A Joint Committee on taxation analysis predicts the tax bill would increase the deficit by $1 trillion, which could be problematic for lawmakers like Sen. Bob Corker, who has said he would vote against a tax bill that increased the deficit. | J. Scott Applewhite/AP Photo
Senate Republicans are still scrambling to win over enough votes to pass their massive tax code overhaul, with major changes to the bill still up in the air and a final vote pushed beyond Thursday night.
Senate Majority Leader Mitch McConnell (R-Ky.) said the next vote in the tax debate will come at 11 a.m. Friday, as work continues behind the scenes to win over skeptical deficit hawks and other hold-outs.
Multiple GOP senators leaving the chamber after a dramatic late afternoon vote said a key proposal for deficit hawks — a trigger to raise tax rates if sufficient economic growth did not materialize — would not pass procedural muster and would need to find something else to satisfy the bloc of deficit hawk holdouts, led by Sen. Bob Corker (R-Tenn.).
“It doesn’t look like the trigger is going to work, according to the parliamentarian,” Senate Majority Whip John Cornyn (R-Texas) said. “So we have an alternative, frankly: a tax increase we don’t want to do to try to address Sen. Corker’s concerns.”
Corker told reporters: “My understanding is, that the parliamentarian has ruled against it so they’re just going to automatically put [tax increases] in, period.” Corker and Sen. Jeff Flake (R-Ariz.) said the revenue raised with tax increases — which senators say would kick in six years after the enactment of the tax legislation — would total about $350 billion, although Cornyn suggested that figure may need to go higher.
Their comments came after extended drama on the Senate floor Thursday during an otherwise mundane procedural vote, when Corker, Flake and Ron Johnson (R-Wis.) initially withheld their support on a vote to move forward with the bill. Ultimately they aligned with their party, but it suggested real concerns remained.
Johnson withheld his vote during the standoff in exchange for votes on his amendments, including one that would further increase a tax deduction for pass-through businesses to around 25 percent.
Republicans got a boost earlier in the day after Sen. John McCain said he would back the Senate GOP tax legislation.
The Arizona Republican, who helped tank the party’s Obamacare repeal efforts earlier this year, has been a major question mark for weeks on the tax measure. He raised some general concerns about ballooning the deficit — one reason he voted against the Bush tax cuts in 2001 and 2003 — but stressed in his statement that he believed the tax measure would ultimately boost the economy and ease deficit issues.
“I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families,” McCain said in a statement.
The legislation would slash the corporate tax rate and lower rates for many, though not all, individuals. Senate Republicans have said their plan would boost the economy but not by nearly as much as some lawmakers hope, a new official analysis shows.
The nonpartisan Joint Committee on Taxation said Thursday that the GOP plan would fall well short of covering its $1.5 trillion cost through additional economic growth; it predicted $407 billion in additional revenue would come in by boosting the economy by 0.8 percent over the next decade.
That would mean a $1 trillion deficit increase, which could be problematic for lawmakers like Corker, who has said he would vote against a tax bill that increased the deficit. A Senate Finance Committee aide noted that the analysis was "incomplete" since the bill text has yet to be finalized.
Democrats have blasted Republicans for rushing the bill to the floor while considering significant eleventh-hour changes to the sprawling tax code rewrite.
“This is tax, one of the most complicated issues before us,” Senate Minority Leader Chuck Schumer said on the floor Thursday. “These changes and the way the majority leader is handling this make it impossible for any independent analyst to get a good look at the bill and how it would impact our country.”
McCain, however, signaled he was satisfied with the process, noting the bill went through “a thorough mark-up in the Senate Finance Committee.”
But even with McCain in the “yes” column, Senate Republicans still have myriad issues to resolve before they can lock down at least 50 votes to ensure final passage of the tax bill on the floor. Republicans are using powerful budget procedures to evade a Democratic filibuster and could pass the bill as early as Thursday night.
Other key GOP votes such as Corker, Flake and Susan Collins of Maine have yet to commit to the bill, for varying reasons. And Johnson and Steve Daines of Montana are trying to secure even more generous treatment of small businesses after extracting a boost in an earlier round of negotiations.
Collins will offer a half-dozen amendments, including one that would hike the proposed corporate tax rate of 20 percent to restore a deduction for up to $10,000 for property taxes. She is among a handful of Republican senators who say they are open to raising the proposed corporate rate in order to fund other tax provisions in the bill.
"I have talked with many CEOs who have called to lobby me and they start as saying that they'd really love to have the rate go to 20, and then I say, what about 22 percent? Would that change your decision-making?" Collins said late Wednesday night. "And they say we'd be happy with 22 percent."
The moderate senator is also seeking to extract some health care assurances because the current tax bill repeals Obamacare's requirement that everyone carry insurance or pay a penalty.
At a Christian Science Monitor breakfast on Thursday morning, Collins discussed an arrangement that would add two separate health care bills — one to stabilize the markets and another to protect pre-existing conditions and use high-risk pools — to a short-term spending bill that would need to pass before government funding expires Dec. 8.
"I’m going to know whether or not those provisions made it" before final passage of a tax bill, Collins said. "That matters hugely to me."
Conservatives in the House Freedom Caucus, a group of about 40 Republicans that frequently buck their party's leadership, rejected the notion of supporting those health care bills or other provisions thought to be key to garnering enough tax votes in the Senate.
"I don't see supporting a [continuing resolution] with Alexander-Murray attached to it," said House Freedom Caucus Chair Mark Meadows (R-N.C.).
Other members of the group said they opposed amendments that would raise the proposed corporate income tax rate above 20 percent, and bristled at the idea of a delayed cut, which the Senate's bill does largely due to budgetary rules.
"It's a great strategy if you’re looking to put the Democrats in the majority and give them credit for what we did," Rep. Louie Gohmert (R-Texas) said of the Senate's proposed one-year delay to a corporate tax cut.
Brian Faler, Bernie Becker and Elana Schor contributed to this report.