GOP nears initial victory on tax reform

House Republicans are on the precipice of a big victory on tax reform, but the legislation still faces enormous hurdles before it can reach President Trump’s desk and be signed into law.

Legislation is expected to receive a vote on the House floor this week after clearing the tax-writing Ways and Means Committee in a party-line vote with no GOP defections.

At this point it would be a surprise if Republicans weren’t able to pass the bill through the House.

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The number of Republicans publicly opposed or leaning against the bill is in the single digits, and Speaker Paul RyanPaul Davis RyanUSCIS chief Cuccinelli blames Paul Ryan for immigration inaction Soaring deficits could put Trump in a corner if there's a recession Paul Ryan moving family to Washington MORE (R-Wis.) appears poised to meet his ambitious timeline of having the tax bill introduced in early November and passed by Thanksgiving.

“I do believe that the momentum continues to move us forward,” Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, told The Hill.

He said Republicans can’t afford to hold off the bill after the failure to approve ObamaCare repeal. Last week’s losses in off-year elections across the country just added urgency for Republicans.

“It will be difficult for members who voted against ObamaCare repeal to go 0-for-2 on their campaign promises,” Walker said. “I’d look for a huge vote.”

An amendment Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyRepublicans' rendezvous with reality — their plan is to cut Social Security The Social Security 2100 Act is critical for millennials and small business owners House panel releases documents of presidential tax return request before Trump MORE (R-Texas) added to the bill on Thursday bolsters the odds of a successful House vote.

The amendment created a new 9 percent tax rate for some small-business income — earning the support of the National Federation of Independent Business, which panned the initial House bill. It also restored the adoption tax credit, a top priority for conservatives.

“It definitely made the bill stronger,” said Rep. Jason Smith (R-Mo.), a member of both GOP leadership and the tax committee.

Brady noted that these changes were inspired by the suggestions of GOP lawmakers on the committee. He said he heard from every one of the panel’s Republicans that they needed to provide more help for small businesses, and he noted that Reps. Diane BlackDiane Lynn BlackBottom line Overnight Health Care: Anti-abortion Democrats take heat from party | More states sue Purdue over opioid epidemic | 1 in 4 in poll say high costs led them to skip medical care Lamar Alexander's exit marks end of an era in evolving Tennessee MORE (R-Tenn.) and Mike KellyGeorge (Mike) Joseph KellyHouse votes to repeal ObamaCare's 'Cadillac tax' GOP lawmaker: 'I'm a person of color. I'm white.' Trump signs bipartisan IRS reform bill MORE (R-Pa.) have been big champions of the adoption tax credit.

Following the markup, Republicans on the Ways and Means Committee were upbeat.

GOP vote-counters predicted the tax bill would attract between 225 and 230 Republican votes — well above the 218 votes needed to pass it. Republicans will pick up another “yes” vote on Monday, when Rep.-elect John Curtis (R-Utah), who backs the tax plan, takes the oath of office.

“We feel really good,” one White House official told The Hill. “A bill will pass the House next week for sure.”

The handful of GOP lawmakers who have come out against the bill are mostly from high-tax blue states who are concerned because the bill does away with most of the state and local tax (SALT) deduction.

“My message to our leadership is it is a matter of fundamental fairness that [the SALT deduction] be preserved and that there shouldn’t be winner states and loser states,” said Rep. Leonard LanceLeonard LanceBottom Line Push for ‘Medicare for all’ worries centrist Dems Incoming Dem lawmaker: Trump 'sympathizes' with leaders 'accused of moral transgressions' MORE (R-N.J.), a top Democratic target in 2018 who is whipping “no” on the bill.

Others haven’t committed yet to supporting the bill. Some conservatives have expressed concerns about the fact that the measure keeps the top tax bracket at 39.6 percent and creates a “bubble rate” above that for some income of high earners in order to claw back the benefits of the 12 percent bracket for the wealthy.

Rep. Andy Biggs (R-Ariz.), a member of the hard-line House Freedom Caucus, told The Hill on Friday that he was still undecided.

He said there are "a lot of really good things in the bill" and was happy to see the adoption tax credit restored. But he also wished the bill's tax cuts were retroactive and thinks that Congress should ensure that every taxpayer sees a rate reduction.

"I'm a little bit disappointed that we're not eliminating the clawback provision," he said. 

Biggs added that he's "hopeful that the process continues to be open to changes."

Rep. Warren DavidsonWarren Earl DavidsonConservatives call on Pelosi to cancel August recess GOP leaders struggle to contain conservative anger over budget deal The 27 Republicans who voted with Democrats to block Trump from taking military action against Iran MORE (R-Ohio), another Freedom Caucus member, said on Twitter Friday that he’s still looking at taxpayer scenarios under the bill.

“#TaxReform that raises your taxes is the wrong direction,” he tweeted.

While things look positive for the House vote, Republicans have missed past deadlines they have set for themselves. At the joint House and Senate GOP retreat in January, Ryan mapped out a timeline for rank-and-file Republicans showing they’d get a tax bill to Trump’s desk by August. They also failed to repeal ObamaCare, despite campaigning on doing so for years.

But Republicans are highly motivated to accomplish one of the top items on their legislative agenda, especially after last week’s election losses in Virginia.

“I think a lot of people in Washington are taking a message from the Virginia elections that voters are discontent with the lack of policy progress in Washington,” said Scott Hodge, president of the Tax Foundation. “And I think that’s provided some urgency to both the House and the Senate to get this tax-reform plan to the president’s desk before Christmas.”

Further challenges lie ahead.

Senate Republicans released their own tax bill Thursday that has many differences from the House’s measure.

The Senate bill fully repeals the state and local tax deduction. That would be unacceptable to many House Republicans from blue states, including some who appear likely to vote for the House bill.

And some aspects of the Senate bill may not be well received from conservatives in the House. The Senate measure does not repeal the estate tax and delays until 2019 cutting the corporate tax rate from 35 percent to 20 percent. The House bill slashes the corporate rate more immediately.

“To me, that is the biggest conflict between the House version and the Senate version,”  Walker said in the interview.

He and other GOP sources said there could be some minor, last-minute changes to the House bill before it gets a final vote, especially as House leaders pore over the details of the Senate proposal.

“I still think there are a few tweaks and adjustments to be made” Walker said.

Ryan made it clear that if both chambers pass tax bills, they would go to a conference committee rather than the House simply voting on the Senate’s measure.

But it’s not clear yet if the Senate bill even has the votes yet to clear its own chamber, where Republicans can only afford two defections. Some GOP senators, such as Jeff FlakeJeffrey (Jeff) Lane FlakeAnti-gun violence organization endorses Kelly's Senate bid Arpaio considering running for former sheriff job after Trump pardon Overnight Energy: Warren edges past Sanders in poll of climate-focused voters | Carbon tax shows new signs of life | Greens fuming at Trump plans for development at Bears Ears monument MORE of Arizona and James LankfordJames Paul LankfordGOP group calls on Republican senators to stand up to McConnell on election security in new ads Hillicon Valley: GOP hits back over election security bills | Ratcliffe out for intel chief | Social media companies consider policies targeting 'deepfakes' | Capital One, GitHub sued over breach The Hill's 12:30 Report: Biden camp feels boost after Detroit debate MORE of Oklahoma, are concerned about the bill’s impact on the debt.

Meanwhile, Sens. Marco RubioMarco Antonio RubioGOP group calls on Republican senators to stand up to McConnell on election security in new ads What the gun safety debate says about Washington Trump moves forward with F-16 sale to Taiwan opposed by China MORE (R-Fla.) and Mike LeeMichael (Mike) Shumway LeeMcConnell, allies lean into Twitter, media 'war' Conservatives buck Trump over worries of 'socialist' drug pricing Criminal justice reform should extend to student financial aid MORE (R-Utah) are pushing for the bill to further increase the size of the child tax credit.

A wild card in the process is Trump, who at times has weighed in on the tax process but is now abroad on a nearly two-week Asia trip.

Following reports that lawmakers were considering reducing the cap on pretax contributions to 401(k) plans, Trump tweeted that changes to the retirement plans would not be made.

More recently, Trump has been pushing for tax-reform legislation to include repeal of ObamaCare’s individual mandate. As of now, that’s not a part of either the House or Senate bills, but the idea is still under discussion.