WASHINGTON: Republicans in the US Senate scrambled to salvage their tax plan Thursday after it hit unexpected roadblocks, leaving President Donald Trump still waiting for a major political victory he hopes to secure before year’s end.
Trump had hoped his party would pass the controversial bill as early as Thursday night, handing the White House and Republicans their most significant legislative achievement of his young presidency.
But after 11th-hour negotiations over how to offset the cost of dramatic tax cuts for corporations and more modest cuts for individuals, Senate Majority Leader Mitch McConnell postponed votes until Friday midday.
A tense standoff on the Senate floor threw the bill’s fate into question, after a new projection showed the measure would add $1 trillion to the federal deficit.
The analysis complicated Trump’s argument, shared by many Republicans, that the tax cuts would pay for themselves through additional economic growth—and left some senators mulling adding future tax hikes into the plan to ensure sufficient revenue.
In a dramatic move, three Republican senators refused to vote on a procedural measure until they were assured that more changes could be made to the legislation.
Republicans hold a narrow 52-48 Senate majority. Three defectors would kill the bill, and a handful were showing reservations about a measure that experts say would benefit corporations and the wealthy.
Senator Bob Corker, who has publicly criticized Trump in recent months, wants a “trigger” inserted to raise taxes if revenues fall short of projections. But the Senate parliamentarian told lawmakers that such a mechanism would not be allowed under budget rules.
Republicans ultimately voted to proceed, but the showdown highlighted the delicate balancing act in getting the tax plan across the finish line.
“It doesn’t look like the trigger is going to work,” number two Senate Republican John Cornyn told reporters, according to US media.
One option for boosting revenue would be to raise corporate tax rates after six years, perhaps at half a percentage point annually, Cornyn reportedly said.
The bill as it stands would reduce the corporate rate from 35 percent to 20 percent. Trump has repeatedly called for a 20 percent corporate rate.
Lawmakers were seeking new ways to circumvent the unexpected snags.
Senator Lindsey Graham felt “confident that if there’s a shortfall in the projections that there’ll be a mechanism in the bill to deal with the deficit,” political news site Roll Call quoted him as saying.
But Senator Ted Cruz warned that inserting automatic tax hikes would set a “bad precedent,” because it could force American families into paying higher taxes during an economic downturn.
The legislative psychodrama was shaping up in a way that mirrored Republican efforts this summer to dismantle the Obamacare health law: in a dramatic late-night vote, three Republican senators, including John McCain, torpedoed the repeal that Trump had promised during his election campaign.
McCain said Thursday he backs the tax plan, in part because it would “enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle-class families.”
Some conservatives bridle at seeing their party trample the anti-deficit budget orthodoxy they preached during the Obama presidency: the bill before them would balloon the national deficit by $1.4 trillion over the coming decade, the Congressional Budget Office estimates.
‘Screw them over’
Other senators have raised narrower concerns: over the tax rates for certain smaller companies; deductions for families with children; or a provision, slipped into the legislation, to end the requirement that all taxpayers carry health insurance or pay a fine —a central pillar of Obamacare.
If the legislation passes the Senate, it still must be reconciled with the recently passed House version. The plans differ on some points.
As Republican leaders scrambled to overcome final objections and lock down necessary votes, their essential argument was a simple one: if they fail on tax reform, they can expect major losses in next November’s midterm elections.
Democrats, united in opposition, are arguing that the plan is too expensive and will accommodate only the rich.
Senator Mazie Hirono used some salty language to get the point across.
“Rather than crafting a tax plan that would actually help middle-class families, Donald Trump and the Republican Party have decided to screw them over instead,” she told colleagues.
The Joint Committee on Taxation projected Thursday that the Republican plan, even given the added vitality that tax cuts provide the economy, would add $1 trillion to the deficit.
Senator Angus King warned that Thursday’s showdown plunged Republican efforts to salvage the process into “disarray,” and that a smarter approach would be to hold public hearings on the bill.
“They’re left trying to figure out how to make it whole, and I don’t think they’re going to be able to do it,” he told CNN. AFP