Tomorrow, House and Senate Republicans are expected to go to conference to resolve their differences on the Trump-GOP Tax Plan. While these differences don’t seem major at first glance, Republican leaders risk defections in both chambers depending on how they develop the final bill. And with Democrats fully united in opposition to the tax plan, Republicans can’t afford much of any margin of error.
Despite passage of House and Senate bills, conference is anything but a sure bet
If President Donald Trump signs some version of this tax plan into law, it will mark the most dramatic changes to federal tax policy in over three decades. On top of that, the Senate version makes major changes to the nation’s health care system by removing a key part of the Affordable Care Act (or Obamacare). Yet for such a consequential piece of legislation, it was pieced together so shoddily and in such a rush that the Senate bill was partially handwritten just hours before its passage.
This has made the conference process that much more difficult for Republicans. Now that Treasury Secretary Steven Mnuchin has admitted that the tax plan will not “pay for itself”, Republican leaders have to find a way to strike the right balance between Senate “deficit hawks” who prefer a lower cost tax package and House Freedom Caucus members who want larger tax cuts. In addition Senator Susan Collins (R-Maine) is threatening to vote against the final bill if it does not include her health care amendments, while Senator Marco Rubio (R-Florida) has demanded that the conference committee accept his proposed child tax credit or risk “problems” in securing his vote.
Contrary to Trump’s claims, it’s still not a “middle-class tax cut”
Since the 2016 campaign, Trump has promised “middle-class tax cuts”. Yet throughout the fall, the tax plan he’s championed has prioritized tax cuts for the top 1% of income earners while raising taxes on at least some middle-class households. This imbalance may be even more severe with the final bill, as Republican leaders in both chambers are near an agreement to lower the top individual tax rate from 39.6% to 37% and allow the corporate rate cut (from 35% to 21%) to kick in next year.
This disparity only worsens when the tax plan’s full impact on the federal budget is factored in. For one, it will trigger at least $136 billion in automatic budget cuts, including cuts to Social Security, Medicare, and Medicaid programs, immediately upon its passage. In addition, Republicans have eyed an additional $5.8 trillion in cuts over the next decade that would hit social safety net programs across the board. If House Speaker Paul Ryan (R-Wisconsin) gets his way in cutting social safety net programs to make up for lost revenue, the Trump-GOP Tax Plan will ultimately leave over 70% of Americans in worse financial shape than they are now.
Even if Heller and Amodei stay on board, will it be enough?
Late last month, Rep. Mark Amodei (R-Carson City) voted for the House version of the Trump-GOP Tax Plan. Earlier this month, Senator Dean Heller (R) was enthusiastic in his support for the Senate version. Thus far, both Nevada Republicans seem inclined to vote for the final bill as well.
But as long as all Democrats remain united in opposition, including Senator Catherine Cortez Masto (D), Rep. Dina Titus (D-Las Vegas), and Rep. Jacky Rosen (D-Henderson), Republicans can’t afford to lose very many more votes in either chamber. A House-Senate conference committee meeting has been scheduled for Wednesday, but Republican leaders have suggested that the final bill may not be released until Friday.
The White House and Congressional Republican leaders hope to pass the final tax bill next week, even as Congress inches closer towards its budget and debt ceiling deadline.
Cover photo by Martin Falbisoner, licensed under Creative Commons, and made available by Wikimedia.