GOP leaders working to win over holdouts

WASHINGTON — Senate Republicans are seriously considering several last-minute changes to their tax legislation in an effort to mollify wavering members, four people familiar with the discussions said, as GOP leaders seek to keep their members from defecting ahead of crucial votes this week.

The lawmakers attracting the most concern from leadership and the White House are Sen. Ron Johnson, R-Wis., and Steve Daines, R-Mont., who say the current version of the bill favors corporations over other businesses.

There are numerous members demanding changes, and their needs don’t all overlap. Together, the requests put Republican leaders in a difficult position as they attempt to accommodate holdouts one at a time without losing other members or creating a situation in which the bill collapses under the weight of disparate demands.

Adding to the leaders’ difficulty, the total size of the tax plan cannot be more than $1.5 trillion over a decade, so adding new benefits could force Republicans to find ways to raise additional revenue. Presently, they only have roughly $80 billion in wiggle room to use, a small sum because many of the changes would be spread out over 10 years.

The four people spoke on condition of anonymity.

Johnson and Daines want changes to the bill they believe would help certain companies that file through the individual income tax code. These companies, often known as “pass-throughs,” can be small businesses but also include larger firms with many employees. There are millions of such companies in the United States, and they account for the bulk of U.S. firms.

Currently, in the Senate bill, these companies are allowed to deduct 17.4 percent of their income from their tax liability. Negotiators are looking at expanding that credit up to about 20 percent, two of the people said.

It’s unclear if Johnson would accept these changes as sufficient, and a final decision hasn’t been made. If Republican leaders believe Johnson’s demands have become too unreasonable, they could try and forge ahead without his vote.