"Make Or Break": Senators Push For Sweeping Changes To Tax Bill As GOP Leaders Struggle To Vote It Out Of Committee

With roughly 14 sessions of Congress left before the New Year break, the GOP’s chances of passing comprehensive tax reform by the end of the year – as the White House has promised to do - are looking increasingly remote. So far, the biggest obstacle – as with the Republicans disastrous failure to repeal and replace Obamacare – is the Senate, where disparate groups of lawmakers are opposing the bill for different, and sometimes contradictory, reasons.

In what has been called a "make or break" marathon negotiating session, at least two Senators have come out against the bill in its current form, sending the administration scrambling to hammer out a compromise on the pass-through rate that would entice Wisconsin’s Ron Johnson and Montana’s Steve Daines to vote ‘yes’.

But according to Bloomberg, the bill could get held up in committee, largely thanks to the opposition of the two senators named above, who are working to block it even as the leadership desperately tries to secure passage by end-of-day. To keep up with Mitch McConnell’s timetable, which would see a floor vote on Thursday, Republicans must successfully shepherd it through the budget committee by early Wednesday at the very latest.

As Bloomberg explains, normally the Senate Budget Committee vote on the tax legislation would be a mere formality. However, given Republicans’ razor-thin majority on the committee a single dissenting senator could block the bill. So far, two of the 12 Republicans on the committee have expressed serious reservations about the bill that they say will prevent them from voting on it. Senator Ron Johnson of Wisconsin wants a deeper tax cut for pass-through businesses - and says he won’t vote for the bill as written. Senator Bob Corker of Tennessee wants a provision that would impose tax increases if the bill doesn’t generate enough economic growth to cover the $1.4 trillion in revenue losses it’s estimated to produce over 10 years.

“I’m not exactly sure what’s going to happen in committee, we’re working diligently to fix the problem,” Johnson told Wisconsin reporters on Monday, according to his office. “If we develop a fix prior to committee, I’ll probably support it but if we don’t, I’ll vote against it.”

As of Monday night, no deal had emerged. “We’re still negotiating, let’s put it that way,” said Senator John Thune, the chamber’s third-ranking Republican leader.

In a last-ditch attempt to whip up votes, President Trump will lunch with Republican senators today just before the committee convenes to debate the bill, and possibly hold a vote.

But even if the bill manages to clear the budget committee on Tuesday, there appears to be enough opposition to render a floor vote dead in the water, as the WSJ reports.

One group, including Ron Johnson (R., Wis.) and Steve Daines (R., Mont.), wants deeper tax cuts for so-called pass-through businesses such as partnerships and S corporations that pay taxes on individual rather than corporate tax returns. Both said they want to prevent large corporations from deducting state and local taxes, freeing up money to drive down rates for pass-through firms. They said they would like to support a tax bill but can’t do so yet.

 

Another group, including Bob Corker (R., Tenn.), Jeff Flake (R., Ariz.) and James Lankford (R., Okla.), is concerned about the $1.4 trillion addition to budget deficits the bill would cause, and these senators are wary that it won’t generate enough economic growth to pay for itself.

 

A third group, including Susan Collins (R., Maine) and John McCain (R., Ariz.), helped kill the Republican health-care bill earlier this year and could pose resistance over a variety of provisions, including plans to repeal the Affordable Care Act’s health-insurance mandate as part of the tax bill. Mr. McCain said Monday that he is still undecided and had “a lot of things” he is concerned about.

As we noted yesterday, without a single major legislative victory for the Trump administration and its Congressional allies, it is hard to understate just how critical a victory on tax bill is with year-end fast approaching - especially amid concerns that the Democrats could triumph in the Alabama election, which has given the fight an added sense of urgency. Passing tax reform is enough to keep Republicans occupied until year end. Unfortunately, they’re also facing a “nightmare” list of legislative priorities that could great serious problems for the administration – including a federal government shutdown – if they aren’t handled accordingly.

Of course, even if the senate does pass the bill, the reconciliation process presents another grueling challenge because the House and Senate plans have many major differences.

Back door deals aside, here are the next steps:

  • On Tuesday, the Senate Budget Committee is scheduled to meet on the tax legislation at 2:30 p.m. The panel, which has 12 Republicans and 11 Democrats, could decide to send the tax bill to the Senate floor. Trump is also scheduled to attend the regular policy lunch held by Senate Republicans.
  • If all goes well for GOP leaders, the Senate may begin floor debate, which would culminate perhaps Wednesday or Thursday in a “vote-a-rama" - a chaotic session in which any senator can offer an amendment to the bill. Democrats would be expected to offer a variety of amendments designed to damage, delay or derail the measure - which may lead to some political fireworks. The voting would probably take place overnight.
  • If Republicans have the 50 votes they need, Senate leaders may call for a floor vote on Thursday or Friday.
  • That said, at least one group of Wall Street strategists believes the Senate could still pass their version of the bill by the end of the week. The team at Goldman Sachs, led by chief economist Jan Hatzius, maintained in a research note published Tuesday that tax reform legislation looks likely to pass the Senate by the end of the week.
  • “In a preliminary step, we expect the Senate Budget Committee to pass the bill tomorrow (11/28), with a procedural vote on the Senate floor Wednesday (11/29), votes on amendments on Thursday (11/30), and a vote on final passage Friday (12/1).”

However, even Goldman – which has persistently touted strong odds of passage (perhaps in a nod to their former leader, Gary Cohn, who has helped manage the bill and who will likely shoulder some of the blame if it fails) - admits that if the Senate can’t pass it by the end of the week, “enactment by year end will become more difficult."

If that happens, Republicans will probably be forced to table the issue until next year. Luckily, President Donald Trump has already tested a few excuses, after all "it took the Reagan administration months to pass tax reform."

But will investors accept Trump’s reassurances in good faith, given the administration’s embarrassing failure to repeal and replace Obamacare? Indeed, if investors pull the rug out from under the Trump administration, it will likely become even more desperate to pass the bill.  At that point, we wouldn't be surprised if Trump offers Democrats major concessions to try and win a handful of votes from the opposition – even if it’s ultimately a bluff to coax intransigent Republicans to fall in line. 

Comments

MonetaryApostate Whoa Dammit Tue, 11/28/2017 - 08:24 Permalink

The entire point of taxes is to deplete the actual cash in the economy & steal even more, because the blank check bankers would rather have everyone a debt serf, & despite the fact that they printed 1.93 Trillion of the newest US $100 bills since 2013, & they can loan out 90 times that 193 trillion dollars, so essentially we are all serfs regardless.https://plus.google.com/collection/QorNbB

In reply to by Whoa Dammit

SDShack Whoa Dammit Tue, 11/28/2017 - 13:43 Permalink

"Senator Bob Corker (R) of Tennessee wants a provision that would impose tax increases if the bill doesn’t generate enough economic growth to cover the $1.4 trillion in revenue losses it’s estimated to produce over 10 years."That right there tells everyone that it is truly the elites and swamp versus the citizens. The elites are telling the masses, you will continue to pay to fund our exhorbitant lifestyle no matter the cost. Nothing about shrinking govt, or even limiting the growth of govt to live within ones means. No just the perverse view that the people exist to fund the govt at all costs. The swamp is not even attempting to hide the fact anymore that they are the master and we are the slaves. Nothing will change until a flamethrower is used on all of DC.

In reply to by Whoa Dammit

Grimaldus jerry_theking_lawler Tue, 11/28/2017 - 07:59 Permalink

"Mr. McCain said Monday that he is still undecided and had “a lot of things” he is concerned about."  The interests of American citizens is not among his concerns I guarantee you.There is not even one true American constitutional bone in ANY of the US FEDGOV. Nothing they have done for over a hundred years is constitutional. Nothing.All are progressive criminals and should be prosecuted.    Grimaldus  

In reply to by jerry_theking_lawler

BetterRalph Beowulf55 Tue, 11/28/2017 - 09:54 Permalink

Hypothetically our dogs are not allowed to bite except after being bitten, so at best it's wishfull thinking they might as well lick their own balls, the banksters aren't biting customers, they're stealing, a feat the dog does not care about. In short we have dogs watching the banksters and the dogs just want to lick their balls.  Dogs are not qualified to do accounting, and foreign banksters won't be held accountable by WEASLES, or Brownstone'd Judges, and subversive Obama Apointees in our court systemThere are no wolfs without chains. 

In reply to by Beowulf55

overmedicatedu… Let it Go Tue, 11/28/2017 - 07:35 Permalink

LOL, legislators polarized?? are you fukin nuts??..open your eyes wide shut..It is the uniparty vs the people..those who control power laugh at us..analysis like this is just propaganda..it's all farce. congress shuts the mouths of sex victims with hush money settlements which are secret..press reports propaganda and maintains the illusion of d vs r.  the only problems america has ..are corruption and the dictatorship of the ruling elites.1913 and the FED and income tax..now the greatest concentration of wealth and power the world has ever known..no cause and effect I am sure..fuk

In reply to by Let it Go

overmedicatedu… Tue, 11/28/2017 - 07:27 Permalink

the new adm has not put any pol criminal in jail..until they do..nothing moves..from 911 to 2008 to libya and fast and furious and sec state private emails thrown around like cow pies in montana..and the treason of pay to play Uranium one, seth rich killing..and sitting there the biggest dung pile ..clinton foundation.the doj/fbi are corrupt ..irs ..lois lerner gets her full pension..the smell from washington is choking the whole nation..nothing can happen, until the toilet is cleaned and people are in jail.progessive judges blocking at every turn..Trump is putting a light on the shit and the flies are now seen ..most americans think it's gop vs d,, while many of us here ,,know it's the one elite club of high class criminals ,,fighting to keep Trump powerless..right jeff sessions?

BorraChoom Tue, 11/28/2017 - 07:29 Permalink

A Few Things About the Senate Republican Tax PlanRaises taxes on 87 million middle-class families by 2027 to pay for tax breaks for the wealthy and corporations. That is one-half of all households making less than $200,000 a year. 67 million households making less than $100,000 a year would also pay more in taxes after the temporary tax cuts for individuals expire. Makes corporate tax cuts permanent, but makes tax cuts for individuals and families temporary. All the tax cuts that benefit the middle-class will expire after 2025, while the corporate tax cuts are permanent. The plan makes permanent changes to the way tax brackets are adjusted for inflation, resulting in a growing tax increase over time. [CBPP] Kills American jobs by encouraging outsourcing and profit shifting. The plan creates a territorial tax system, which exempts foreign profits from U.S. taxes. While the plan will tax some of those offshore profits, the effective tax rate will be far below the U.S. rate. U.S. multinationals will have even more tax incentives to outsource more jobs and shift more profits offshore. Hands a $565 billion tax cut to offshore tax dodgers. American corporations have $2.6 trillion in profits stashed offshore on which they owe $750 billion in U.S. taxes. Rather than make them pay what they owe, like all the rest of us do, the tax plan will charge them only $185 billion—over a half-trillion-dollar discount. [Institute on Taxation and Economic Policy (ITEP) and JCT] Lets many wealthy heirs avoid paying the estate tax. The estate tax is substantially weakened, losing $83 billion and allowing more rich families to inherit wealth tax-free. The tax now only applies to estates worth over $5.5 million per person or $11 million per couple—about 5,500 estates. Under the bill, only estates worth at least $11 million per person or $22 million per couple (about 1,800 estates) would pay the tax. [JCT, TPC, CBPP] Mandates automatic Medicare cuts of at least $25 billion in 2018 and $400 billion over 10 years. In effect, seniors will pay for tax breaks for corporations and the wealthy as automatic spending cuts are triggered by tax cuts that add $1.4 trillion to deficits. Automatic cuts will total $136 billion in 2018 and include cuts to agriculture subsidies, student loans, military retirement and more. [Congressional Budget Office (CBO)]

Not Goldman Sachs Tue, 11/28/2017 - 07:30 Permalink

What's wrong with shifting the tax burden even more to the middle class. Reform will solidify the Corportacrocy. It is unbelievable that the plebs will take it up the arse so Fortune 500 can clean up. Tinckle down economics.

Peter K Tue, 11/28/2017 - 07:33 Permalink

"But will investors accept Trump’s reassurances in good faith, given the administration’s embarrassing failure to repeal and replace Obamacare?"Ahemmmmm....Since when did "the administration" become "the Senate"?It was the Senate that failed to pass the Obamacare repeal.And it was two Senators, namely Collins and McCain.Can't blame this on the Emperor-god!

Last of the Mi… Tue, 11/28/2017 - 07:47 Permalink

Dems and RINO's will not vote for anything  that doesn't increase taxes and enlarge government and it's spending. You can call it a tax cut or even a kumquat, but the fact remains they are going to keep increasing government spending and they need more of your money to do so. You see, it's for your own good. Somewhere along the line there's an entitlement for you to make you happy, just as long as the money flows through the government first so they can get their share. 

overmedicatedu… Tue, 11/28/2017 - 07:56 Permalink

tax is a weapon to keep the sheep in line..the elite get creative with social planning via the tax code and even put road blocks up to political grass roots , right Lois?..and the theft of billions of fiat for the elite ..worthless paper produced by banks at zero cost and at will, the logic of what the Fed has shown anyone willing to see..there is NO need for taxes ..debt and fiat balance the .gov books no matter what is spent in DC.. taxes are wall paper to make all of us think there is something backing the fed paper money..are you laughing yet?

arby63 Tue, 11/28/2017 - 07:57 Permalink

The Repuglicans are paralyzed, useless and weak. The Dumbocrats are coniving, cooked and dangerous. We're in a world of hurt unless we start hanging some of these bastards.

Money_for_Nothing Tue, 11/28/2017 - 08:23 Permalink

The Senate of the United States is all posed to take credit for a new Stock Market crash that replaces 1929 and 1987 in history. Who's name will be biggest? Corker? McCain? McCain is already there for his historic vote to let Obamacare die unmolested. I bet it will be Trump's short and soon to be retired nemesis Corker.

melpheos Tue, 11/28/2017 - 08:44 Permalink

USA big corp wants it, USA big corp give money to the GOP and the Dems, the GOP and the Dems give USA big corp a gigantic tax cut. Rinse and repeat...Head you lose, Tail they win

Last of the Mi… Tue, 11/28/2017 - 10:20 Permalink

At least you called it what it is. A "Tax bill" because it's damn sure not a tax cut bill at this point. Those guys are so far off the map as far as what the country needs in tax relief that it would be comical if it weren't so serious. You'd be better off teaching particle physics to monkeys than trying to make those government growing socialists understand the concept of an open and competitive economy functioning without each and every dollar flowing through the governments hands several times in each transaction. 

fbazzrea Tue, 11/28/2017 - 10:28 Permalink

a key provision slipping beneath most radars forces investors to use FIFO accounting which will slay those folks who've been contributing to 401K, private pensions, etc. for decades at lower prices and continue to purchase shares at these nosebleed prices. First-in First-out will impose capital gains accrued for decades but disallow losses from recent-year purchases relative to crashing equity/bond market prices.in other words, the new "middle-class tax-relief bill" will reap the maximum tax revenues from Boomers dumping equities and bonds in the next crash. banksters and billionaires have/are already selling--pre-legislation. they won't be dumping. they'll wait until prices get CHEAP, then buy the 99%ers' assets with the 99%'s own money (taxpayer indebted funds) and stiff 'em with an enormous tax bill to boot--both personal income and federal govt liabilities.add the removal of the SALT deductions and it's another Ben Dover moment for us po' folks.MAGA /sarc (heavy)