Treasury Secretary nominee Steven Mnuchin waits after a meeting with Senator Orrin Hatch (R-UT) on Capitol Hill December 8, 2016 in Washington, DC. / AFP / Brendan Smialowski        (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Mnuchin: Majority, not 100 percent, get tax cut
02:30 - Source: CNN

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House Republicans this week are expected to vote on their tax bill

Business groups say they largely support GOP tax overhaul efforts

CNN  — 

Republicans aren’t hiding a key part of their motivation to pass tax reform in the weeks ahead: if they don’t do something – anything– the donor class could abandon them and imperil their chances of keeping the majority in 2018

In a candid moment last week, Rep. Chris Collins conveyed out loud what many members have been thinking for months.

“My donors are basically saying, ‘Get it done or don’t ever call me again,’” the New York Republican told The Hill.

Republicans have pursued their tax agenda with breakneck speed in recent weeks all in the name of delivering a tax cut to the American people before the New Year, but politics is the major and motivating factor for a party struggling to overcome the perception that it has done little since their stunning election victory last November.

This week, House Republicans are expected to vote on their tax bill despite some frustration among northeast Republicans that the bill could hurt their constituents. And senators are beginning to mark up their bill in the finance committee. Whether or not Republicans will ultimately be able to overcome divisions and pass a bill still remains to be seen, but there is no arguing that the party isn’t motivated.

Sen. Lindsey Graham, a Republican from South Carolina, also warned that the “financial contributions will stop” if the GOP failed on tax reform.

“The party fractures, most incumbents in 2018 will get a severe primary challenge, a lot of them will probably lose, the base will fracture, the financial contributions will stop, other than that it’ll be fine,” Graham told reporters, according to NBC News.

Republicans have a lot of support to keep pushing their plan forward. The GOP’s tax plan – unlike its many iterations of Obamacare repeal bills – has won praise from key constituencies and even some surprising corners of the party. The Chamber of Commerce is backing the bill and the National Federation of Independent Business reversed its initial position on the House bill and announced it would back the plan Thursday. But even major groups against the bill may not be able to slow its progress down given the urgency members are feeling to deliver something or face a freezing of donations in the midterms.

After nearly a year in office, Republicans aren’t hiding their anxiety that they still haven’t delivered a major legislative priority. Especially after Democrats won big in New Jersey and Virginia last week, members are paralyzed with fear that failure on tax reform could lead to cataclysmic losses in the midterms.

“If we don’t produce, it’ll get worse,” Graham told CNN after the election. “People don’t see our majority as being effective.”

Fears of losing support from the donor-base have been fermenting for months on Capitol Hill. Ever since Sen. John McCain, a Republican from Arizona, famously cast the deciding vote against a bill to repeal Obamacare, it was donors who were giving members an earful.

“The donor class like most of the activist class has concluded that the inaction of this administration and Congress is totally unacceptable and they need to see progress toward legislative goals that were talked about during the course of the campaign,” Josh Holmes, a former chief of staff to Senate Majority Leader Mitch McConnell, told CNN.

Independent of the policy implication of the tax bill, which would lower the corporate rate to 20% as well as provide other perks to businesses like full expensing, donors are clamoring for Congress to simply pass something as a way to prove that their financial contributions to secure a Republican majority in the House, Senate and White House were worth the investment.

“I think good government is good politics,” said Sen. Roger Wicker, a Republican senator from Mississippi whom former Trump chief strategist Steve Bannon has threatened to unseat.

This week will be a major test for the party. While leadership has been able to hold a usually fractured conference together rhetorically so far, voting is an entirely different proposition. Republicans still need to find enough votes to pass the tax bill out of House of Representatives and handful of Republicans from New Jersey and New York are still fighting to restore a popular state and local tax deduction.

Alfredo Ortiz, the president and chief executive officer of the Job Creators Network, joked to CNN that the donor class will be paying close attention this week.

“When it comes to the donor class, I jokingly say this: A lot of these donors are RINOs in the sense that they are Republicans In Need of Outcomes,” Ortiz said.

This story has been updated.