Tax Bill Thrown Into Uncertainty as First GOP Senator Comes Out Against It
Source: New York Times
Uncertainty gripped the Senate on Wednesday over efforts to pass a sweeping $1.5 trillion tax cut after a Wisconsin Republican became the first senator in his party to declare that he could not vote for the tax bill as written, and other senators expressed serious misgivings over the cost and effect on the middle class.
The House is set on Thursday to pass its own version of the tax bill, which would cut taxes by more than $1.4 trillion over 10 years and broadly rewrite the business tax code. But as with the health care debate earlier this year, the Senate emerged as the inconstant ally in President Trump’s pursuit of a major legislative accomplishment in his first year.
Senator Ron Johnson, Republican of Wisconsin, came out against both chambers’ tax plans on Wednesday, saying that the bills favored corporations over small businesses and other so-called pass-through entities, whose owners pay taxes on profits through the tax code for individuals.
“These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind,” he said in a statement. “Unfortunately, neither the House nor Senate bill provide fair treatment, so I do not support either in their current versions.”
Senators Susan Collins of Maine and Bob Corker of Tennessee have voiced their own concerns about the tax overhaul and have not committed to voting for the tax bill.
“I’m still working with folks to see if there’s some way to be assured as it relates to the deficit issue that we’re not going to create harm,” Mr. Corker said. “There’s other senators who themselves want to ensure that we’re doing something to strengthen our country relative to the deficits.”
He added, “I’m not a yes, I’m not a no.”
With the House expected to pass its tax legislation, the fate of the overhaul fell into the hands of Republican senators, who grappled with the political prospects of passing a bill that critics said could undermine the health care system and favored companies over the middle class. The Senate has played the spoiler before: The House passed a repeal of the Affordable Care Act in May, only to see it fail in the Senate twice.
Republican and Democratic senators clashed on Wednesday over changes the Republicans had made to their ambitious tax legislation late Tuesday night, including adding a provision to repeal the Affordable Care Act’s requirement that most people have health coverage or pay a penalty. Republicans also made the tax cuts for individuals temporary, to comply with Senate procedural rules requiring that the tax plan not add to the deficit after a decade.
Senate Republicans, eager for a major legislative achievement after the Affordable Care Act debacle, have generally been enthusiastic about the tax overhaul. But given the party’s slim 52-to-48 majority in the Senate, the reluctance of even a handful of Republican senators has left open the possibility that the tax bill will be further changed or face failure.
Beyond Mr. Johnson, the support of several other Republican senators was not assured, including the three who killed the party’s effort to repeal the health law this summer: Ms. Collins, John McCain of Arizona and Lisa Murkowski of Alaska.
“I want to see the whole package before I make a decision,” Mr. McCain said.
On Wednesday, Ms. Collins expressed concern that middle-income consumers could see their tax cut erased by an increase in health insurance premiums caused by the repeal of the requirement that most people have insurance, known as the individual mandate.
Other Republican senators, such as Mr. Corker and Jeff Flake of Arizona, are concerned about the national debt, which topped $20 trillion even before consideration of a tax plan that could add an additional $1.5 trillion over a decade.
As the Senate Finance Committee continued its formal drafting of the bill, Democrats attacked Republicans for inserting the repeal of the individual mandate and for imposing a 2025 expiration date for individual tax cuts, even as they would make the corporate tax cut permanent.
“This bill seems to get worse by the hour,” said Senator Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee. “This is not just another garden variety attack on the Affordable Care Act; this is repeal of that law.”
Repealing the health law’s individual mandate would allow Republicans to save more than $300 billion over 10 years, giving them more room to cut taxes. According to the Congressional Budget Office, it would also lead to a reduction of 13 million in the number of people with health coverage, and average health insurance premiums on the individual market would rise by about 10 percent.
Senator Orrin G. Hatch of Utah, the chairman of the Finance Committee, played down the move to make the individual tax cuts temporary, not mentioning that change in an opening statement during “markup” of the bill on Wednesday in which he defended his party’s right to undo the mandate. He later suggested that Republicans would be unlikely to resist if Democrats wanted to make those cuts permanent.
Mr. Hatch and Mr. Wyden raised their voices and spoke over each other as they clashed over the injection of health care into the tax debate, with Mr. Hatch at one point demanding that his leadership of the committee be respected.
“Let me be in control of this committee, not you,” Mr. Hatch said.
Another Senate panel, the Energy and Natural Resources Committee, voted on Wednesday to approve legislation that would open the Arctic National Wildlife Refuge in Alaska to oil and gas drilling — an opening long sought by Republicans but ardently opposed by Democrats and environmentalists.
That legislation is to be merged with the tax bill, which Republicans are planning to pass using special procedures that protect against a Democratic filibuster in the Senate. Under that strategy, the drilling measure would share the protection from a filibuster.
Allowing drilling in the wildlife refuge, known as ANWR, is a cherished goal of the energy committee’s chairwoman, Ms. Murkowski. Given her vote this summer against repealing the Affordable Care Act, Ms. Murkowski is once again a closely watched figure as the Senate plunges back into a debate over health care. But this time, with the prospect of opening the wildlife refuge to drilling, Ms. Murkowski has a major reason to vote yes.
“My whole focus this week, you’re going to be shocked to know, has been ANWR,” she told reporters on Wednesday, brushing aside a question about the individual mandate.
In the House, the biggest threat comes from Republicans in high-tax states like New York and New Jersey, who have fought to preserve the deduction for state and local taxes. The House bill allows the deduction of up to $10,000 in property taxes, but that provision has not been enough to win over a number of House Republicans.
If all House members vote and every Democrat opposes the bill, Republican leaders can afford to lose no more than 22 of their members for it to pass.
At least five Republicans from New York and three from New Jersey have come out against the House bill. Republican leaders could also lose votes from at least a few of their members from California, another high-tax state.
“It’s conceivable they could come up with some last-minute numbers that don’t look so bad,” said Representative Dana Rohrabacher, Republican of California. “But I did not go to my constituents and ask them to vote for me in order to increase their tax load, and the bill dramatically increases the tax load on a big chunk of my constituency.”