Trump’s tax overhaul keeps Congress waiting
WASHINGTON — Eight weeks ago President Donald Trump said he would be releasing a “phenomenal” tax plan within two or three weeks. But there’s no sign of a plan yet, and mixed signals from the White House are imperiling Republican promises of speedy action.
The administration hasn’t yet publicly answered the most basic questions about what a possible tax reform plan would look like. Will it pay for itself with offsets or add to the deficit? Trump hasn’t said.
White House Press Secretary Sean Spicer has emphasized that job creation and economic growth are priorities — an indication that controlling costs may not be Trump’s primary concern. That could render any tax cuts temporary, meaning they’d expire after 10 years under Senate budget rules.
If the plan must pay for itself, where will that money come from? That too is unclear.
There’s also broad disagreement among Republicans and within the White House over whether to move forward with a border-adjusted tax on companies’ domestic sales and imported goods. House Speaker Paul Ryan strongly favors such a tax because it would encourage domestic manufacturing, and help pay for lower rates for companies and individuals. It has the backing of Trump’s senior adviser Steve Bannon, but the president himself hasn’t weighed in, and other senior advisers, including Treasury Secretary Steven Mnuchin and National Economic Council head Gary Cohn, are said to oppose it.
Amid that disagreement, the administration has begun reaching out to Democrats to seek support — a move that might only aggravate Republicans’ discontent.
Last week, Trump was briefed by his top economic advisers on a variety of other potential tax measures, including a carbon tax and a valued-added tax, which are highly unpopular among Republicans. The White House issued a statement this week saying those taxes weren’t really under consideration — an indication of just how early in the process the administration is.
“I think what we’re trying to sort out is whether the president has a deal in mind or if he wants to cut any deal and declare victory,” said Doug Heye, a former aide for House Republican leadership and the Republican National Committee. “Tax reform is an enormous challenge on its own. More consistent direction from the White House would certainly help congressional efforts.”
White House spokeswomen didn’t respond to emailed requests for comment.
Initial market euphoria that Trump’s election would lead to a once-in-a-generation opportunity to completely rewrite the tax code has begun to give way to more sober assessments, especially following GOP divisions that thwarted the Obamacare repeal effort. Kevin Brady, head of the tax-writing House Ways and Means Committee, said in November that Congress would be ready to act on tax legislation in the first 100 days of the new administration.
Now, Brady is saying that while his committee still intends to introduce legislation in the spring, there isn’t a specific deadline for action.
“Tax reform is incredibly difficult. It is not easy,” Brady told reporters earlier this week. “It is for lawmakers and Congress and the White House, the challenge of a lifetime.”
“I think what they’re going to do is play ‘Celebrity Apprentice,’ tax-reform style,” said Harold Hancock, who served as tax counsel for six years on the Ways and Means Committee before joining law firm McGuireWoods LLP last month. “They’ll see what the House does, see what the Senate does,” then make a decision about what to do, he said.
Spicer has tried to manage tax timing expectations during recent press conferences. “We’re at the first stages of the process” and “beginning to engage with Congress,” he said on March 30, adding that the timeline could be “several months.”