GOP debates tax cuts vs. tax reform

Republicans are looking for fast action on tax cuts after burning up President Trump’s first 200 days in office without any major legislative accomplishments.

The problem? Lawmakers remain divided over how to move forward with tax reform and have yet to pass a budget that would unlock a fast-track process for preventing Democrats from filibustering their legislation.

The stakes for the GOP are enormous.

Trump’s approval rating is at a record low for this stage of a presidency, and GOP lawmakers face pressure to score a big win before the 2018 midterm elections.

“It’s critical,” said Republican strategist Vin Weber. “We’re in danger of the notion that Republicans can’t govern the country being set in people’s minds and becoming very difficult to dislodge.”

“Action before the end of the year, that’s the time I would use, seems to me to be really, really important,” he added.

The biggest problem for Republicans is agreeing on the scope of their potential tax package.

An increasing number of Republicans want to scale back the goal of comprehensive tax reform in favor of the narrower goal of tax cuts.

They want to find what is readily achievable and move forward quickly, before it becomes more difficult to pass legislation in a midterm election year.

GOP lawmakers fear losing momentum by becoming bogged down in a complex and controversial negotiation over closing tax credits and loopholes, which would draw pushback from various special interests.

“I would like to set a goal of trying to get done as soon as we can and by then would be a good goal,” Sen. Mike CrapoMike CrapoDems grill Trump bank regulator nominees Overnight Regulation: House votes to repeal forced arbitration rule | Dems look to ban controversial pesticide | House panel wants to hear from tech CEOs on net neutrality Overnight Finance: House votes to repeal arbitration rule | Yellen, Cohn on Trump’s list for Fed chief | House passes Russia sanctions deal | GOP centrists push back on border wall funding MORE (R-Idaho), a senior member of the Senate Finance Committee, said of the Thanksgiving timeline.

“It’s a desire to get as much work as we can in before the year ends,” he added.

Former Speaker Newt Gingrich (R-Ga.) has made this argument in public and in private meetings with GOP lawmakers.

Senate Finance Committee Chairman Orrin HatchOrrin HatchFive tough decisions for the GOP on healthcare GOP debates deep cut to corporate tax rate Overnight Healthcare: GOP states move to cut Medicaid | Senate passes key FDA funding bill MORE (R-Utah) also wants to move a tax package quickly, as do GOP Sens. Roy BluntRoy BluntFive tough decisions for the GOP on healthcare Lacking White House plan, Senate focuses on infrastructure DeVos abandons student loan servicing overhaul MORE (Mo.) and Roger WickerRoger WickerOvernight Cybersecurity: Trump signs Russia sanctions bill | Senate panel advances cyber scholarships bill | More victims identified in Mexican spyware case Senate panel advances bill to boost federal cyber scholarships Overnight Cybersecurity: Hackers breach voting machines | Kelly’s move to White House leaves void at DHS | House panel presses agencies for info on Russian cyber firm MORE (Miss.), two Republicans close to Senate Majority Leader Mitch McConnellMitch McConnellFive tough decisions for the GOP on healthcare McConnell on healthcare failure: ‘Feel better, Hillary Clinton could be president’ George Will warns ‘grotesque’ is becoming normal for GOP MORE (R-Ky.).

“If you’re going to get them done they got to be done about that time because you then get into some very perilous times after that and a lot of slowdowns after that,” Hatch told The Hill of a November timeline.

Not everyone is ready to move on from tax reform, however.

A spokeswoman for Hatch said that while he wants to take action this fall, he has consistently called for comprehensive tax reform and isn’t ready to give up on the possibility.

Speaker Paul RyanPaul RyanGOP debates deep cut to corporate tax rate 5 things members of Congress are doing over August recess Paul Ryan: Intel leaks ‘the problem of the leaker, not the journalist’ MORE (R-Wis.) backs a comprehensive restructuring of the tax code, as does the White House.

Ryan promoted tax reform at a town hall meeting in Burlington, Wis., on Friday, setting a fall timeline for action.

“We’re not going to allow the setback in the Senate on healthcare to knock us off track with our plans for tax reform in the fall,” he told constituents.

Some members of the Senate Finance Committee also want a more ambitious tax reform package — something Congress hasn’t passed since 1986.

Sen. John ThuneJohn ThuneTrump turns on GOP Congress Lacking White House plan, Senate focuses on infrastructure Overnight Finance: Trump signs Russia sanctions bill, rips Congress | Trump plan would cut legal immigration | Senate confirms labor board pick | House Budget chair running for governor | Regulator takes step to change ‘Volcker Rule’ MORE (R-S.D.), a member of the Finance panel, argued that some more ambitious changes need to be considered, such as a moving to a territorial system that would not tax corporate profits earned overseas. 

“An issue that has favor of some of our members is doing something smaller, just an individual rate cut and push the other stuff until later, but I don’t think we want to give up on comprehensive [reform],” Thune said.

“My goal is to do a big bold reform bill. I know there are some advocates out there for just doing something small and kind of incremental, but that doesn’t solve most of our problems,” he said.

Republicans also must get a budget passed to move to tax reform.

House Republicans have been divided over the budget and were unable to agree to a measure before leaving for the August recess. The Senate also has yet to do a budget.

Republicans need a blueprint for tax reform because it would allow them to pass tax legislation through the Senate on a majority vote, preventing a Democratic filibuster. Republicans used the same rules in their failed effort to pass ObamaCare repeal legislation.

The House has yet to pass a budget resolution because of tensions between the GOP leadership and the conservative House Freedom Caucus, which wants deeper cuts to mandatory spending than the pending budget draft calls for.

House conservatives also want tighter guidelines for tax reform after they felt burned by the evolution of the ObamaCare repeal legislation.

Another problem for lawmakers seeking quick action is the congressional schedule.

When lawmakers return, they will face deadlines to fund the government and raise the nation’s debt ceiling by the end of the month. These discussions are likely to dominate the agenda in September.

Congress also faces an end-of-September deadline to finish work legislation to reauthorize the Children’s Health Insurance Program — a program under the Finance panel’s jurisdiction.

The panel is not expected to mark up tax legislation next month, and given the unfinished work on the debt ceiling and appropriations bills, it may be difficult to pass a budget by the end of September.

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