Politics

'Phase Two' of Tax Cuts? What Is Trump Talking About?

GOP source: Lighthearted or not, president's idea is going nowhere

President Donald Trump greets mostly Republican members after addressing a joint session of Congress in February 2017 as House Ways and Means Chairman Kevin Brady (clapping) looks on. Democrats were quick to exit the floor. (Tom Williams/CQ Roll Call)

A second Republican-crafted tax overhaul bill? In a highly competitive midterm election year? President Donald Trump keeps suggesting Republican lawmakers should do just that.

Trump and Republicans late last year relished his lone legislative feat, a tax bill that slashed rates while also opening new Arctic oil drilling and nixing Barack Obama’s individual health insurance requirement. He threw a celebration party with all congressional Republicans on the White House’s South Portico and insisted on signing the bill into law several days early in a hastily arranged Oval Office session.

During public remarks — both at official White House events and campaign rallies — he almost always brings up the tax law. He touted the tax cuts Wednesday during a roundtable with private-sector officials in St. Louis as they gushed about the law’s impacts on them personally, their employees and their businesses. And during a Saturday rally in Pennsylvania for GOP House candidate Rick Saccone, Trump urged the crowd to go vote for him Tuesday because “we need him. We need Republicans. We need the votes. Otherwise, they are going to take away ... your tax cuts.”

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At least three times since Feb. 1 — and twice this week alone — the president has suggested Republicans need to team up with him again for “round two” of tax rate cuts and code alterations. He revealed Wednesday that House Ways and Means Chairman Kevin Brady is working with him to write a second measure.

But the president's first comments about a second bill could be viewed as him just ribbing the Texas Republican, whom he has teased about working around the clock to get the GOP tax law crafted and to his desk.

“We’re now going for a phase two. We’re actually going for a phase two,” Trump said Wednesday. “It’s going to be something very special. Kevin Brady’s working on it with me.” He even contended that Democrats will have a “big incentive” to support the second bill.

Trump singled out Brady on Monday during an event at the White House, telling him, “Kevin, are we going for an additional tax cut, I understand?”

“He’s the king of those tax cuts. Yeah, we’re going to do a phase two,” the president said. “I’m hearing that.”

The audience, there to see the president honor the World Series Champion Houston Astros, responded with a collective laugh. A lighthearted Trump smiled, but persisted in a serious tone: “We’re actually very serious about that, Kevin. So it’s good.”

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Those predictions of a “phase two” came after Trump went to the GOP policy retreat in West Virginia on Feb. 1 and said this while addressing Brady: “Maybe we’ll do a ‘phase two,’ I don’t know. We’ll do a phase two. Are you ready for that, Kevin? Huh? I think you’re ready. ... We’ll get them even lower.”

Asked just what the president is referring to and whether he was indeed working on a new tax overhaul bill, a White House official replied succinctly: “He was joking.”

But was he?

A Ways and Means spokeswoman referred a reporter to comments Brady made Wednesday on Fox Business. “We are,” he replied when asked if a second tax bill is in the works.

“We think even more can be done,” Brady said. “While the tax cuts for families were longterm, they’re not yet permanent. So we’re going to address issues like that. We’re in discussions with the White House, the president, on this issue.”

Brady and other Republicans dropped an idea earlier this week to include tax code fixes in a coming omnibus spending bill as Senate Minority Leader Charles E. Schumer, D-N.Y., said his caucus would only sign on if they got code changes they want in return.

Further muddying the waters about how serious Trump and Brady are is an audio recording of Trump’s off-the-cuff remarks at a Wednesday evening GOP fundraiser in Missouri that shows how the president often says things in certain terms even when he later admits he was uninformed about the subject matter.

Trump told Republican donors he once told Canadian Prime Minister Justin Trudeau Canada enjoys a trade surplus with the United States despite having “no idea” if that was true, according to the Washington Post.

Any Republican-crafted tax measure almost certainly would need special rules to allow it to pass the Senate with 51 votes — and even then it likely would not be a sure thing. And only a budget resolution can unlock those rules, known as “reconciliation.” GOP leaders have shown no inclination to even craft, much less pass, a budget resolution this year, complicating Trump’s idea — serious or not.

Brady would only commit to a timeline of “this year” for rolling out some “new, good ideas.” However, he did not commit to moving a second measure in 2018. 

And one GOP source said that is for a good reason.

“I think the president enjoyed the tax reform process and wants more of it,” said one Republican source with knowledge of the situation. “But, of course, we can’t do that this year, and no one on the Hill is considering it at all.”

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