Breaking News: There is still no Senate tax bill and a vote could be just hours away - News Paper

Republicans are overhauling the nation’s tax code on the fly.

Senate Republicans don’t have a tax bill yet. But they plan to pass one Friday.

The majority is short on votes — nearly suffering a humiliating loss on a procedural vote Thursday — and desperately rewriting its tax overhaul mere hours before they plan to put it on the Senate floor for passage.

What’s being discussed? You could ask a half dozen senators and get a half dozen answers. Senators learned Thursday that a “trigger” proposal by Sen. Bob Corker (R-TN) to have automatic tax hikes if the federal deficit increases too quickly would not fly under the Senate’s “budget reconciliation” rules. That threw the whole plan into chaos.

Republicans are now scrambling for some way to reduce the bill’s $1 trillion price tag (even accounting for economic growth) and assuage deficit hawks like Corker and Sen. Jeff Flake (R-AZ) without losing any other senators. As they do, they will make decisions that would redirect hundreds of billions of dollars in the US economy over the next 10 years and then pass them hours later without any public hearing or expert input.

“It’s not the most elegant process. I would say that,” Sen. Susan Collins (R-ME), another vote that could be in doubt, told Vox Thursday.

Yet Senate Republicans plan to convene Friday and try to pass a plan. The centerpiece is still the same for now: A huge corporate tax cut and an individual tax overhaul that funnels most of its benefits to the wealthiest Americans. But the last-minute decisions that senators make will have far-reaching consequences for the US economy for years.

What we don’t know about the Senate tax bill right now

Everything is open for negotiation as Senate Republicans search for their elusive 50th vote.

The big trouble Thursday came when the Senate parliamentarian said that Corker’s proposal to “trigger” automatic tax hikes if the deficit grows too fast under the GOP tax plan is not permissible under the Senate rules. Corker, Flake and Sen. Ron Johnson of Wisconsin held a procedural vote open for an hour amid a scrum on the Senate floor as they negotiated a path forward.

All three agreed to keep the tax bill moving, but, afterward, no Republican senator seemed to be sure what exactly would be done to address Corker’s concerns about the deficit. They’re looking for $370 billion to $400 billion in savings, Sen. Thom Tillis (R-NC) told reporters.

A gradual corporate tax increase in later years is one possible option. But then there are other senators who would want to use that money for their favored amendments.

“Maybe there are some who think the rate should go up to fund the child tax credit. There are others who think the rate should go up to fund what appear to be revenue needs,” Tillis said. “But it’s a zero-sum game. What we’re trying to do is get everybody to a point where nobody’s gonna get exactly what they want but enough for us to get the bill passed.”

Significant changes are under discussion to assuage senators who are worried about pass-through businesses (Johnson and Steve Daines of Montana), the deficit (Corker and Flake), and the child tax credit (Marco Rubio of Florida and Mike Lee of Utah), as well as Susan Collins, the Senate’s most moderate Republican, who wants to alter the tax plan’s treatment of state and local taxes and to stabilize Obamacare.

Those changes could redistribute hundreds of billions of dollars in the US economy. One outside tax expert guesstimated a desired change for pass-through businesses would cost something like $55 billion over 10 years.

These are the other major issues still up for debate, beyond the deficit issue, as the Senate speeds toward a vote on its tax plan:

• The pass-through issue. Johnson and Daines have pushed to bump up the share of business income that owners of these pass-through businesses can deduct and exempt from taxation, from 17.5 percent to 20 percent. Now Johnson is saying he wants even bigger tax cuts by rolling back some of the tax benefits for larger corporations.
• The state and local tax deduction. The Senate’s bill would currently completely eliminate this deduction, to the tune of $1 trillion over 10 years. But Collins wants to allow people to continue deducting up to $10,000 in property taxes, which Trump is said to have agreed to.
• The Rubio-Lee child tax credit. The two senators want to further expand the child tax credit and pay for it by slashing the corporate rate slightly less (to 22 percent instead of 20 percent). That could cost, by one outside estimate, $200 billion or more. Trump is said to oppose this proposal.

That’s hundreds of billions of dollars at stake via details still being ironed out, behind the scenes, the night before the Senate plans to pass its bill.

Senate Republicans are struggling to lock up 50 votes

Republicans need 50 of their 52 senators to support the bill. By all accounts, and the actions they took Thursday, they don’t have them yet.

They dodged one bullet when Sen. John McCain (R-AZ), an iconoclast obsessed with process, said he would back the bill — despite such major last-minute revisions. That seemed to pave the way for the bill to pass, after all 52 Republican senators agreed to open debate on the tax plan Wednesday.

But then there was the near-disaster on a procedural vote — with Corker, Flake and Johnson holding their votes and holding the floor — that threw the entire enterprise back into doubt.

Corker and Flake still appear unsatisfied with the plan’s projected increase to the federal deficit. The Joint Committee on Taxation reported Thursday that the deficit would increase by $1 trillion over 10 years under the bill, even when you account for the economic growth they project it would spur.

Daines and Johnson are digging in on the pass-through issue. They want to provide even more tax relief to those small firms. Johnson told reporters Thursday he wants to eliminate state and local income tax deduction for corporations to pay for a massive additional tax cut for those firms.

His previous proposal to allow them to exempt 20 percent of their income from taxes, up from 17.4 percent, cost roughly $55 billion. Now he wants to bump that number to 25 percent, Johnson said.

“That would be a pretty good place to land from my standpoint,” he said, though he demurred on whether it would dictate his vote. “That’s all hypothetical.”

Those two camps appear at odds. Daines and Johnson want deeper tax cuts. Corker and Flake want to roll the tax cuts back to soften the impact on the deficit.

The wild card could be Collins, the senator from Maine.

She has been uneasy about repealing Obamacare’s individual mandate in the tax overhaul, which would lead to an estimated 13 million fewer Americans having health insurance and higher premiums. She also wants to allow people to continue deducting their state and local property taxes; the current Senate bill would not allow any such deductions.

Collins has said she is willing to overlook her health care concerns if Congress also passes two Obamacare stabilization bills. Experts say they wouldn’t fully mitigate the impact of repealing the mandate and Democrats have cast doubt House Republicans would pass them into law anyway.

But Collins has sounded positive after Trump signaled his support in a meeting earlier this week.

“I have a commitment from the president that he will help with the House,” she said. I’m still optimistic that we’ll get the agreement that I need.”

Yet she still isn’t quite committing.

"But I’m keeping my powder dry until we see.”

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Breaking News: There is still no Senate tax bill and a vote could be just hours away - News Paper