Mystery about swing vote, not outcome
WASHINGTON — A day before Republicans are expected to begin voting on their $1.5 trillion tax cut, the big question was not whether it would pass but why the lone Republican Senate holdout, Bob Corker of Tennessee, suddenly flipped his position to support a bill he once said was fiscally irresponsible.
The theories varied from political to financial. Some suggested Corker, who has said that he will not seek re-election to the Senate, may be rethinking his political future, while others claimed he was bought off by a late-added provision that would benefit people with large real estate holdings, including him.
In an interview Monday, Corker dismissed those theories and said he faced a wrenching decision as a Republican lawmaker with deep concerns about the country’s mounting debt and a strong desire to overhaul the tax code. In the end, he said, he put his fiscal principles aside on the assumption that the nation would be better off with the tax cuts than without.
“It’s been really tough, especially because I did think, I really felt like we could have had a bipartisan bill that would have really withstood more fully the test of time,” Corker said.
“I talked to people that I respected. When I came here, I had concerns about deficits, but I also wanted pro-growth tax reform to occur, so I had this pull between the two, if you will,” he said, adding, “I just felt like this was a once-in-a-generation opportunity and if I looked at myself as the deciding vote, did I feel like our country was better having it in place or not better having it in place?”
His decision highlights the trade-offs that Republicans, who have long pushed for fiscal responsibility, are making as they seek to score their first legislative victory since assuming political control. The $1.5 trillion tax bill, which cuts taxes for businesses and individuals, is expected to add $1 trillion to the deficit over the next 10 years, according to the congressional Joint Committee on Taxation. Rather than pay for those cuts, lawmakers are relying on rosy assumptions about economic growth and suggesting they will cut spending on programs like Medicare and Social Security to help bring down the deficit.
Corker has been the most vocal about the need to rein in the federal deficit. He voted against the initial Senate bill, the only Republican to do so, after party leaders rejected his request to require automatic tax increases down the road if the overhaul did not generate enough revenue to pay for itself.
As recently as last Wednesday, Corker said the final changes being made to the combined Senate and House bill had done little to assuage his concerns that his party was being fiscally reckless.
“My deficit concerns have not been alleviated,” said Corker, who lamented that the bill could have been improved with more time.
On Friday, Corker stunned many in Washington when he said he would back the tax bill, which, while imperfect, would still be good for the country.
Opponents of the tax plan immediately searched for a motive in the hope that they could alter his vote in the narrowly-held Senate. With just a 52-48 majority in the Senate, Republicans have little room for defections given that Sen. John McCain, R-Ariz., is receiving medical treatment in his home state and is not expected to return to Washington in time for the vote. On Monday, two additional Republican senators, Mike Lee of Utah and Susan Collins of Maine, said they would vote yes.
As new details in the tax bill came to light over the weekend, an article published by the International Business Times suggested that Corker’s vote was won in exchange for a last-minute provision that would benefit real estate developers by making it easier for them to take advantage of a new, more generous tax structure for pass-through businesses, whose owners pay taxes on profits through the individual code.
Corker, who was active in the real estate business in Tennessee before becoming a senator, retains a financial stake in companies that could benefit from the change.
Critics of the Republican tax overhaul adopted a new rallying cry to criticize a bill that they say is packed with advantages for the rich: “The Corker Kickback.”
Corker, in the interview, called the accusations “disheartening” and said that he had not changed anything in the final bill.
“There’s nothing to buy me off with,” Corker said.
On Sunday, Corker sent a letter to Sen. Orrin G. Hatch, R-Utah, chairman of the Finance Committee, asking that he explain how the provision became included in the bill.
“Because this issue has raised concerns, I would ask that you provide an explanation of the evolution of this provision and how it made it into the final conference report,” Corker wrote. “I think that because of many sensitivities, clarity on this issue is very important and hope that you will respond in an expeditious manner.”
Hatch, in a letter issued Monday morning, defended Corker and said he was “disgusted” by reports that suggested Corker had played a role in the provision’s addition. He said Corker had wanted a less generous passthrough exemption than had been included.
“I am unaware of any attempt by you or your staff to contact anyone on the conference committee regarding this provision or any related policy matter,” Hatch wrote. “To the contrary, virtually all the concerns you had raised in the past about the treatment of pass-through businesses in tax reform were to voice skepticism about the generosity of various proposals under consideration.”
In fact, the Senate bill that Corker voted against already contained big benefits for the real estate industry. In large part, that is because of a provision cutting taxes for the owners of passthrough entities. Such businesses, like partnerships and limited liability companies, do not pay taxes themselves, but instead pass through their tax liabilities to their owners. Currently, such income is taxed at rates as high as 39.6 percent. But under the Senate bill, much of that income could be taxed at a rate as low as 29.6 percent. The bill limited those tax savings, partly by pegging the lower taxes to the size of a company’s workforce.