Budget

Ryan Insists Tax Reform Will Be Easier

Boston Globe: “With the GOP effort to repeal President Obama’s Affordable Care Act on the rocks, and doubts that the enormously complex field of tax reform could pose an equally heavy lift, Ryan sounded a note of optimism.”

Said Ryan: “As Republicans, we are wired the same way on tax reform. Obviously, we’ve seen in the Senate there are a difference of opinions on how to do health care reform. We are so much more unified on tax reform, on what it looks like, and how to do it, and the need to do it.”

GOP Tax Negotiators Run Into a Math Problem

Jonathan Swan: “Sources familiar with the Republican tax negotiations say there’s an acknowledgment within the working group that setting the corporate rate at less than 25 percent may be unworkable if the tax reform is going to be revenue neutral.”

“This is far from the number the administration wants, but a source familiar with the discussions said it’s a simple numerical cash problem. They’ve done away with the border adjustment tax, health care repeal is failing, and there are no politically-palatable alternatives to fill more than $1 trillion in missing revenue.”

House GOP Leaders Can’t Get Votes for Budget

“Speaker Paul Ryan and his top lieutenants have a serious math problem when it comes to their budget. After weeks of delays and false starts, House Republicans are expected to advance their fiscal blueprint through committee on Wednesday night. But they’re far from the 218 votes needed to pass it on the floor,” Politico reports.

“With only one more week until the House leaves for the August recess, it looks increasingly likely that Republicans will punt once again on the most fundamental task of governing: passing a budget. Missing that deadline will leave the GOP exposed to criticism at home and undermines their chances of moving on to another key agenda item.”

White House Scales Back Ambitions for Business Tax Cut

“With President Trump’s promise to repeal and replace the Affordable Care Act nearly dead, administration officials are scaling back their ambitions to cut the corporate tax rate sharply, apparently taking a more pragmatic approach as they scramble to secure a major legislative victory this year,” the New York Times reports.

“One crucial point of discussions in the coming days, the person said, will be the proposed business tax rate. In April, a White House policy paper pegged it at 15% for corporations and small businesses alike. The current rate is 35%. But now the proposed business tax rate is “drifting higher,” this person said, and may end up in the low 20 percent range.”

House GOP Can’t Even Pass Its Spending Bill

“House GOP leaders are resorting to Plan B on their spending strategy after falling woefully short of the support needed to pass a massive government funding package without Democratic votes,” Politico reports.

“Majority Leader Kevin McCarthy announced Tuesday night that the House will vote next week on a measure that includes just four of the 12 bills needed to fund the federal government. That decision comes after GOP leaders failed to get enough Republican support to pass the full dozen without the help of their minority-party counterparts.”

Bill Kristol: “July 2017 could be the month historians look back to as the moment the GOP lost any credible claim to be a plausible governing party.”

House Unveils Budget Plan Ahead of Tax Reform

“House Republicans unveiled a 2018 budget plan Tuesday that would pave the way for ambitious tax reform legislation — but only alongside a package of politically sensitive spending cuts that threaten to derail the tax rewrite before it begins,” the Washington Post reports.

“GOP infighting over spending, health care and other matters continues to cast doubt on whether the budget blueprint can survive a House vote. Failing to pass a budget could complicate leaders’ plans to move on to their next governing priority as hopes of a health-care overhaul appeared to collapse late Monday in the Senate.”

“The House Budget Committee blueprint, which is set for a Thursday committee vote, sets out special procedures that could ultimately allow Republicans to pass legislation over the objections of Senate Democrats who can normally block bills they oppose.”

Mnuchin Is Hurtling Towards His First Fiasco

Treasury Secretary Steven Mnuchin’s “struggles to win support in Congress or the White House for his strategy to raise the federal debt ceiling are casting doubt on whether the political neophyte has the Washington clout to win approval of a measure that could be necessary to avoid a historic, market-rattling default on U.S. government debt,” the Washington Post reports.

“Unlike other issues facing the Trump administration — such as passing a health-care bill and overhauling the tax code — raising the debt limit comes with a hard deadline of late September, according to Mnuchin. Failure to do so could lead the U.S. government to miss paying its obligations, causing what analysts would consider a historic, market-rattling default on U.S. government debt.”

Politico: “Republicans are divided over whether to raise the debt ceiling before the August recess, with senators preferring to act soon and members of the more conservative House reluctant to take the contentious vote before the break.”

GOP May Tie Debt Limit Increase to Veteran’s Bill

“Republicans are considering tying a must-pass increase in the federal debt limit to funding for a program that lets military veterans get medical care outside of Veterans Affairs facilities,” the Wall Street Journal reports.

“The legislative move, still in the early stages of discussion on Capitol Hill, would let Republicans claim a policy victory while raising the federal borrowing cap.”

House GOP Weighs Massive Partisan Spending Bill

“House GOP leaders will decide next week whether to brave an ugly floor fight over a massive GOP spending bill — a proposal applauded by some rank-and-file Republicans but that risks embarrassment if it fails,” Politico reports.

“In a closed-door GOP conference meeting Friday morning, House Majority Leader Kevin McCarthy said all 12 appropriations bills will be finished in committee by the end of next week. Starting Monday, leadership will begin a tentative whip count on whether lawmakers would vote for a package before the August recess that combines all of those bills into one $1 trillion government funding bill.”

Though the bill would never pass the Senate in the face of Democratic opposition, the process would allow House Republicans to offer potentially hundreds of amendments, an exercise that excites members who are frustrated that they’ve had no input on how to fund the government… The strategy could open something of a Pandora’s box, however. Lawmakers would be required to vote on controversial amendments that could be used against them in their districts, from provisions on the Confederate flag to gay rights proposals that put them in bind.”

Meadows Threatens Shutdown Over Border Wall

House Freedom Caucus chairman Mark Meadows (R-NC) told Brietbart that the federal spending bill — which needs to be passed by the end of September — must fund the construction of President Trump’s border wall or else there will be a government shutdown.

He also claims Trump backs his position: “My conversations with the President have led me to believe that there is nothing less than a full and total commitment on his part to only sign into law a funding bill that actually allows for us to start construction of a border wall on our southern border. He’s committed to do that. We’re committed to supporting him in that position.”

The Demise of the So-Called Deficit Hawks

Jonathan Swan: “Conservatives are curiously zen about the debt ceiling hike, which points to a tectonic shift in the politics of debt now that we’ve entered the Trump Era. Not a single major conservative outside group is demanding the White House slash spending in exchange for their cooperation raising the debt ceiling (which will have to happen in October). Privately, most top Trump administration officials are delighted conservatives aren’t pressuring them.”

“One high-profile conservative leader — summing up a view I’m hearing across the movement — told me his group doesn’t think it’s a good idea to play chicken with Republican leadership and the President over the debt ceiling as they often did with Barack Obama.”

Bannon Pushes to Hike Taxes on Wealthy

Jonathan Swan: “Steve Bannon is causing a stir inside the administration by pushing an idea that’s anathema to most Republicans: raising taxes on the wealthiest Americans to pay for steep middle and working-class tax cuts. (Some officials who’ve heard Bannon’s idea think it’s crazy, but the President’s chief strategist believes it’s a potent populist idea.)”

“Bannon has told colleagues he wants the top income tax bracket to ‘have a 4 in front of it.’ (The top bracket is currently 39.6% for Americans who earn more than $418,400.) It’s classic Bannon – pushing a maximalist position that’s reviled by the Republican establishment.”

Also interesting: “Gar Cohn has told associates that if tax reform doesn’t get done this year, it’s probably never going to happen. Sources who know Cohn speculate that he’ll leave the White House the instant he concludes tax reform is dead.”

Republicans Outside Washington Warm to Tax Increases

“Something strange has been happening to taxes in Republican-dominated states: They are going up,” the New York Times reports.

“Conservative lawmakers in Kansas, South Carolina and Tennessee have agreed to significant tax increases in recent weeks to meet demands for more revenue. They are challenging what has become an almost dogmatic belief for their party, and sharply diverging from President Trump as he pushes for what his administration has billed as the largest tax cut in at least a generation.”

“And now some Republicans say that what has played out in these states should serve as a cautionary tale in Washington, where their party’s leaders are confronting a set of circumstances that looks strikingly similar.”