Senate GOP struggling with deficit
After failing to dismantle Obamacare, tax code overhaul a priority for Trump
WASHINGTON - Senate Republicans are struggling with how many billions of dollars President Donald Trump’s tax code overhaul will add to the deficit as they work on a GOP budget plan that’s a prerequisite to any farreaching change in the nation’s tax system.
Senate Majority Leader Mitch McConnell and GOP members of the Budget Committee met Tuesday with two top Trump administration officials to make progress on forging the budget plan, which is required to stave off potential Democratic blocking tactics and pass the subsequent tax bill only with GOP votes.
The as-yet-undrafted bill to overhaul the tax code is the top priority for Trump and Republicans after the collapse of their effort to dismantle Barack Obama’s health care law. Trump’s top economic adviser, Gary Cohn, and Treasury Secretary Steven Mnuchin met with McConnell, R-Ky., and budget panel members.
“From my standpoint, let’s set ourselves up for success on tax reform,” Sen. Ron Johnson, R-Wis., a member of the committee, said before the meeting.
The meeting ended in late afternoon without specific proposed numbers for the size of the budget coming forward. Not wanting to show disappointment, participants stressed that it was intended to be preliminary.
Finance Committee Chairman Sen. Orrin Hatch said afterward that the group, which discussed the broad outlines of the deficit trade-off for a new tax bill, had not reached an agreement. Hatch, R-Utah, said he expected more information to come soon.
Mnuchin signaled ahead of the meeting that the administration would be open to changes sought by lawmakers to improve the chances for passage of a tax overhaul this year. In an interview with CNBC, Mnuchin also said the administration would “absolutely” consider making tax cuts retroactive to the start of this year if overhaul legislation didn’t pass until 2018.
In addition, the administration would consider including an infrastructure spending bill as part of the tax legislation, Mnuchin said.
“This is a pass-fail exercise,” Mnuchin said, indicating that the critical goal was to enact legislation. “Passing tax reform, which hasn’t been done in 31 years, that is a win,” he said.
Capitol Hill Republicans have promised that the tax rewrite will be “revenue neutral” and not add to the nation’s $20 trillion-plus debt, but they are in fact counting on budget maneuvers to find hundreds of billions of dollars to help maximize cuts to corporate and individual tax rates. For starters, they are going to assume the tax legislation will mean higher economic growth and greater future tax revenues.