GOP tries to keep spotlight on taxes amid Mueller charges

GOP tries to keep spotlight on taxes amid Mueller charges
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The long-awaited Republican proposal to overhaul the tax code is now competing with special counsel Robert Mueller’s investigation into potential ties between President Trump’s campaign and Russia.

GOP lawmakers insist the jolt to Washington from Mueller’s probe doesn’t hurt their efforts to rewrite the tax code.

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The House Ways and Means Committee is set to release their tax bill on Wednesday, and GOP leaders have said they hope legislation passes Congress by Thanksgiving. They got a boost last week when the House approved a budget resolution that allows the tax bill to avoid a Democratic filibuster.

But they have little room for error.

“Just because the runway is clear, doesn’t mean there isn’t turbulence in the atmosphere,” said Sage Eastman, a former GOP Ways and Means Committee aide who now works as a lobbyist at Mehlman Castagnetti. “The landing just got a little bumpier.”

Since May, Mueller has been investigating Russia’s involvement in the 2016 election and other matters that could arise from the inquiry.

The first charges stemming from the probe were announced on Monday, with prosecutors unsealing a 31-page indictment against former Trump campaign chairman Paul Manafort and his former business associate, Richard Gates. The pair, who pleaded not guilty, are accused of money laundering relating to work they secretly did on behalf of a pro-Russia political party in Ukraine. The Trump campaign is not mentioned in the indictment.

Prosecutors also revealed Monday that former Trump campaign foreign policy adviser George Papadopoulos has pleaded guilty to lying to FBI agents.

The charges dominated media coverage to start a week that is expected to mark a major milestone for tax reform — which Republicans hope to be their signature legislative accomplishment this year.

President Trump on Sunday suggested that the latest developments in Mueller’s investigation could be aimed at dampening or distracting from the tax efforts.

He tweeted: “All of this ‘Russia’ talk right when the Republicans are making their big push for historic Tax Cuts & Reform. Is this coincidental? NOT!”

Republicans tried to keep their focus on taxes Monday.

White House press secretary Sarah Huckabee Sanders began Monday’s briefing by talking about the tax efforts, rather than the new charges. She attempted to explain tax reform through a long-winded story involving beer.

Speaker Paul RyanPaul Davis RyanMcConnell names Senate GOP tax conferees House Republican: 'I worry about both sides' of the aisle on DACA Overnight Health Care: 3.6M signed up for ObamaCare in first month | Ryan pledges 'entitlement reform' next year | Dems push for more money to fight opioids MORE (R-Wis.) told a Wisconsin radio show on Monday that “nothing’s going to derail what we’re doing in Congress.”

At the end of the day, Republicans are hungry for a legislative win after their failure to repeal ObamaCare.

The pressure for a major accomplishment ahead of the midterms could limit the effect that the Russia investigation or any lobbyist pushback could have.

Tax-reform proponents on and off Capitol Hill also said they would move forward as before.

“I think we’re here to do our job, and that’s going to be our focus,” said Rep. Vern BuchananVernon Gale BuchananMORE (R-Fla.), a senior Ways and Means Committee member.

Anti-tax crusader Grover Norquist of Americans for Tax Reform said that “the media will be over looking at shiny things, or what they consider to be shiny things … and we’re going to get a tax cut through.”

Some suggested that the media’s focus on the new charges could be beneficial for GOP lawmakers as they work through some of the difficult trade-offs involved in crafting a tax bill.

“It may actually take the spotlight off of Congress as they do their wheeling and dealing and horse-trading to actually make that happen,” said GOP strategist Ford O’Connell.

Sean Neary, a former Senate Finance Committee aide to former panel chairman Max BaucusMax Sieben BaucusBooker tries to find the right lane  Top Lobbyists 2017: Hired Guns GOP tries to keep spotlight on taxes amid Mueller charges MORE (D-Mont.), echoed a similar sentiment.

“Maybe it will give a little bit of freedom to the tax-writing committees to concentrate on putting together a bill,” he said.

Neary said that there are many hurdles to passing a tax bill, but he doesn’t see the charges as a threat.

“There’s no shortage of challenges, there’s no shortage of obstacles for tax reform, but I just don’t think the Manafort issue is one of them,” he said.

Republicans are facing mounting obstacles on their tax efforts as they work to nail down the specifics of their legislation.

The National Association of Home Builders (NAHB) on Saturday came out against the tax bill because it was not going to include a tax credit for mortgage interest and property taxes.

NAHB had expressed qualified support for the GOP’s tax framework when it was released in September, but reversed course after learning from Ryan and Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyRyan pledges 'entitlement reform' in 2018 Senate approves motion to go to tax conference Overnight Finance: GOP delays work on funding bill amid conservative demands | Senate panel approves Fed nominee Powell | Dodd-Frank rollback advances | WH disputes report Mueller subpoenaed Trump bank records MORE (R-Texas) that its proposal for a tax credit would not be part of the initial legislation.

The bill is expected to keep the mortgage-interest deduction but also nearly double the standard deduction. That would translate to fewer people claiming the deduction, with most of those still claiming it likely to be higher earners.

“We think that that’s an ineffective and inappropriate way to give out tax expenditures,” NAHB CEO Jerry Howard said.

Brady said in a statement over the weekend that he hopes lawmakers continue to examine the idea of a homeownership credit.

Other rumored aspects of the bill could also generate pushback.

Potential changes to the tax treatment of retirement savings plans have drawn concerns from Trump, the financial industry and lawmakers on both sides of the aisle.

GOP lawmakers are also reportedly considering phasing in a lower corporate tax rate. Sanders was asked about that on Monday and said that Trump’s priority is to slash the corporate rate to 20 percent right away.

But tax-writers are also taking steps in an effort to get more lawmakers on board. Brady announced over the weekend that the bill would include an itemizable property-tax deduction, which could help ease the concerns GOP lawmakers from high-tax states have had over the repeal of the state and local tax deduction.

Republicans know they want to hold the House and make gains in the Senate, and “they see tax reform as the primary vehicle to do that,” O’Connell said.