Deficit a sticking point in Republicans’ budget plan
GOP has promised rewrite will be “revenue neutral.”
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 far-reaching change in the nation’s tax system.
Senate Majority Leader Mitch McConnell and Republican 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 former President 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.
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 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,
As lawmakers worked on a budget plan on Capitol Hill, President Donald Trump welcomed Malaysian Prime Minister Najib Razak to the White House. Trump praised Razak for his country’s investments in U.S. companies and thanked him for helping to fight the Islamic State of Iraq and Syria.
“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 revenue.
Underscoring the president’s desire for tax legislation, Trump hosted a bipartisan group of senators for dinner at the White House on Tuesday, including a trio of moderate Democrats from states Trump won last November and whose votes he’d like to have on a tax bill.
Democratic Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana were joined by Republican Sens. John Thune of South Dakota, Pat Toomey of Pennsylvania and Orrin Hatch of Utah, the White House said.
Manchin, Heitkamp and Donnelly are the only Democratic senators who did not sign a letter addressed to Republican leaders and Trump that said the Democratic caucus would not support a tax overhaul that cuts taxes for the “top 1 percent” or adds to the government’s $20 trillion debt.
Trump pitched Heitkamp on the overhaul at an event in her home state last week, calling her a “good woman.” Heitkamp said she needs to see the details first.
House action has been held up by a battle between moderates and conservatives over whether to pair spending cuts with the filibuster-proof tax measure. Senate action has been on hold while the House struggles.
On the budget panel, Sen. Bob Corker, R-Tenn., is hoping to limit the deficit cost of the tax effort, while Toomey is on the other end of the spectrum favoring more robust deficitfinanced tax cuts. GOP leaders have asked them to try to craft an agreement among the 12 budget panel Republicans. Any Republican defection on the budget plan would deadlock the narrowly divided committee.