How the Trump tax law passed: Bipartisanship wasn't an ingredient

How the Trump tax law passed: Bipartisanship wasn't an ingredient
© Greg Nash

 

Rep. Henry Cuellar (D-Texas) was bullish about a bipartisan deal.

The Texas Democrat, a leader of the conservative-leaning Blue Dogs, was among just seven bipartisan lawmakers invited last fall to dine at the home of Ivanka TrumpIvana (Ivanka) Marie TrumpApple in front lines of Trump trade war African Development Bank is much more than critic suggests Apple seeks to exempt products including iPhone from proposed tariffs MORE and Jared KushnerJared Corey KushnerTrump puts the cart before the horse in Palestine Negotiators face major obstacles to meeting July border deadline GOP launches 'WinRed' online fundraising site in response to Democrats' small-donor advantage MORE, where tax reform was the topic on the menu.

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It was the type of intimate political gathering where Washington insiders hash out deals outside the glare of the media and the roar of more partisan colleagues, and Cuellar was hoping the power couple would prove to be allies in the Blue Dogs’ effort to exert some Democratic sway over the Republicans’ emerging tax bill.

“We said, ‘Hey, listen, we want to work, but we want to have a say-so.’ And they said, ‘Well, what say-so do you want?’ " Cuellar recalled.

Cuellar laid out several policy requests, then added a logistical one: “We still want to look at the bill before it’s filed," he recalled nine months after that October dinner in the historic Waddy Wood mansion Ivanka Trump and Kushner are renting — just a stone’s throw from former President Obama — in the tony Kalorama neighborhood of Northwest D.C.

It wasn’t to be.

Within a month, Republicans had released their preferred tax overhaul without any Democratic input, ignoring the Blue Dogs’ wish list — including an insistence on deficit neutrality, legislative transparency and a prioritization of tax cuts for the middle class — and dashing any chance the package had of attracting even a single Democratic vote.

“We were never given that opportunity to actually have a say-so,” Cuellar lamented in July. “At the end, basically they said, ‘Here’s a bill, are you for it or against it?’ ”

The last sweeping overhaul of the tax code occurred in 1986 with a divided government: Republicans controlled the White House and the Senate, while Democrats ran the House.

The Republican outreach to Democrats was never really serious. With control of Congress and the White House, the GOP had the votes to ram a bill through to President TrumpDonald John TrumpNew EPA rule would expand Trump officials' powers to reject FOIA requests Democratic senator introduces bill to ban gun silencers Democrats: Ex-Commerce aide said Ross asked him to examine adding census citizenship question MORE’s desk.

This is part four 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 election.

 

'A different era'

In January 2017, Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellEXCLUSIVE: Trump on reparations: 'I don't see it happening' Overnight Health Care — Sponsored by Campaign for Tobacco-Free Kids — Trump issues order to bring transparency to health care prices | Fight over billions in ObamaCare payments heads to Supreme Court Hillicon Valley: Senate bill would force companies to disclose value of user data | Waters to hold hearing on Facebook cryptocurrency | GOP divided on election security bills | US tracking Russian, Iranian social media campaigns MORE (R-Ky.) said the bipartisanship of the 1980s would not be reemerging on tax cuts: It’s “a different era,” he said.

“The only way you can achieve success in an environment like now, where there’s not much bipartisanship, is for us to have our act together and to work out our differences among ourselves,” McConnell told The Hill at the time.

Senate Republicans thought they might secure “yes” votes from a few centrist Democrats up for reelection in red states, including Sens. Joe DonnellyJoseph (Joe) Simon DonnellyConservatives spark threat of bloody GOP primaries Anti-corruption group hits Congress for ignoring K Street, Capitol Hill 'revolving door' K Street giants scoop up coveted ex-lawmakers MORE (Ind.), Heidi HeitkampMary (Heidi) Kathryn HeitkampLobbying World Pro-trade group targets Democratic leadership in push for new NAFTA On The Money: Stocks sink on Trump tariff threat | GOP caught off guard by new trade turmoil | Federal deficit grew 38 percent this fiscal year | Banks avoid taking position in Trump, Dem subpoena fight MORE (N.D.), Joe ManchinJoseph (Joe) ManchinRepublicans, Trump Jr. signal support for embattled West Virginia governor Critics say Interior's top lawyer came 'close to perjury' during Hill testimony The Hill's 12:30 Report — Presented by MAPRx — Trump takes heat for remarks on help from foreign governments MORE (W.Va.), Claire McCaskillClaire Conner McCaskillConservatives spark threat of bloody GOP primaries Congress needs to work to combat the poverty, abuse and neglect issues that children face Lobbying world MORE (Mo.) and Jon TesterJonathan (Jon) TesterVA chief pressed on efforts to prevent veteran suicides Overnight Defense: US to send 1K more troops to Mideast amid Iran tensions | Iran threatens to break limit on uranium production in 10 days | US accuses Iran of 'nuclear blackmail' | Details on key defense bill amendments Democrats aim to block defense money from being used on Trump border wall MORE (Mont.). But not one Democrat in Congress backed the tax package. These five senators declined to talk to The Hill about their votes.

Sens. Rob PortmanRobert (Rob) Jones PortmanSenate investigation finds multiple federal agencies left sensitive data vulnerable to cyberattacks for past decade Senate panel advances bill to protect government devices against cyber threats House passes bill to establish DHS cyber 'first responder' teams MORE (R-Ohio) and Pat ToomeyPatrick (Pat) Joseph ToomeyOvernight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump's 'due process' remark on guns Top GOP candidate drops out of Ohio Senate race MORE (R-Pa.), who played major roles in crafting the tax package, each spoke with Manchin.

Ivanka Trump, meanwhile, had dinner with Manchin and Heitkamp in mid-October.

But once Republicans decided to scrap ObamaCare's individual mandate, “there was no chance whatsoever of getting any Democrats," Toomey said.

Sen. Ron WydenRonald (Ron) Lee WydenOvernight Health Care — Sponsored by Campaign for Tobacco-Free Kids — Trump issues order to bring transparency to health care prices | Fight over billions in ObamaCare payments heads to Supreme Court Senate set to bypass Iran fight amid growing tensions Overnight Defense: House passes T spending package with defense funds | Senate set to vote on blocking Saudi arms sales | UN nominee defends climate change record MORE (D-Ore.), the ranking member on the Senate Finance Committee, said Republican efforts to work with Democrats were a complete charade.

Wyden recalled a meeting at the White House with five other Senate Democrats.

“The president has a way of telling everybody in the room exactly what they want to hear, and the meeting was otherwise light on details. But he did make a point to threaten these five Democrats, who all came from states he won in 2016, that he wouldn’t want to be in their shoes if they did not support him on taxes,” Wyden said.

Wyden, who previously worked with Republicans on health care and tax reform, said the GOP “never once gave [bipartisanship] a chance.”

 

Blue Dogs huddle with President Trump

For Cuellar and the House Blue Dogs, the Republican proposal marked the dead end of a long road of talks with Republican leaders in Congress, the White House and the business community in optimistic search of a bipartisan breakthrough. Even before President Trump was sworn in, the Blue Dogs had met twice with House Ways and Means Chairman Kevin BradyKevin Patrick BradyDemocrats give Trump trade chief high marks Democrats talk up tax credits to counter Trump law House panel approves bills on tax extenders, expanding tax credits MORE (R-Texas), a key architect of the tax bill, and reached out to Marc Short, Trump’s congressional liaison, who huddled with them in April 2017.

Similar meetings followed in subsequent months with the U.S. Chamber of Commerce, Treasury Secretary Steven MnuchinSteven Terner MnuchinDemocratic lawmaker calls Trump a 'moron' for his handling of Iran Overnight Defense: Trump says he doesn't need Congress to approve Iran strikes in interview with The Hill | New sanctions hit Iran's supreme leader | Schumer seeks to delay defense bill amid Iran tensions | Esper's first day as acting Pentagon chief Treasury inspector general to probe delay of Harriet Tubman bills MORE and Commerce Secretary Wilbur RossWilbur Louis RossDemocrats: Ex-Commerce aide said Ross asked him to examine adding census citizenship question Apple in front lines of Trump trade war Supreme Court set to deliver ruling on census citizenship question MORE. In September 2017, the group won the ear of Trump at the White House, where Cuellar emerged with a gleeful report that the president was vowing to cut taxes for the middle class but not the wealthy — a promise that was ultimately not kept.

Rep. Daniel LipinskiDaniel William LipinskiOvernight Health Care: Democratic bill would require insurance to cover OTC birth control | House Dems vote to overturn ban on fetal tissue research | New rule aims to expand health choices for small businesses House Democrats vote to overturn Trump ban on fetal tissue research Sanders endorses Lipinski's progressive primary challenger MORE (D-Ill.), another leader of the Blue Dogs, said he got the sense when his group met with administration officials in June 2017 that the White House didn’t think they could get a tax bill that would pass the Senate with 60 votes.

“They essentially said, 'We’d love this to be bipartisan; we’re trying to figure out where we get to 60 in the Senate,' ” he said. “And the implication was if they can’t figure out how to get to 60 … they’d go with reconciliation.”

Members of the New Democrats — another bloc of House lawmakers long interested in a tax-code overhaul — also huddled several times with Brady and the Republicans in search of bipartisan cooperation. But Rep. Jim HimesJames (Jim) Andres HimesHimes becomes latest Democrat to back impeachment inquiry against Trump Ocasio-Cortez pokes DNC over 'Boy Bye' promo: 'Someone didn't go to my Twitter class' Hillicon Valley: Hacker group targeted electric grid | House Democrats press CBP over facial recognition program | Senators offer bill to protect health data | Groups file FCC complaint over carriers' use of location data MORE (D-Conn.), chairman of the group, said the meetings were merely “superficial exchanges” designed to lend a bipartisan air to a process that was anything but.

Many Democrats interviewed for this story suggested that Brady was interested in a bipartisan agreement but was simply taking marching orders from Speaker Paul RyanPaul Davis RyanPaul Ryan praises Trump: 'He's not taking any crap' The Hill's Morning Report - Crunch time arrives for 2020 Dems with debates on deck Ocasio-Cortez calls out Steve King, Liz Cheney amid controversy over concentration camp remarks MORE (Wis.) and other GOP leaders who intended to jam a partisan bill through Congress from the earliest stages of the process.

It's a theory Brady quickly rejects.

“Everyone who knows me knows that wouldn’t work anyway,” he said.

He said he met repeatedly with Democrats, asked them about their priorities for a tax-code overhaul, and found that Democrats and Republicans had similar goals.

“It became clear that [Minority] Leader [Nancy] Pelosi [D-Calif.] was not going to let them engage, in my view, in a positive way in tax reform,” Brady said. “Nonetheless, individually, we kept listening to members.”

Yet in the eyes of many Democrats who also met with Brady and other Republican tax leaders months ahead of the bill’s release, the cake was baked from the start — even at the committee level.

In April 2017, Brady called Ways and Means Democrats to the committee’s library in the Longworth Office Building to lay out the contours of the tax debate. He 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 (Ill.), who headed the committee’s tax policy subpanel in 2017, were the only two Republicans in attendance. The meeting was short and, according to Democrats, it didn’t go well.

“They didn’t ask for much input at all. They were just basically telling us what was going to be happening, which kind of pretty quickly diminished our thoughts about any bipartisanship,” said Rep. Joseph Crowley (D-N.Y.), a committee member who attended. “[Brady] made a very clear statement to us that their intention was to use reconciliation. And that said to us right away that they weren’t looking for a single Democratic vote.”

Among the top Democratic brass, there was even less inclusion, according to party leaders.

House Minority Whip Steny HoyerSteny Hamilton HoyerDemocrats give Trump trade chief high marks Hispanic Caucus seeks to retain voice in House leadership GOP lawmakers want Mulvaney sidelined in budget talks MORE (D-Md.) hammered the Republicans for bringing their bill to the floor in December “without any substantive hearings, no input from Democrats or the American people and apparently no proofreading.”

“Republicans never engaged Leader Pelosi,” Henry Connelly, a spokesman for Pelosi, said in an email.

In past decades, sweeping legislation was passed on a bipartisan basis, but times have changed.

 

ObamaCare/tax cut comparison

Democrats have repeatedly contrasted the GOP’s tax cuts approach with their own efforts to enact ObamaCare in 2009 and 2010, when five different committees between the two chambers held dozens of hearings and considered hundreds of amendments — many offered by Republicans — in cobbling together the legislation, which became law in March 2010. No Republican supported the final bill.

GOP officials counter that there were a slew of last-second changes to the Affordable Care Act that few, if any lawmaker, had the chance to read before their votes.

Roskam said some Democrats didn’t want the high earners to receive any relief in the tax bill, adding that politics prevented Democrats from supporting legislation backed by Trump.

“There were some Democrats who said to me, 'If Donald Trump is for this bill, I have to be against it based on my politics at home.' Well, that’s a category that we can’t satisfy,” said Roskam, who hails from a district Democratic presidential candidate Hillary ClintonHillary Diane Rodham ClintonBiden to debate for first time as front-runner Top Trump ally says potential Amash presidential bid could be problematic in Michigan Chaotic Trump transition leaks: Debates must tackle how Democrats will govern differently MORE won in 2016 and is a target of Democrats this fall.

In the Senate, all Democratic members except Manchin, Heitkamp and Donnelly sent GOP leaders and Trump a letter in August 2017 laying out three prerequisites to bipartisan tax reform: it should not cut taxes for the top 1 percent; it should move through regular order instead of reconciliation; and it can’t add to the deficit.

Republicans say the demands in the letter made it hard to engage with Democrats, with Toomey calling them a "non-starter."

"From my reading of it, when you lay out those three preconditions, you are clearly, clearly expressing a refusal to work with Republicans on tax reform," he said.

Wyden said the goals of the letter were for Democrats to "show a united, bipartisan front" and to outline the caucus's key priorities before negotiations started.

He said that Republican reaction to the letter "was further proof that Republicans were always planning to go it alone on taxes with Trump in the Oval Office."

Trump last year traveled to states he carried in 2016 with Democratic senators in an effort to convince some red-state Democrats to back his tax-cut efforts. Heitkamp and Donnelly even attended his events in their home states.

Now, Trump is reminding voters that the two Democrats voted “no.”

Trump, who once considered Heitkamp for the post of Agriculture secretary, has dubbed her “a liberal” on the campaign trail. Donnelly, for his part, has been called a "swamp person."

 

Friday: GOP adds sweeteners

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.