Trump plumps for tax bill, analysts say it expands deficit

Trump speaks about tax reform at the White House in Washington
U.S. President Donald Trump speaks about tax legislation at the White House in Washington, U.S., November 27, 2017. REUTERS/Kevin Lamarque

November 27, 2017

By David Morgan

WASHINGTON (Reuters) – President Donald Trump summoned Senate Republican tax-writers to the White House on Monday to urge passage of a sweeping tax bill that congressional fiscal analysts said separately would balloon the federal budget deficit by $1.4 trillion over a decade.

As Republicans rushed to bring the bill to a Senate vote, possibly as soon as Thursday, the Joint Committee on Taxation (JCT), a nonpartisan unit of Congress, said it would not have time to do a full analysis of it, but estimated it would expand the $20-trillion national debt.

Overhauling the tax code is seen by Republicans as their last chance to score a significant legislative achievement in 2017, which would save them from facing the voters next year with little to show for nearly a year in power in Washington.

Since Trump took office in January, he and his fellow Republicans have passed no major legislation in Congress, despite controlling both its chambers and the White House. Trump has quarreled publicly with several key Republican senators.

Before he met with Senate Finance Committee Chairman Orrin Hatch and four others from the panel, Trump took to Twitter to advocate for last-minute changes to the tax bill as a way to improve benefits for businesses and middle-class Americans.

Trump tweeted: “The Tax Cut Bill is coming along very well, great support. With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass through provision becomes simpler and really works well!”

The Senate plans to vote on its tax overhaul package this week, Senate Majority Whip John Cornyn told reporters.

Despite this sunny outlook, some senior lawmakers still had reservations about the bill and its impact on the deficit and debt, on healthcare and on small businesses.

Senate Republican leaders did not appear on Monday to have enough votes to pass the legislation, with about a half-dozen Republicans viewed as potential ‘no’ votes.

The number of Americans with health insurance would decline by 13 million by 2027 under the bill, which would repeal an Obamacare rule requiring many people to have health insurance or pay a fine, the JCT and the Congressional Budget Office said.

Republican Senator Bob Corker, a prominent fiscal hawk, has said he would support deficit-financed tax cuts only if they boost the economy enough to generate offsetting new revenues.

But because of the bill’s fast-track schedule, an official JCT estimate of that dynamic will not be promptly available.

The Senate bill would slash the corporate tax rate to 20 percent from 35 percent after a one-year delay. It would impose a one-time, cut-rate tax on corporations’ foreign profits, while exempting future foreign profits from U.S. taxation.

The bill would give small business owners a 17.4 percent tax deduction, while also lowering rates for individuals, including top earners, and repealing the Obamacare individual mandate.

Critics noted the measure would raise taxes on some families and potentially make health insurance unaffordable for people with medical conditions.

The Republican-led House approved its own tax bill on Nov. 16. The 100-seat Senate was a graveyard earlier this year for Republican efforts to dismantle Obamacare, former President Barack Obama’s signature health insurance law.

As they did in the Obamacare fight, Democrats were likely to oppose Trump and the Republicans on the tax bill, which the Democrats call a giveaway to the rich and corporations. That would mean Republicans, with a 52-48 Senate majority, can lose no more than two of their own lawmakers to pass the bill.

In a positive sign for Trump’s agenda, Republican Senator Rand Paul said on Monday he would support the bill. Republican Senator Lisa Murkowski has also signaled support.

White House legislative director Marc Short said Republicans were considering making “minor changes” to the bill.

“We’re working to satisfy all the members of the Senate so we can get the most ‘yes’ votes as possible,” Short told Fox News. “We’ve had conversations with pretty much each and every one of them throughout the Thanksgiving holidays. They have some policy concerns but they are all looking to try to get to yes.”

(Additional reporting by Makini Brice, Susan Heavey and Tim Ahmann; Editing by Kevin Drawbaugh, Dan Grebler and Susan Thomas)

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