Senate GOP wary of new tax cut sequel

Greg Nash

New projections on the size of the federal deficit and the price tag of President Trump’s tax-cut law have left some Republican senators nervous about voting on another tax package before the election. 

While the GOP on Tuesday used Tax Day to proclaim the success of last year’s $1.5 trillion tax cut, there is some unease about doubling down on the issue in the coming months. Some in the party want to go on offense and try to make permanent the individual tax cuts that were part of last year’s legislation. The bill’s authors sunset those provisions to keep the measure’s total projected cost below $1.5 trillion.

“I’d say, ‘Hell no. Hell no — double hell no,’ ” retiring Sen. Bob Corker (R-Tenn.), a leading budget hawk, told The Hill when asked about making the individual tax breaks permanent. Corker supported the bill, but last week — citing the deficit — said it could “be one of the worst votes I’ve made.”

{mosads}Sen. David Perdue (R-Ga.), who has also raised alarm about the growing debt, said he has “concerns” about making the individual tax breaks permanent. He added his first reaction is to support a long-term tax cut for individuals but cautioned it needs to be examined more closely.

He wants to see whether granting permanent tax breaks for individuals would stimulate the economy as much as the permanent corporate tax cut.

“We know on the corporate side those things are stimulative,” Perdue said.

Sen. Jeff Flake (R-Ariz.), who wavered before backing the 2017 tax package, said he’s undecided about voting for another round of cuts.

“I’m going to have to look at it,” said Flake, who is not seeking reelection. 

Extending the individual tax cuts would add between $573 billion and $736 billion to the national debt, according to a Penn Wharton Budget Model analysis released last week.

A Senate Republican aide said a bill to make the tax cuts permanent may not come to the floor because it divides the Senate GOP conference and doesn’t have a chance of passing, as it would need 60 votes to overcome an expected Democratic filibuster.

“Our membership is torn on it,” the aide said. “And it’s not a 50-vote exercise because we’re not going to pass a budget.”

Senate Republicans were able to pass last year’s tax package with a simple majority under a special budget process known as reconciliation.

But the chamber must first pass a budget resolution to set up that fast track, and there’s no sign that the Senate Budget Committee will mark up and pass a budget resolution before the election.

In March, Republican leaders floated the possibility of voting on a second round of tax cuts in 2018 to double down on their strategy of running on tax relief in the fall.

The strategy was to force vulnerable Democrats facing reelection in pro-Trump states to vote on making tax cuts for individuals permanent.

“Can you imagine Democrats voting that down? I mean, how do you explain that one?” Senate Republican Whip John Cornyn (Texas) told Politico in March. “I just think they’d be in an impossible position. They’d have to support it.”

In speeches this year, Trump has promised another round of tax cuts and has repeatedly said that not one Democrat in Congress backed last year’s bill. 

But the political calculus has changed amid the growing concerns of GOP lawmakers, voters and conservative activists over the mounting debate.

The Congressional Budget Office (CBO) warned last week that the federal debt will hit $33 trillion in 2028, or about 96 percent of the gross domestic product.

The CBO also estimated that last year’s tax bill will wind up costing $1.9 trillion over 11 years.

Many Republicans have problems with the CBO estimate and say it doesn’t take projected economic growth sufficiently into account. 

Larry Kudlow, Trump’s top economist and a contributor to The Hill, ripped the CBO on Tuesday. 

During an interview on “Fox & Friends,” Kudlow said, “Never believe the CBO. … They’re always wrong, especially with regard to tax cuts, which they never score properly.”

Still, GOP legislators are concerned about voters’ anger over the rising deficit.

Many Republican senators and House members received negative feedback during the two-week Easter recess about the $1.3 trillion omnibus spending package Congress passed in March. It increased the spending caps for defense and nondefense programs by nearly $300 billion for fiscal 2018 and fiscal 2019.

The tax law has picked up support compared to late last year. However, a new Gallup poll released this week found that 52 percent disapprove of the law compared to 39 percent who approve of it. A majority of those surveyed (56 percent) said they are unsure if the law has caused their federal taxes to increase or decrease. 

Some Republicans are also second-guessing whether forcing vulnerable Democrats to vote on making the individual tax cuts permanent is a smart political maneuver.

The GOP political strategy to grow its narrow majority has been to bash red-state incumbents such as Sens. Claire McCaskill (D-Mo.), Joe Manchin (D-W.Va.) and Joe Donnelly (D-Ind.) for voting against the Trump tax cut. Scheduling a vote on making the individual tax breaks permanent, however, would give these Democrats a chance to vote “yes” and proclaim themselves tax cutters.

At the same time, it could wind up being a tough vote for Sen. Dean Heller (Nev.), the Senate’s most vulnerable Republican, because a “yes” could anger fiscal conservatives in his state who are worried about climbing deficits.

“I’m not sure if it winds up being better for Heidi Heitkamp than for Dean Heller,” said the Senate GOP aide, referring to the North Dakota Democrat who is running for reelection in a state Trump carried by 36 points.

“Let’s see what the House can pass,” the source said.

Speaker Paul Ryan (R-Wis.) told reporters Tuesday that the House will vote this year to make the individual tax cuts permanent.

“Yes. Yes. Yes,” he declared. “[Rep.] Rodney Davis [R-Ill.] has already introduced legislation and we intend to act on that legislation this year,” he said.

The individual cuts are due to expire in 2026.

A spokeswoman for the House Ways and Means Committee said another round of tax breaks is a top priority.

“The House — and the Ways and Means Committee — is committed to make individual tax cuts permanent for hardworking Americans. This legislation will be a committee product and will move through Ways and Means. We are working through a deliberative process in areas such as tax extenders, and once we have concluded that process, we will be in a position to take action on this legislation,” said Julia Slingsby. 

Senate Majority Leader Mitch McConnell (R-Ky.) did not commit to bringing a second round of tax cuts to the floor this year when asked about it at a press conference Tuesday.

He indicated that it would depend on whether enough Democrats would agree to support it.

McConnell added that if Democrats who opposed last year’s tax package now want to make the individual breaks permanent, “that’s something we ought to take a look at.”

But he cautioned, “I’m a little skeptical about their desire here.”

Tags Bob Corker Claire McCaskill Dean Heller Donald Trump Heidi Heitkamp Jeff Flake Joe Donnelly Joe Manchin John Cornyn Mitch McConnell Paul Ryan Rodney Davis

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