Senate Republicans on Wednesday evening got the necessary votes to launch debate on the party’s measure to overhaul the U.S. tax code. But this came after a day of backroom deal-making by Senate Majority Leader Mitch McConnell that could lead to several major changes to the current version of the legislation.
The pressure on the Senate GOP is sky-high as the party looks to achieve at least one major legislative victory during President Donald Trump’s first year in the White House.
While there is strong optimism among Republicans that the Senate will eventually pass the tax measure, there are still several hurdles that need to be crossed.
The GOP cleared one of those barriers Wednesday after the chamber voted, 52-48, on the motion to proceed to the tax bill. But the biggest roadblocks remain.
The rules governing the fast-track budget procedure known as reconciliation that Republicans are using to advance the bill continue to complicate matters. And several members continue to have concerns over the legislation, as McConnell tries to wrangle the 50 votes necessary to pass the bill (assuming a tie-breaking vote from Vice President Mike Pence). At press time, the majority leader was expected to file a substitute amendment that could address some of the problem issues.
The largest policy disagreement appears to be over a “trigger” provision advocated by Sens. Bob Corker of Tennessee and James Lankford of Oklahoma that would change aspects of the bill if certain economic benchmarks are not met over the next 10 years.
Other GOP members and conservative groups such as the Club for Growth and Americans for Tax Reform have expressed concerns over such a proposal, though it is unclear whether those could force any members to vote against the overall bill.
“I personally prefer not to have a trigger,” Georgia Sen. David Perdue said. “You really don’t ever get 100 percent of what you want. And I don’t want to see this bill destroyed because of pursuit for perfection.”
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Senate Republican leadership spent Wednesday — including at the GOP lunch — discussing how to include it. Several options are under active discussion, senators say.
One proposal circulating would effectively claw back revenue through corporate tax hikes after several years if the tax cuts were to expand annual deficits beyond a certain threshold.
Another ties the trigger provision to a reduction in government spending instead of the tax cuts currently in the legislation.
But such a measure could run afoul of the reconciliation rules. A vote on the motion to proceed was delayed so leadership could work out language with the Senate parliamentarian that complied with the rules, according to Senate Republican Conference Chairman John Thune of South Dakota.
The portion in the tax bill that would open up drilling in the Arctic National Wildlife Refuge was also met with Byrd Rule problems, the set of parliamentary requirements designed to keep the measure within budget rules and named after the late Sen. Robert C. Byrd, D-W.Va.
That Energy and Natural Resources Committee language was adjusted to meet the budget requirements, and the rest of the technical issues were expected to be worked out either through the substitute amendment or in later amendments.
Republicans can make changes to the legislation in order to meet the reconciliation rules — something GOP aides say is expected — but it may have also accounted for the delay in the vote to proceed to the tax bill.
Leadership was also weighing a number of other possible changes to the bill to assuage some skeptical members.
Maine Sen. Susan Collins is pushing for the inclusion of a provision that would allow individuals to still deduct up to $10,000 in property taxes. The House-passed tax measure includes a similar provision, which was added after significant opposition to a complete repeal of the state and local tax deduction.
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Collins has also called for passage of separate health care bills to mitigate the negative impact of a provision in the tax plan repealing the individual mandate penalty under the 2010 health care law for failure to obtain health insurance coverage.
The nonpartisan Congressional Budget Office said in a letter Wednesday that passing a bipartisan measure from Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, D-Wash., would do little to soften the impact of repealing the mandate penalty, which the CBO said could result in 13 million fewer people with health insurance after a decade.
Preparing for Thursday
Meanwhile, other Republicans are beginning to line up their amendments for the eventual debate and vote-a-rama.
Sens. Marco Rubio of Florida and Mike Lee of Utah want to make the expanded child tax credit available to more low-income households by making it refundable against payroll taxes, which helps those with too little income to benefit. They also want to adjust the $2,000 credit for inflation annually.
To pay for the changes, Rubio and Lee would cut the income threshold above which the credit phases out for individual filers from $500,000 to $250,000, and raise the corporate tax rate in the underlying bill from 20 to 22 percent.
An updated version of the bill will also increase the amount of income pass-through business owners can deduct from a proposed 17.4 percent to 20 percent, according to Sen. Mike Rounds of South Dakota.
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“There has been some good progress for Main Street businesses in the tax cut bill,” Daines said. “I’ve seen enough progress to vote ‘yes’ to move the debate forward.”
When asked how the GOP will pay for the increase, Rounds said the existing bill provided enough revenue.
“Had some room,” he said.
Passage of the motion to proceed launched the 20 hours of debate in the chamber on the tax bill. Following that, the vote-a-rama process will begin during which nearly unlimited amendments can be offered by either party.
Ryan McCrimmon, Mary Ellen McIntire and Niels Lesniewski contributed to this report.