US President Donald Trump (R) and Russia's President Vladimir Putin talk as they make their way to take the "family photo" during the Asia-Pacific Economic Cooperation (APEC) leaders' summit in the central Vietnamese city of Danang on November 11, 2017.
World leaders and senior business figures are gathering in the Vietnamese city of Danang this week for the annual 21-member APEC summit. / AFP PHOTO / POOL / JORGE SILVA        (Photo credit should read JORGE SILVA/AFP/Getty Images)
Mnuchin: 'Trump is not getting played'
01:13 - Source: CNN

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CNN reports House Republicans enter this week in a good place on tax reform

The Senate finance committee kicks off it markup Monday afternoon

CNN  — 

In the House, a harried behind-the-scenes effort to lock up the votes to pass their tax proposal on the floor.

In the Senate, a harried public effort to hammer through potentially hundreds of amendments to approve their tax proposal in committee.

Should GOP leaders accomplish their goals in both chambers over the next five days, this could be called the most successful legislative week in President Donald Trump’s tenure.

Should either of these efforts go off the rails, well, time to prep the talk of a possible health care 2.0.

The mood in the House:

According to several senior GOP aides and rank-and-file lawmakers CNN spoke with on Sunday, House Republicans are entering this week in a good place. Rounds of early check-ins with conference members throughout the weekend yielded positive results, two sources said.

“We figured we’d head into this week needing some help to get this across the line,” one aide told CNN. “As of now, it looks like we might not. But four days is a long time.”

When is the vote:

As of now, leaders plan to put this bill on the floor Thursday. That is subject to change.

Whom to watch: California Republican House members

Leaders know anywhere between five and seven New York lawmakers are “no” or “leaning no.” A handful of New Jersey lawmakers are right there with them.

The issue isn’t new – the partial repeal of the state and local tax deduction, which disproportionately hits their high-tax states. But leaders can survive losses in those two states.

It’s the California delegation everyone needs to keep their eyes on this week. They stuck with Republicans, largely out of loyalty to majority leader (and fellow Californian) Kevin McCarthy. But several GOP districts in California – represented by some of the most endangered GOP lawmakers in the conference – come from districts that would also be hit hard by this repeal.

Publicly, besides Rep. Darrell Issa, who is already a “no,” the state delegation has largely held its fire. If they can be held in the “yes” column, the bill should have a clear path. If those lawmakers (think people like Reps. Ed Royce or Mimi Walters) bail, then Republicans have a real problem.

The payoff:

Rep. Tom MacArthur, a New Jersey Republican, voiced significant concerns about early iterations of the bill, yet suddenly came around early last week on the grounds that the repeal of the alternative minimum tax meant the SALT repeal wouldn’t harm his district as much as he first suspected. That made him a “yes.” And voila, Ivanka Trump and Treasury Secretary Steve Mnuchin will be in his district Monday morning for a tax event.

And yet:

As of this moment, based on the regular check-ins from the GOP whip team, leaders feel like they are still doing well with their California members. The behind-the-scenes sell has been intensive – district-by-district polling from the White House political operation and the Republican National Committee has been provided to lawmakers. They have been given economic analysis for each of their districts showing that, on net, their constituents will benefit overall in the near-term.

The key is, and has always been, the ability to convince rank-and-file members that the plan in its entirety is more valuable than any one coveted provision. This week will finally show whether the positive response leaders have gotten thus far can hold, or whether those coveted provisions – and the interests and political pressures behind them – can finally take hold and cause problems.

If things start to go south:

House GOP leaders are ready. They’ve deliberately left open the possibility that House Ways and Means Chairman Kevin Brady would introduce substantive changes to the bill when it reaches the Rules Committee on Wednesday. At this point, it appears they may not be necessary. But if that changes, the door is open to address individual concerns/buy off those on the sidelines.

How this will work:

The GOP whip team has been doing constant checks on the rank and file in recent days, but tonight will be the first “hard whip” effort when lawmakers return to Washington. This will be a very important moment – they’ll find they are either on a good path or have work to do. And that will dictate the next few days.

The dirty secret:

House GOP lawmakers aren’t displeased the President has been out of the country for this whole process. His team has been very engaged – from providing polling data and economic analysis to answering question and receiving concerns, they’ve been there through it all. But several aides have noted the President’s absence, along with generally not playing public role in selling the bill, as a net positive at the moment.

“Our guys can breathe a bit,” was how one aide put it. The same aide noted that when it comes down to it, they’ll need the President to sell the bill to the public.

But for the moment?

“Why mess with something that’s working?”

Across the Capitol:

The Senate finance committee will begin the markup of the chamber’s GOP proposal this afternoon. What kind of an experience will that be? Well, here are the 355 amendments that have been filed for consideration.

How the Senate bill was received:

There’s no question changes will be made – Senate finance GOP staff acknowledge the bill, as it currently stands, violates the Byrd Rule when it comes to adding to the deficit outside of the first decade. That, of course, would mean Republicans couldn’t pass the bill in the Senate with a simple majority. Staff pledged that would be fixed during the committee process.

Republican health care plans: Understanding the ‘Byrd Bath’

Along those lines, Sen. Ted Cruz has voiced concern about the full repeal of the SALT deduction, along with concerns that while the bill reduces taxes, on average, in every income group, millions would still see their taxes go up. Sens. Marco Rubio and Mike Lee want the Child Tax Credit, boosted to $1,650 and eligibility expanded in the Senate proposal, boosted to closer to $2,000. Sens. Jeff Flake and Bob Corker still have concerns about the bill’s affect on the deficit.

BUT: there is no outright opposition. No Republican is pledging to oppose the measure out of the gate. No party factions are holding out on specific items that would make the bill a non-starter for others. Does this have a clear path forward? Hardly. Senior GOP aides expect problems to arise and believe several members are just holding their fire for the moment. But man, oh man, is this a different experience for GOP leaders than health care.

Read the full Joint Committee on Taxation analysis of the Senate GOP bill.

What to watch in the Senate finance committee:

Keep an eye on any amendments offered by Finance Committee Chairman Orrin Hatch of Utah. His amendments, like Brady’s in the House, will be the most substantive and designed explicitly to iron out Byrd Rule problems, along with the political and policy problems in their conference.

As for the Democrats

As in the House, the amendment list posted by Senate finance appears to make clear that Senate Democrats will be offering amendments mainly to make Republicans take difficult votes. Everyone is still keeping a close eye on politically vulnerable 2018 Democrats like Joe Donnelly, Heidi Heitkamp and Joe Manchin to see if they show any willingness to get on board with the GOP plan. Republican leaders aren’t counting on that, but if any or all of those lawmakers open the door to changes that could get them on board, aides make clear Republicans will jump at the chance. A bipartisan bill, no matter by how slim a margin, certainly is a better sell than a partisan version.

Also, keep an eye on this:

As CNN has reported several times, GOP leaders want no part of adding in a repeal of Obamacare’s individual mandate into this process. They are still bleeding from the brutal health care failure and are terrified that adding in something that the Congressional Budget Office says would lead to millions fewer having health insurance.

But as the Senate deals with Byrd Rule issues, and as the House continues to look for ways to plus-up provisions targeted at easing the tax burden on various middle-class income groups that analyses show will see tax increases in the latter part of the decade, the $338 billion in deficit savings a repeal would create over 10 years is very attractive. Of note: The very influential Wall Street Journal editorial board got behind the idea this weekend.

And bookmark this, too:

One area that could create major problems in the House is, well, the Senate. That’s precisely why you saw House Speaker Paul Ryan explicitly commit to the bill going to conference late last week. And that’s why you saw Brady explicitly say that the House wouldn’t accept anything less than the SALT compromise (keep the property tax deduction, capped at $10,000) they worked out with their members.

Nothing will create bigger problems, faster, than word going around that the House is going to be forced to eat whatever the Senate ends up with. House leaders are going above and beyond to say that won’t happen. (Sidenote: they said the same thing on the budget. The House ended up eating the Senate version.)

And finally, are Republicans on track to meet their deadline?

Yes. The House has always been scheduled to pass their bill this week, the Senate the week after Thanksgiving. Then conference. At this moment, they are still on that schedule. Yes, things could change quickly.