House Speaker Paul D. Ryan (Wis.) and his fellow Republicans celebrated crossing off a big one from their tax bill to-do list this week: Getting their bill through a key committee. The full House of Representatives could vote on the bill as early as next week. Meanwhile, Senate Republicans unveiled their tax package Thursday.
There was a lot of momentum for Republicans this week on tax reform. But look a little closer, and you'll see that the process was also beset with struggles that underscore some major cracks in their plan.
Here's a rundown of the Republicans' not-so-great great few weeks on tax reform — and how the entire plan could still derail.
Since its release Thursday, there are already enough potential “no” votes to kill the Senate bill.
At least three Senate Republicans have said they would not support a tax plan that adds too much to the debt, report The Washington Post's Damian Paletta and Mike DeBonis. Retiring Sen. Jeff Flake (R-Ariz.) expressed direct concerns about the Senate GOP plan, citing “staggering national debt by opting for short-term fixes while ignoring long-term problems for taxpayers and the economy.”
Three “no” votes is one too many for GOP leaders, who are trying to pass this tax plan in the Senate with only Republicans. They hold 52 seats in the chamber, which was already an extremely tight margin.
Even if they get a bill through the Senate, GOP leaders will only be halfway done: They still need to square it with the House bill, which has some major differences.
They are losing a public opinion battle about whether their plan helps the middle class.
Half of Americans oppose the plan President Trump and Republicans outlined in September, according to new Washington Post-ABC News polling. They don't believe it will help the middle class more than it will help the wealthy.
Independent analysts say Americans are right to be skeptical. The House bill would clearly cut the tax rates for businesses and the wealthy, but for people lower on the income scale, it would provide a mishmash of tax cuts and lost deductions. It would expand tax credits for families and nearly double the standard deduction, but the bill also would roll back popular tax deductions, such as allowing some people to deduct state and local income taxes they pay on their federal returns. That could raise taxes overall on some Americans — at least 10 million, one analysis found.
This week, Ryan got dinged by The Post's Fact Checker for originally saying “everyone” will get a tax cut; that's not true. Independent analysis says all income levels would see a tax cut under the House bill for the first year it's implemented, though taxes could rise in the next decade.
Republicans need to find a way to change perceptions about who their tax plan would help, and quickly. They need the tax reforms to show any substantial accomplishments this session: Their various bills to roll back Obamacare polled in the teens for popularity — and didn't make it through Congress.
The president is a complicating factor.
Republicans have already had to publicly disagree with or even ignore President Trump on whether 401(k) plans would be altered (he didn't want to touch contributions, while House Republicans wouldn't rule it out), how much to cut the corporate tax rate (he originally wanted it lower than 15 percent) and whether to use this tax plan to also implode Obamacare by repealing the individual mandate (Trump suggested it, Republicans haven't taken him up on that).
Trump also isn't helping by being off-message. In a call with Senate Democrats this past week to convince them to get on board, the president said his accountant told him he'd be a “big loser” under the proposal.
During that call, Trump also reportedly threw House Republicans' carefully crafted bill under the bus, telling Senate Democrats they'll like the their chamber's version much better.
After Tuesday's election results, the pressure is ON
Part of the urgency on a tax bill comes from the fact Republicans are 10 months into governing without a major legislative victory. Whatever pressure was on Republicans before this week to get a tax bill done just got dialed up to 11.
In state and local elections Tuesday across the nation, Republicans got whomped. Exit polls showed Virginia voters especially wanted to stick it to Trump. Republicans on Capitol Hill read Tuesday's results as a warning sign they've got to get tax reform done sooner rather than later.
Asked whether the election could complicate the GOP's tax plan by putting more pressure on lawmakers, Sen. Orrin G. Hatch (R-Utah), one of the top tax-writing senators, responded, "It could, because the elections went against the Republicans.”
The distractions are on, too
Senate Republicans unveiled their tax plan Thursday — and then the allegations against Roy Moore, the GOP candidate for Senate in Alabama, sucked the air from the room. Instead of promoting the bill, GOP senators spent the afternoon deciding whether to call for Moore to drop out of the critical Senate race after being he was accused of initiating a sexual encounter with 14-year-old girl when he was 32.