How the Trump tax law passed: Dealing with a health care hangover

How the Trump tax law passed: Dealing with a health care hangover
© Greg Nash

The Republican Party was in disarray.

It was the summer of 2017 and the GOP’s seven-year quest to repeal ObamaCare had failed spectacularly despite the party having control of the White House and Congress.

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President TrumpDonald John TrumpPompeo changes staff for Russia meeting after concerns raised about top negotiator's ties: report House unravels with rise of 'Les Enfants Terrible' Ben Carson: Trump is not a racist and his comments were not racist MORE blamed GOP leaders, specifically Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThe Hill's Morning Report - A raucous debate on race ends with Trump admonishment White House, Congress inch toward debt, budget deal Republicans scramble to contain Trump fallout MORE (R-Ky.). Trump went so far as to suggest that McConnell should step aside if tax reform also faltered. McConnell countered that Trump’s frustration was due to “excessive expectations.”

Under the initial GOP legislative timetable, health care would be done in the spring, tax reform by August and then Republicans would look to pass an infrastructure bill. Speaker Paul RyanPaul Davis RyanOcasio-Cortez top aide emerges as lightning rod amid Democratic feud Juan Williams: GOP in a panic over Mueller House Republicans dismissive of Paul Ryan's take on Trump MORE (R-Wis.) went so far as to say this could be the “most productive presidency and Congress in our lifetime.”

This is part two of a seven-part series on how President Trump’s tax law passed Congress and how it is playing out in the battle for Congress in the 2018 midterm elections.

Perhaps no moment played a bigger role in Republicans’ successful effort to pass a tax-cut bill than Sen. John McCainJohn Sidney McCainThe peculiar priorities of Adam Schiff Ocasio-Cortez fires back at Lindsey Graham: 'Graham wants to bring back 1950s McCarthyism' Meghan McCain knocks Lindsey Graham for defending Trump's tweets: 'This is not the person I used to know' MORE’s (R-Ariz.) thumbs-down that doomed the ObamaCare repeal efforts.

“When health care failed in the Senate so publicly, several times, I think that those were the toughest days because it appeared to the rest of the world that Republicans couldn’t unite behind our agenda. Those were tough days,” House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyLawmakers join Nats Park fundraiser for DC kids charity On The Money: Fed chief hints strongly at rate cut | Powell lays out 'serious concerns' over Facebook crypto project | Trump official to investigate French tech tax | Acosta defends Epstein deal Trump administration launches investigation into French plan for tax on tech giants MORE (R-Texas) said.

Headlines that ran at the time battered the GOP: “Why Republicans Can’t Govern,” “Donald Trump is a Lame-Duck President,” “Why Republicans Can’t Get Anything Done.”

“But in looking back,” Brady said, “those were probably the days that contributed the most to tax reform’s success, because the White House, the House and Senate just became determined that we would not fail in tax reform. And so, what was one of the toughest periods turns out to be one of the best driving forces to get this done.”

Some Republicans claimed the party made a mistake by moving on health care before taxes.

Treasury Secretary Steven MnuchinSteven Terner MnuchinBen Carson: Trump is not a racist and his comments were not racist The Hill's Morning Report - A raucous debate on race ends with Trump admonishment White House, Congress inch toward debt, budget deal MORE disagrees.

“In hindsight, we wouldn’t have been ready,” Mnuchin told The Hill, citing the myriad of complicated issues that had to be dealt with and pointing out that tax reform had been 30-plus years in the making.

 


A different approach

The House and Senate worked separately on health care, with Trump sometimes clashing with leading Republicans on how to pass the bill. On tax reform, the White House, House and Senate formed a group called the “Big Six” to get broadly on the same page ahead of the release of legislation. The Big Six, which started meeting in spring 2017, consisted of Mnuchin, Ryan, Brady, McConnell, Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchTrump to award racing legend Roger Penske with Presidential Medal of Freedom Trump awards Presidential Medal of Freedom to economist, former Reagan adviser Arthur Laffer Second ex-Senate staffer charged in aiding doxxing of GOP senators MORE (R-Utah) and Gary CohnGary David CohnPress: Acosta, latest to walk the plank 'I alone can fix it,' Trump said, but has he? The Hill's 12:30 Report: Trump targets Iran with new sanctions MORE, who was then the White House’s top economic adviser.

Republican lawmakers were often at odds with each other during the health-care process. But with taxes, lawmakers tried to be more constructive than destructive.

The day that the Big Six released its framework in September 2017, House Republicans held a retreat at the National Defense University. Brady and Rep. Peter Roskam Peter James RoskamBlue states angry over SALT cap should give fiscal sobriety a try Illinois Dems offer bill to raise SALT deduction cap Illinois New Members 2019 MORE (R-Ill.) walked lawmakers through the proposals. Republican members then had a chance to speak on open microphones and leading Republicans braced for criticism.

“Open mics among House Republicans, they tend to be a disaster. It’s some version of finger-pointing and admonition and somebody says, ‘You guys,’ and so forth. It just never ends well,” said Roskam, who headed the Ways and Means tax subcommittee last year.

“By contrast … this was terrific. People came to the microphones with thoughtful comments, real critique, legitimate concerns, issues that they were raising,” he added.

Roskam felt that the constructive nature of the comments indicated that lawmakers really wanted to vote for a tax bill.

“That’s when I was convinced this was a likelihood,” Roskam said.

Former Rep. Pat TiberiPatrick (Pat) Joseph TiberiOhio New Members 2019 Many authors of GOP tax law will not be returning to Congress GOP Rep. Balderson holds onto seat in Ohio MORE (R-Ohio), who served on the Ways and Means Committee at the time, said the failure on ObamaCare repeal contributed to tax cuts being a partisan endeavor.

“If we would have done, in my opinion, an infrastructure bill at the beginning of last year that would have been likely bipartisan, we could have probably got a different type of health-care bill and a different type of tax bill,” he said. “At that point in time, when we failed to repeal and replace ObamaCare, it couldn’t pass the Senate, the tax bill was going to be partisan. It just was at that point.”

 


Health care foes, tax allies

Many conservative groups had been against congressional Republicans’ proposals for replacing ObamaCare. They would have preferred for Congress to quickly pass a bill repealing it, with a delayed effective date, and figure out a replacement at a later time.

But they still wanted to work with Republican leaders on tax cuts.

When the initial House GOP health-care bill was pulled from the floor in March 2017, FreedomWorks vice president of legislative affairs, Jason Pye, bought a Diet Coke from a vending machine in the Longworth House Office Building. He left it for Brady, a big fan of the soda, with a note.

“I had a FreedomWorks postcard with me and I just wrote on it, ‘We’re all in for tax reform’ and signed my name, left my card, left him the Diet Coke,” Pye said.

After the ObamaCare repeal efforts failed, representatives of the Club for Growth found it easier to talk to House and Senate leadership.

“I think they realized that they can’t do what they did with ObamaCare and expect to succeed,” said Andy Roth, vice president of government affairs with the Club for Growth.

Leadership wanted to ensure that they had buy-in from conservatives before the bill came out.

“It was almost surreal ... how friendly they were,” Roth said.

The day before the House bill was originally scheduled to be released, Ryan met with conservative groups and let them ask questions about the bill.

In the Senate, all Republicans ended up voting for the final measure, including the three Republicans — Sens. McCain, Susan CollinsSusan Margaret CollinsTrump angry more Republicans haven't defended his tweets: report Republicans scramble to contain Trump fallout The Hill's 12:30 Report: Trump digs in ahead of House vote to condemn tweet MORE (Maine) and Lisa MurkowskiLisa Ann MurkowskiOvernight Defense: Highlights from Defense pick's confirmation hearing | Esper spars with Warren over ethics | Sidesteps questions on Mattis vs. Trump | Trump says he won't sell F-35s to Turkey Epstein charges show Congress must act to protect children from abuse PBS premieres first nationally distributed kids' show with Native American lead MORE (Alaska) — who had voted “no” on the ObamaCare repeal. McCain died last month at the age of 81.

The House-passed health-care measure was rejected by 20 Republicans, but only five of the 20 also rejected the tax-cuts bill. The ObamaCare bill cleared the lower chamber 217-213 while the final tax bill cleared by a more comfortable margin — 224-201.

Rep. Ryan CostelloRyan Anthony CostellloHead of Pennsylvania GOP resigns over alleged explicit texts Lobbying world Overnight Energy: Park Service closing Joshua Tree after shutdown damage | Dems deliver trash from parks to White House | Dems offer bills to block offshore drilling | Oil lobby worries about Trump trade fight MORE (R-Pa.) said GOP leadership did a better job of communicating and addressing concerns on tax reform.

“To be honest with you — because I was knee-deep in the health care stuff — and they didn’t do a bad job on health care, but there were there were lessons learned,” he said.  

“And I think more attention was paid to each individual member throughout the process,” he said. “I don’t want to say there was handholding, but any member that had stuff that they needed to address, there was individual time taken.”

Costello voted against the ObamaCare bill, but ultimately backed the tax-cut measure.

Members of The Hill’s staff who have worked on this tax reform series over the past several months are Alexander Bolton, Juliegrace Brufke, Timothy Cama, Jordain Carney, Bob Cusack, Niv Elis, Naomi Jagoda, Mike Lillis, Peter Sullivan, Megan R. Wilson and Melanie Zanona.