On Monday, Sen. Steve Daines (R-Mont.) became the second GOP senator to say he would oppose the measure over provisions governing pass-through businesses. Sen. Ron Johnson (R-Wis.) has also said he believes the requirements for who would get a lower pass-through tax rate is too restrictive.
There are a number of other senators who seem to have serious reservations about the bill, and, if every Democrat votes no, as expected, Senate Majority Leader Mitch McConnell (R-Ky.) can lose no more than two Republicans to pass the bill (with Vice President Mike Pence breaking a tie on legislation subject to a special budget process that requires only a simple majority). But the opposition is soft, and GOP leaders have shown a willingness to make whatever change is necessary to get the bill out of their chamber.
“I assume this is one of those things that you keep adjusting until it’s at the right place and you have the votes to pass it,” Senate GOP conference vice chairman Roy Blunt (R-Mo.) told HuffPost on Monday.
Blunt said the issues that Johnson and Daines have raised were worth talking about, and he assumed there was some work-around that would get them on board. Johnson and Daines are typically reliable Republican votes who likely will support the tax proposal in its final form.
The bigger questions for GOP leaders are senators including Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), John McCain (R-Ariz.) and Bob Corker (R-Tenn.). Corker ― and some other Republicans, such as James Lankford (R-Okla.) ― have expressed concern over the amount of debt the bill would produce. McCain’s issue has been the process, and even though he’s said he’s been happy generally with the process for this bill, he has noted that the measure keeps changing. And Collins and Murkowski have shown some reservations about voting to kill the individual mandate for Obamacare, which the Senate bill would do in order to pay for more tax cuts.
Collins and Murkowski were tight-lipped Monday, but Murkowski has shown some willingness to vote for the tax proposal ― even if it includes the individual mandate repeal ― as long as the bill also opens up parts of Alaska’s Arctic National Wildlife Refuge for oil and natural gas drilling.
Republicans ultimately haven’t decided whether the final version of the bill will include the Obamacare mandate repeal, but there are issues either way. If they don’t include the repeal, they would have $338 billion less for the deductions and tax cuts that they want in their bill. If it is included, that could endanger the support of Collins and Murkowski.
When Blunt was asked whether he thought the individual mandate repeal would be in the final bill, he said yes, shakily.
“I think it still will be, but, you know, it depends on where the votes are. It all depends on where the votes are,” he told HuffPost.
In many ways, Corker’s vote could be tougher than anyone else’s ― if he sticks to the principles he laid down at the outset of the tax reform debate.
The retiring Republican said he would vote no if the bill added money to the debt. But he has already shown a willingness to accept some budget gimmicks to justify the cost of the bill. For one, Corker is open to taking a baseline of the bill that wouldn’t account for expiring measures being reauthorized. The cost of extending the measures that are technically temporary could be more than $500 billion over 10 years. There is also the matter of which analysis Corker uses for the bill. A Tax Foundation score said the $1.5 trillion cost of the bill would be offset by about $1.26 trillion in economic growth. That analysis is far more optimistic than others.
Corker reported Monday that he was working with other Republican senators and the Trump administration to “trigger” tax increases if the revenue that Republicans project is not there. Until the issue is resolved, however, Corker said he said he “very possibly” could vote against the tax proposal in the Budget Committee if there is not a fix.
“I’m not threatening anything,” Corker said. “I’m just saying that it’s very important for me to know that we got this resolved.”
The Budget Committee is expected to report the bill out either Tuesday or Wednesday, and Republicans hold only a one-vote majority on the panel, so Corker could delay the bill if he votes no. (Johnson is also on the Budget Committee, so he could also slow down the measure.)
Republicans could just bring the bill to the floor without a committee markup, like they did with their health care legislation, but that might raise some red procedural flags with McCain.
Republicans could very well find a way to convince lawmakers to support the legislation in committee with promises that it will change later on the floor. The problem for leaders is that the changes some of these senators want could either explode the cost of the bill or threaten support with other lawmakers.
Opening up who gets the lower pass-through rate could be very expensive and potentially allow individuals at the current top tax rate of 39.6 percent to restructure how they’re paid so that they become a small business or limited liability corporation. And the trigger clawback could present problems for other Republicans who believe strongly in tax cuts and want them to be permanent no matter the effect on the deficit.
On either side, leaders are balancing the concerns of other Republicans against each other, with their bias going toward whatever can pass. That gives individual Republicans a great deal of leverage over the current negotiations, and while leaders would almost certainly like to get the bill out of the Senate as soon as possible, some Republicans might figure out that this is their opportunity to actually change the bill and slow the whole process down.