GOP Tries to Win Over Tax Bill Holdouts

WASHINGTON (AP) -- Republicans are struggling to win over resistant GOP senators to a sweeping tax bill that President Donald Trump and their party have set as a vital political goal.

Trump, who has assured lawmakers there will be changes, is traveling to Capitol Hill on Tuesday to personally lobby Republican senators. Senate GOP leaders hope to pass the bill this week.

Anxious to pass a tax overhaul package by year's end with an eye toward the 2018 elections, Trump and the GOP leaders scrambled Monday to make changes to the Senate version to woo the Republican holdouts. Republicans have only two votes to spare in the Senate, where they hold a 52-48 edge and anticipate Vice President Mike Pence breaking a tie if needed.

Senate Republicans indicated they still had a way to go to secure the votes.

"We're making progress, minute by minute, hour by hour, day by day. But we're not there yet," said Texas Sen. John Cornyn, the No. 2 Republican in the Senate.

Among the holdouts are deficit hawks who worry that tax cuts for businesses and individuals would add to the nation's mounting $20 trillion debt, small business advocates who say the bill doesn't cut those companies' taxes enough, and others with reservations.

That means Trump and the GOP leaders have to balance competing demands. While some resistant senators fear the package's debt consequences, others want more generous tax breaks for smaller businesses.

The overall tax package blends a sharp reduction in top corporate and business tax rates with more modest relief for individuals.

To mollify the deficit hawks, the Senate GOP leaders are considering a "trigger" that would automatically increase taxes if the legislation fails to generate as much revenue as they expect.

The GOP leaders' efforts came as a second Republican senator, Steve Daines of Montana, announced Monday that he opposes the tax bill in its current form. Previously, Sen. Ron Johnson, R-Wis., said he opposed the bill, leaving the Republicans no room for error. Both senators complained that the bill favors large corporations over small businesses.

Trump suggested he's open to making unspecified changes to the way millions of "pass-through" businesses are taxed. Those are businesses whose profits are passed on to the owners, who report the income on their individual tax returns. The vast majority of U.S. businesses, big and small, are taxed this way.

Daines and Johnson said the current bill doesn't cut taxes enough for these types of partnerships and corporations. Johnson gets substantial income from such companies, including a manufacturer he helped found in Wisconsin and a commercial real estate company, according to his financial disclosure statements.

In a boost for the legislation, conservative Republican Sen. Rand Paul of Kentucky said he would back the measure.

At the White House, where he hosted Republican members of the Senate Finance Committee, Trump insisted that the bill would help all Americans.

"I think it's going to benefit everybody," the president said. "It's going to mostly benefit people looking for jobs more than anything else, because we're giving great incentives."

A new estimate by congressional analysts says the Senate tax bill would add $1.4 trillion to the budget deficit over the next decade. But GOP leaders dispute the projection, saying tax cuts will spur economic growth, reducing the hit on the deficit.

Many economists disagree with such optimistic projections. The trigger would be a way for senators to test their economic assumptions, with real consequences if they are wrong.

"Do we have realistic numbers and is there a backstop in the process just in case we don't?" asked Sen. James Lankford, R-Okla.

"We should build in the 'What if?' What if this doesn't work?" Lankford said. "What changes might be needed in the tax code in the days ahead, to be able to adjust in what scenario?"

Sen. Bob Corker, R-Tenn., said the Trump administration and the Senate leaders are open to some kind of a trigger to increase revenues if the tax plan falls short.

Sen. Rob Portman, R-Ohio, said the trigger is possible. But, he added, the proposal could run afoul of the Senate's byzantine budget rules.

Corker said he spoke to White House Chief of Staff John Kelly and economic adviser Gary Cohn throughout the weekend, and Treasury Secretary Steven Mnuchin was at his Senate office on Monday.

"Very possible," Corker said when asked if he might vote "no" in the Senate Budget Committee on Tuesday, to formally send the tax bill to the Senate floor, if the revenue issue isn't settled. "It's important for me to know we've got this resolved," he said.

Johnson told Wisconsin reporters Monday, "If we develop a fix prior to committee, I'll probably support it, but if we don't I'll vote against it."

Whatever the Senate passes must be reconciled with the House version of the tax bill.

(KA)