GOP senators are deciding whether to back an overhaul of the tax system
A repeal of the individual mandate to have health insurance is in their tax plan
Senate Republicans are poised to return after the Thanksgiving break and begin debating their tax bill on the floor, but don’t expect the body to move forward without a bit more controversy.
Despite a rapid move by the House to pass its tax bill out of the chamber this week with just 13 Republicans opposed, the fight in the Senate is expected to be more precarious. While the Senate Finance Committee advanced its bill out of committee late Thursday along party lines, one Republican, Sen. Ron Johnson of Wisconsin, has already announced he’s opposed to the bill as it’s currently written and Democrats are trying to mobilize their base against the bill now that it will include a partial repeal of the Affordable Care Act.
That leaves Majority Leader Mitch McConnell with little room to lose anyone else. To pass their bill, Senate Republicans need a majority of the vote, which means they can lose only one more member assuming Johnson stays a “no.” Already, Sen. Susan Collins, a Republican from Maine, has said she has deep reservations about including a repeal of Obamacare’s individual coverage mandate in the tax bill.
“I personally think that it complicates tax reform,” Collins told reporters earlier this week.
Sen. Rand Paul, a Kentucky Republican, remains a wild card on the bill and leadership is watching Sens. Bob Corker of Tennessee and Jeff Flake of Arizona, who have expressed concerns in the past about adding to the federal budget deficit with tax cuts and aren’t running for re-election in 2018.
“I met with Mnuchin today,” Corker told reporters earlier this week, speaking of Treasury Secretary Steven Mnuchin. “I continue to talk to the tax writers. I haven’t spoken to a single piece of policy on it. It’s just a broader picture of, you know, I just want to make sure this is something that is going to strengthen our country over time. But I haven’t taken a position on the bill yet. I’m still working with folks to see if there is some way to be ensured that, as it relates to the deficit issue, we’re not going to create harm.”
There is little argument on Capitol Hill that Republicans need a victory. It’s part of the reason many members predict they will be able to make the case and pass tax legislation in the end.
But getting the proposal through the Senate is just the first obstacle. Many House Republicans are also vocal with their concerns about the way the Senate tax bill is written and how the two bodies would combine the bills in a conference committee. Republicans fear that the bill, which fully repeals a popular state and local tax deduction for property, income and sales taxes, goes too far. Northeast Republicans, who have fought to preserve the state and local property deduction in the House, want to see the Senate adopt a provision that would at the very least allow people to deduct property taxes up to $10,000 like the House bill does.
Another sticking point is the structure of the Senate bill on the individual side. While the House reduces the number of tax brackets to four, the Senate bill maintains seven brackets. The Senate bill provides a more generous child tax credit and includes a repeal of the individual mandate. The House bill includes an immediate reduction in the corporate tax rate from 35% to 20%. The Senate bill delays that corporate tax rate by a year.
During a closed-door meeting with House Republicans on Thursday, members told CNN, President Donald Trump addressed some of the House’s concerns with the Senate bill and told the House GOP that the Senate would come along in the end.
“He made a couple of references to the Senate,” Arkansas Rep. Steve Womack said of Trump’s address Thursday morning to House Republicans. “He just said, ‘They’ll come around.’”
But the Senate has failed before. After trying multiple times to repeal and replace Obamacare, senators eventually had to move on to tax reform.
There is some concern – even among members who support including a repeal of the individual mandate in the Senate tax bill – that the Senate could be complicating its must-pass tax effort. The fact remains, however, that the GOP needs the money. To pass the measure under the Senate rules, the bill cannot increase the deficit outside the 10-year window, and repealing the individual mandate gives Senate Republicans $338 billion more to work with over a decade.