Serving veal with a side of tax reform

Trump dines with lawmakers

Post-Gazette Washington Bureau

WASHINGTON— Tax reform was on the White House table alongside breaded veal, salad and pie Tuesday night.

President Donald Trump broke bread with seven Senate Republicans and three Democrats, with the ultimate goal of breaking ground on tax reform that will reduce rates, eliminate deductions and encourage repatriation.

U.S. Sen. Pat Toomey, RPa., who was among the guests, emerged optimistic that Congress would reform the tax code this year, although perhaps not by the end of the month as the president as urged.

“The president really strongly stressed his interest in getting a really good pro-growth tax reform done as quickly as we can,” Mr. Toomey said. “The goal is before Christmas to have a tax bill on the president’s desk, and I still believe that’s doable.”

Mr. Trump’s core priorities, which Mr. Toomey shares, are cutting business taxes to make U.S. companies more competitive, eliminating taxes on income generated by overseas subsidiaries, and reducing middleclass taxes.

“It was a great discussion,” Mr. Toomey said, “a very productive evening.”

After failing to repeal the Affordable Care Act, Republicans have made tax reform their top priority.

Lawmakers haven’t yet put forward a detailed plan, but Mr. Trump has promised one that would cut taxes for individuals, corporations and pass-through companies. He also wants it to eliminate some tax deductions and to use tax incentives to encourage repatriation, which is the return of foreign profits to the United States without high taxes.

Mr. Toomey said specific deductions were not discussed over dinner, but Mr. Trump has previously said he wants to eliminate the mortgage-interest deduction. Democrats including U.S. Rep Mike Doyle of Forest Hills say the move would disproportionately harm the middle class, which spends a big portion of income on home ownership.

Republicans might not need Democrats’ support if they make the changes through a budget reconciliation bill, which would allow passage with only 51 votes in the Senate instead of 60.

They will, though, need support of nearly everyone in their 54-member caucus. That could be tricky for a party that couldn’t coalesce around a plan to repeal the Affordable Care Act.

Mr. Toomey is a pragmatic and respected senator who could bring his colleagues along on tax reform even though he couldn’t do it as one of the chief architects of the Senate ACA repeal plan, said G. Terry Madonna, a political scientist and pollster at Franklin & Marshall College.

“He’s somebody who is a staunch conservative who has a deep understanding of [budget and finance issues], so he might be able to persuade other Republicans,” Mr. Madonna said.

At the same time, he hasn’t been the kind of unconditional supporter Mr. Trump likes to surround himself with and has not often been part of the president’s inner circle. Including him in Tuesday’s discussions was a practical move by a president who really wants to get tax reform done, Mr. Madonna said.

Other Republicans who attended included Ron Johnson of Wisconsin, Orrin Hatch of Utah and John Thune of South Dakota.

Democrats who attended were Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana. All up for re-election and from states that voted Trump last November, the three were the only Democrats who withheld their signatures from a letter last week that outlined their caucus’s priorities for tax reform.

“It was great to be engaging the Democrats that were present in the discussion, and they did participate,” Mr. Toomey said Tuesday night. “They definitely wanted to see a net tax cut for middle-class families.”

As a principle, that falls in line with Republican goals, too, but in the end, the details could make a difference, he said.

While most of the evening was spent discussing tax reform, the president and his guests also briefly discussed other issues including health care, which Republicans continue to work on quietly, the senator said.

“We’re not going to stop the trains and start wrestling with it again,” he said, “but if at some point it looks like a consensus is emerging for one of the ideas that is being developed, then I think we’d go back to it.”

For now, the focus is squarely on tax reform.

The House and Senate could vote this month on separate bills that then would be reconciled in a conference committee later in the fall.