Senate GOP struggles with deficit in work on budget, taxes

Wednesday, September 13, 2017

WASHINGTON -- Senate Republicans are struggling with how many billions of dollars President Donald Trump's tax-code overhaul will add to the deficit as they work on a GOP budget plan that's a prerequisite to any far-reaching change in the nation's tax system.

Senate Majority Leader Mitch McConnell and GOP members of the Budget Committee met Tuesday with two top Trump administration officials to make progress on forging the budget plan, which is required to stave off potential Democratic blocking tactics and pass the subsequent tax bill only with GOP votes.

The as-yet-undrafted bill to overhaul the tax code is the top priority for Trump and Republicans after the collapse of their effort to dismantle Barack Obama's health-care law. Trump's top economic adviser, Gary Cohn, and Treasury Secretary Steven Mnuchin met with McConnell, R-Ky., and budget panel members.

"From my standpoint, let's set ourselves up for success on tax reform," Sen. Ron Johnson, R-Wis., a member of the committee, said before the meeting.

Mnuchin signaled before the meeting the administration would be open to changes sought by lawmakers to improve the chances for passage of a tax overhaul this year.

In an interview with CNBC, Mnuchin said the administration would "absolutely" consider making tax cuts retroactive to the start of this year if overhaul legislation didn't pass until 2018.

In addition, the administration would consider including an infrastructure spending bill as part of the tax legislation, Mnuchin said.

"This is a pass-fail exercise," Mnuchin said, indicating the critical goal was to enact legislation. "Passing tax reform, which hasn't been done in 31 years, that is a win," he said.

Capitol Hill Republicans have promised the tax rewrite will be "revenue neutral" and not add to the nation's $20 trillion-plus debt, but they are counting on budget maneuvers to find hundreds of billions of dollars to help maximize cuts to corporate and individual tax rates.

For starters, they are going to assume the tax legislation will mean higher economic growth and greater future tax revenue.

Underscoring the president's desire for tax legislation, Trump was hosting a bipartisan group of senators for dinner at the White House on Tuesday, including a trio of moderate Democrats from states Trump won in November and whose votes he'd like to have on a tax bill.

Democratic Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana were to be joined at dinner by Republican Sens. John Thune of North Dakota, Pat Toomey of Pennsylvania and Orrin Hatch of Utah, the White House said.

Manchin, Heitkamp and Donnelly are the only Democratic senators who did not sign a letter addressed to Republican leaders and Trump that said the Democratic caucus would not support a tax overhaul that cuts taxes for the "top 1 percent" or adds to the government's $20 trillion debt.

Heitkamp traveled with Trump aboard Air Force One to an event in her home state last week where he spoke broadly about the tax plan. Trump pitched the senator on the overhaul, calling her a "good woman." Heitkamp said after the event she needs to see the details first.

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