Budget & Taxes

No Real Deadline for Tax Reform

Playbook: “There really is no deadline to get tax reform done. The end-of-the-year proclamations are silly, according to most of the people we talk to. This could — and many think it should — take time. It’s tough (just ask the WSJ’s Rich Rubin). It’s complicated. Congress is rewriting the entire tax code — and that affects everyone in the United States. Plenty of lawmakers tell us it should take something like six months.”

“At the end of the day, all the senior aides and lawmakers we speak to say that this remains, at best, a 60-40 proposition. Yeah, Republicans feel pretty good about where things are. But that’s mostly out of fear of losing their majorities. Many things can stop this process dead in its tracks.”

Key takeaway: “Until Paul Ryan or Mitch McConnell pull the plug, this thing is alive and kicking.”

Low Support for Trump’s Tax Plan

A new Reuters/Ipsos poll finds that fewer than a third of Americans support President Trump’s tax-cut plan.

“As the 2018 midterm congressional election campaigns grow nearer, the poll found that more than two-thirds of registered voters said reducing the U.S. federal budget deficit is more important than cutting taxes for the wealthy or for corporations.”

House GOP Scrambles for Fix Before Budget Vote

“House Republican leaders are in a mad dash to resolve a dispute between GOP tax writers and Republicans from high-tax states that has the potential to make Thursday’s budget vote a real nail-biter,” Politico reports.

“A handful of New York Republicans, along with a New Jersey lawmaker, are threatening to vote against the budget unless GOP leaders retreat from plans to eliminate a key federal deduction that people can take for the state and local taxes they pay.”

Top Tax Bill Writer Says He May Break Trump’s Promise

House Ways and Means Committee Chairman Kevin Brady (R-TX) “suggested a tax bill he is preparing to introduce could force changes to 401(k) plans and other retirement accounts, potentially bucking a promise from President Trump that those accounts would be left alone,” the Washington Post reports.

“Brady’s comments come just one week before he is planning to introduce his tax bill, which Republicans hope will lead to the most sweeping changes to the tax code in more than 30 years. But almost all of the key details of the tax bill remain a mystery. Again and again on Wednesday, Brady said the most pressing decisions have not been reached.”

Tax Cuts Are Only Thing Holding GOP Together

New York Times: “With divisions roiling the party, the prospect of a once-in-a-generation bill to cut taxes on businesses and individuals increasingly appears to be the last, best hope for a fractured establishment desperate to find common ground and advance an effort it has long championed as the pinnacle of Republican orthodoxy…”

“In the face of those divides, Republican leaders retreated to the only safe ground they have left: a partisan, fast-tracked tax bill, which party leaders hope to introduce next week in the House and deliver to Mr. Trump’s desk by Christmas. The stakes are rising by the day, as Republican donors and voters watch the intraparty dispute unfold and worry about the party advancing the legislative priorities it has long espoused, let alone holding its congressional majorities in the 2018 midterms.”

“Pressure is only increasing on Republican lawmakers, with conservative commentators and other observers saying failure on a tax bill is not an option.”

Trump Blasts Corker Again

President Trump tweeted that Sen. Bob Corker (R-TN) “couldn’t get elected dog catcher in Tennessee” and is now fighting the president’s tax reform plan.

He added: “Corker dropped out of the race in Tennessee when I refused to endorse him, and now is only negative on anything Trump. Look at his record!”

Corker responded: “Same untruths from an utterly untruthful president.”

GOP Believes House Majority Rides on Tax Reform

Playbook: “Republicans in the House are increasingly bullish that they’ll pass their tax reform bill before the Thanksgiving recess. If everything goes right, it’s possible that can happen. They have 15 legislative days before Thanksgiving.”

“Republicans also says they believe that if they get tax reform through soon, they could stop a number of lawmakers from retiring out of frustration that Congress can’t get anything done. If a bunch of House Republicans head for the exits, it will make it that much harder for the GOP to keep control of the chamber.”

“Republican operatives and top GOP officials increasingly believe the 2018 midterm elections boils down to one simple data point: if the party does not deliver on a large-scale tax cut before the election, they will lose their House majority.”

Trump Once Again Disrupts GOP Legislative Push

President Trump said “that his proposed tax plan would not prompt any changes to Americans’ tax-deferred retirement plans, pushing back against reports that the Republicans are weighing a proposal that would significantly reduce the income workers can save in these popular programs,” the New York Times reports.

“Mr. Trump’s shutdown of the proposal is the first of what many Republicans privately fear could be a presidential pattern that disrupts their efforts to pass a sweeping overhaul of the tax code. In it, Mr. Trump appeared to rule out a politically difficult idea, which, if enacted, would have provided some revenue to help pay for the tax plan.”

Congress On Track for Another Shutdown Showdown

Vox: “Don’t look now, but it’s becoming a real possibility that the government will shut down in December. Congress has until midnight on December 15 to pass a spending bill or the federal government will run out of money.”

“The tricky thing is that Republicans need at least eight Democrats in the Senate to meet the 60-vote threshold needed to pass a bill, which means they will need to make some serious compromises to get a spending bill through.”

GOP May Include Million Dollar Tax Bracket

“The Republicans on the House Ways and Means Committee — engaged in a high-pressure, high-stakes tax policy rewrite — are currently exploring not cutting the income tax rate for people who earn $1 million or more per year,” according to Jonathan Swan.

Playbook: “Multiple Republicans have even suggested to us the tax rate could go from 39.6% to 40% for top earners. It’s tough to separate hyperbole from reality, so take this with a grain of salt. If it happened, it would would strip Democrats of a talking point, and could help with revenue. On the other hand, Republicans would be raising a tax rate. We doubt it will happen, but it does give a sense of where the debate is.”

Trump Rallies GOP Lawmakers on Conference Call

President Trump “urged House Republicans on a conference call to rally behind a Senate-passed budget bill, touting it as the quickest way to enact sweeping tax cuts later this year without Democratic support,” the Washington Post reports.

Said Trump: “We are on the verge of doing something very, very historic.”

“Following multiple failed attempts to overhaul the health-care system, Republicans are ­eager for a marquee legislative victory and see tax reform as their best shot at working with Trump to deliver on a major campaign promise.”

Trump Would Create Permanent Trillion Dollar Deficits

Stan Collender: “The U.S. Treasury Department reported last Friday that the federal budget deficit for the just-completed fiscal year had risen by $80 billion over fiscal 2016 to the ominous-sounding $666 billion, a number many people think is an omen for the coming of the devil or anti-Christ.”

“In this case they may be right: The spending and taxing policies about to be put in place by the Trump administration and the Republican-controlled Congress will balloon the federal deficit to $1 trillion or more every year going forward.”

“And unlike the four consecutive $1 trillion deficits recorded during the first years of the Obama administration, these trillion dollar annual deficits will be the result of enacted changes in federal spending and taxing rather than on a temporary economic downturn.”

Can Trump Stay Out of the Way on Tax Reform?

“Congressional Republicans are readying themselves for a new obstacle on tax reform: President Trump and his penchant for disruptions,” Politico reports.

“There’s no doubt that Trump badly wants a tax deal, and he appears very willing to travel the country in support of one. But the GOP lawmakers that are crafting the tax measure are also bracing themselves for the president to potentially disturb their negotiations at any moment, as he has done throughout his nine months in office and this week on a bipartisan Senate agreement to shore up Obamacare insurance markets.”

GOP Ready to Move on Tax Bill Few Have Seen

New York Times: “The swift pace to complete, release and quickly vote on a tax cut is aimed at leaving little time for the type of dissent that has scuttled previous tax proposals.”

“The speed is striking — and strategic — for tax legislation that lobbyists believe could span 1,000 pages. Republicans hope the breakneck pace will help hold their narrow Senate majority together against what will almost certainly be a deluge of lobbying and Democratic criticism.”

Senate Approves Budget to Pave Way for Tax Cut

Speaker Paul Ryan and Senate Majority Leader Mitch McConnell “put the finishing touches on a bicameral budget deal allowing Congress to swiftly move to tax reform, multiple sources in both chambers said. The Senate approved the budget 51-49 Thursday night, clearing the way to cut as much as three weeks out of the process,” Politico reports.

“GOP leaders, as well as House Budget Chairman Diane Black and Senate Budget Chairman Mike Enzi, have been ironing out their difference and crafted a Senate amendment full of House-requested tweaks. Because the Senate adopt the amendment during its marathon ‘vote-a-rama’ Thursday, the House could clear the fiscal blueprint as soon as next week.”

Said one House GOP aide: “Members know how high of a priority tax reform is, and so that’s how it will be sold.”