President Donald Trump called on Democratic lawmakers Wednesday to get on board with the Republican tax blueprint and revive the “middle-class miracle.” But the more Democrats dove deep into the plan, the more his bipartisan goal sounded like a long shot.
The GOP’s nine-page outline, from which the House and Senate will now begin writing separate bills featuring tax cuts and code changes, is scant on details. The document proposes individual and corporate rate cuts, doubling the standard deduction for single and joint filers, eliminating most itemized deductions, expanding the child tax credit, repealing the so-called estate tax, and making it less painful for companies to return profits to the United States.
The so-called Big Six tax negotiators crafted the GOP framework: House Speaker Paul D. Ryan, Senate Majority Leader Mitch McConnell, House Ways and Means Chairman Kevin Brady, Senate Finance Chairman Orrin G. Hatch, Treasury Secretary Steven Mnuchin and White House chief economic adviser Gary Cohn.
Congressional panels will be left to craft several contentious rules and set which income levels would fall into the individual tax brackets, according to the framework. That’s where Trump wants Democrats to get involved. His aim: Democrats’ involvement will lead to their support of the final product.
“Tax reform has not historically been a partisan issue — and it does not have to be a partisan issue today,” Trump said Wednesday in Indianapolis. “There is no reason that Democrats and Republicans in Congress should not come together to deliver this giant win for the American people and begin the ‘middle-class miracle’ once again.”
“We need Washington to promote American jobs instead of obstructing them,” the president said, later calling the U.S. tax code a “relic.”
Even as Republican lawmakers move ahead with plans to advance the tax legislation using the budget reconciliation process, which would allow a bill to pass the Senate with a simple majority, Trump continued to push for a bipartisan measure.
The two parties should come together finally to give the “working person” some help, he said. He singled out Indiana Democratic Sen. Joe Donnelly.
“If Sen. Donnelly doesn’t approve it … we will come here, we will campaign against him like you wouldn’t believe,” Trump said before a crowd of the senator’s constituents. “I think we’ll have numerous Democrats come across because it’s the right thing to do.”
The GOP blueprint would eliminate the estate tax, putting vulnerable Democrats who represent agriculture-heavy states in a quagmire. Trump called the tax “a disaster for this country … and so many farms.”
Democratic lawmakers from both chambers are not ruling out supporting what eventually will hit the House and Senate floors after bills emerge from the tax-writing panels.
The president’s team sees plenty in the Republican framework for Democrats to support, including a proposed expansion of the child tax credit, a White House official said before Trump departed for the Hoosier State.
“I’d think anyone who wants to empower the middle class and give Americans the tools to rise up the economic ladder, Republican or Democrat, should be particularly excited,” the White House official said.
Specifically, the White House sees its “rough doubling of the standard deduction” as a sweetener for Democrats because it would “effectively create a larger zero tax bracket,” the official said.
The Trump administration contends it is proposing a major simplification of the federal tax code that would “benefit those who don’t have an army of tax attorneys,” the official said. The White House also wants to entice Democrats with the blueprint’s proposed slashing of the corporate tax rate from 35 percent to 20 percent, which would theoretically make American firms more competitive and incentivize them to bring trillions of dollars in profits back to the U.S. from other countries.
Trump bent toward Democrats on the corporate rate Wednesday as he left the executive mansion for Indianapolis when he called the proposed 20 percent rate “my number.”
“I’m not negotiating that number. I am not going to negotiate. … That’s the number I wanted to get to,” he said. “I wanted to start at 15 to get there. We really had to start there because of the complexity of the numbers, but 20 [percent] is a perfect number.”
The White House intends to pressure Democrats — especially vulnerable incumbents — by painting a massive tax deal as the one action lawmakers and the administration can strike to rev up the economy.
“There’s wide consensus that this is the single biggest thing we can do to stimulate significant economic growth, which will lift up everyone,” the White House official said.
Some Democratic lawmakers said Wednesday they are very much open to trying to find a way to vote for a tax overhaul.
“You’re damn right,” said Sen. Jon Tester when asked if he is willing to support the final bill if it meets most of his criteria.
Tester said the focus should be on small businesses and middle-class families. Trump carried Montana by 21 points last fall.
“If it is about helping middle-income people and small businesses, you’re going to find many a receptive ear among many Democrats,” said Virginia Sen. Tim Kaine, last year’s Democratic vice presidential nominee. It would be difficult for many Democrats to support a bill that lowers the tax rate for the wealthiest Americans, Kaine said.
The Trump-GOP framework would lower the top individual tax rate from 39.6 percent to 35 percent.
Because of that and other provisions, some senior Democratic members are already predicting the GOP will fail to clear Tester and Kaine’s bars — by a lot.
“The superlatives never match the specifics,” said Rep. Lloyd Doggett of Texas, the top Democrat on the Ways & Means Tax Policy Subcommittee. “What President Trump and his Republican cohorts say this plan is, it isn’t. The future of this bill depends upon how quickly the truth can catch up with the lie.”
Senate Minority Leader Charles E. Schumer told reporters Wednesday the Trump-GOP plan “socks it to the middle class” with bait-and-switch provisions while also raising rates on the poorest Americans.
“Republicans are again raising taxes on working-class Americans” so they can provide the richest ones a “massive cut,” the New York Democrat said. Trump and Republicans have no real argument when they say large companies would use a reduced corporate tax rate to create new jobs, he said.
As the president pressured Democrats like Donnelly and predicted a bipartisan outcome, some members of his own party were more melancholy.
“Tax reform takes intestinal fortitude,” said Tennessee Sen. Bob Corker, who announced Tuesday he will not seek re-election next year. “There’s no way … anything that adds to the deficit … is going to pass.”
The tax effort will be far more difficult than two health care tries that fell short, Corker said.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said any tax outline without details about how the cuts would be fully paid for was a “fiscal fantasy.”
The Senate’s No. 2 GOP leader, John Cornyn of Texas, said the framework only lays the foundation and Republicans will need time and effort to get a bill to Trump’s desk.