE