Republicans in both the House and the Senate touted progress on tax reform Monday, as they moved toward passing different plans for cutting taxes with the hope of hashing out major differences down the road.
In the House, Republican leaders projected confidence that they have the votes to pass the Tax Cuts and Jobs Act on Thursday, even with major questions still unanswered.
“This vote is about moving tax reform to that next crucial step, and then as the Senate passes it out, their version out, working closely with them to find that final common ground,” said Kevin Brady, the chairman of the House Ways and Means Committee.
Across the Capitol, the Senate Finance Committee kicked off a four-day mark up of its version of the bill. Chairman Orrin Hatch of Utah reassured members that there was “no real cause for concern” about the biggest obvious obstacle to the bill’s passage, namely that it would run afoul of Senate rules by adding to deficits in the long-term. Changes are coming this week, Hatch said.
Although a number of problems could crop up, as of the start of the week Republicans were on track to throw a bill together and put it on President Trump’s desk by the end of the year.
“So the goal obviously is to get all of this wrapped up by Christmas,” White House Office of Management and Budget director Mick Mulvaney said on Fox Business’ Varney & Co. “And I still think not only are we on schedule there, but we’re slightly ahead of schedule.”
The biggest apparent concern of House Republicans, namely that the bill could raise taxes on some families in high-tax states because it curbs deductions for state and local taxes, is for now being left until the two chambers go to conference to sort out a final bill.
The House bill would retain up to $10,000 in deductions for property taxes, while eliminating deductions for state and local income and sales taxes. The Senate version would simply eliminate all such deductions. Senate Democratic Leader Chuck Schumer of New York has tried to discourage House Republicans from voting for a bill by warning that the Senate will push to eliminate the House provision for state and local property taxes.
Brady said that retaining the $10,000 in property tax deductions, a deal he cut with members from states like New York and New Jersey that have high taxes, must stay in the final bill.
“That’s our priority, I’m committed to it, and at the end of the year it’s going to be in the bill,” the Texas Republican told reporters.
To match that $10,000 in property tax relief for people who itemize deductions, legislators in the Senate would have to compromise elsewhere.
Maine’s Susan Collins, regarded by tax reform advocates as one of the Republicans most likely not to support a bill, suggested Monday that the bill’s rate reduction goals could be scaled back to include the $10,000 property tax cap or otherwise redirect tax cuts away from high-income earners and toward middle-income earners or poor families.
Collins, though, said that she wasn’t staking out a position on the bill yet, but rather aiming to improve it.
Intra-party differences about middle-class tax breaks versus lower rates are ones that could be hammered out in conference. The bigger wildcard Monday was President Trump’s tweet, dispatched from the Philippines, calling for repeal of the Obamacare individual mandate to be added to the bill.
“We’re getting close!” the president wrote. “Now, how about ending the unfair & highly unpopular Indiv Mandate in OCare & reducing taxes even further?”
Brady said that such a maneuver remained in consideration for later in the tax reform process.
Adding repeal of the mandate would raise funds, on paper, that could be used to increase the size of the middle-class tax cuts included in the tax package. But it would bring the politics of healthcare, a losing proposition so far for Republicans, into the tax reform debate.
On Monday, though, GOP leaders said they had the votes in the House, and there were no GOP senators who had declared themselves against the bill.