Two GOP senators slam tax cuts provisions in compromise
(Bloomberg)—The tax bill agreement achieved by a conference committee on Wednesday still may face a questionable fate when it’s put before the House and the Senate.
Two Republican senators have criticized tax cuts for the highest earners: Susan Collins of Maine and Marco Rubio of Florida. Together, their opposition could kill the bill, although it’s not clear that either would withhold support over the latest plan for high-end rate relief. Still, as GOP leaders hustle to fashion compromise legislation for votes next week, Collins and Rubio may provide some drama.
Rubio has made no secret of his displeasure, decrying his party for prioritizing the wealthy over working families. Earlier this month, he’d sought to expand the child tax credit to benefit working families—and pay for it by bumping the proposed corporate tax rate up less than 1 percentage point. His colleagues rejected the provision, and Rubio eventually voted for the Senate tax bill without it.
Rubio’s office didn’t respond when asked how he’d vote on the bill.
Collins said in an interview with Bloomberg News in October that she doesn’t favor a rate cut at the top end of the income scale. “I do not believe the top rate should be lowered for individuals who are making more than $1 million a year,” she said. This week, she said she will wait to decide her vote until after a final bill is made public. That may happen as soon as Friday.
GOP leaders are working on melding different bills that passed the House and the Senate in one final compromise package. This week, details of their provisions have begun leaking, including a plan to cut the top individual income tax rate to 37 percent from 39.6 percent, a move that would benefit those with incomes above $470,000 a year.
The change in the top rate was among a flurry of revisions that emerged Wednesday as GOP leaders scurried to finalize tax legislation in time for Trump to sign it next week, part of an effort to secure a signature legislative victory before the end of 2017. The changes included proposing a new corporate tax rate of 21 percent -- one percentage point higher than Trump and congressional leaders had proposed this fall, but still far lower than the current 35 percent.
Congressional leaders said they hope to release final legislative text by the end of this week and pass their compromise legislation by the middle of next week. The Senate is likely to act first -- a vote that could come as early as Tuesday.
“I think we’re in good shape,” said GOP Senator Pat Toomey of Pennsylvania, who has been a key tax negotiator throughout the debate.
Success hinges on holding 50 of the 51 GOP senators who voted to approve the Senate version of the tax bill earlier this month; all 48 Democrats voted no.
The lone Republican who voted “no” on Dec. 2, Senator Bob Corker of Tennessee, also hasn’t disclosed how he’d vote on final legislation. But Corker—who has cited his concern that the $1.4 trillion tax cut would increase federal deficits—said Wednesday that he saw no new developments to address that issue. That makes the votes of both Collins and Rubio critical.
Rubio met Wednesday afternoon with Senate Majority Leader Mitch McConnell, but there was no indication that GOP leaders would adopt his proposal to make the child tax credit refundable against income and payroll taxes.
Collins has conditioned her support for the tax bill on various items with unclear fates, including the passage of Obamacare stabilization measures by the end of the year.
“I think she will be happy with” the way it turns out, said Senator John Thune of South Dakota, the No. 3 Republican. One of Collins’s goals—preserving and temporarily enhancing a medical-expense deduction for individuals—will be part of the compromise legislation, according to senior congressional aides.
However, House Republicans moved forward with a plan that would dare Senate Democrats to shut down the government next week if they don’t accept a military spending bill paired with a measure to keep the rest of the government open after December 22.
House Republicans didn’t include Obamacare insurance subsidies or reinsurance provisions in their bill, although Walden and other lawmakers acknowledged that this could be added by the Senate. Collins has made her vote on the tax bill contingent on passage of the Obamacare provisions.