President Donald Trump on Tuesday said he wants to work with Republicans and Democrats on a “pro-American” tax overhaul — at the same time threatening a vulnerable Democratic senator if she didn’t vote the way he wanted.
And he will meet next week to discuss tax reform with a group of key tax-writers that will include no Democrats.
Trump, speaking at a manufacturing facility in Springfield, Missouri, said that if Sen. Claire McCaskill votes against the emerging plan, “you have to vote her out of office.”
“She’s got to make that commitment,” he said of the Missouri Democrat.
The speech was the White House’s official kickoff of a push to build public support for a tax overhaul package. White House aides say the president will huddle with key lawmakers and hold other events throughout the fall.
On Tuesday, Trump will meet with the “Big Six” group of tax writers Tuesday at the White House, a White House official told CQ Roll Call on Wednesday. That group of heavy-hitters includes: Speaker Paul D. Ryan, House Ways and Means Chairman Kevin Brady, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Senate Finance Chairman Orrin Hatch, and National Economic Council Director Gary Cohn.
One member of that group, Ryan, described Trump and congressional Republicans as “united in our determination to get this done.” In a statement, Ryan called a tax bill the House Republicans’ “top priority.”
Another, Brady, said he was encouraged by Trump’s remarks.
“He explained clearly today why Washington must act now on pro-growth tax reform that will create jobs, grow paychecks, and improve the lives of all Americans,” Brady said in a statement.
While no Democrats will be in the room, the president struck a bipartisan tone — though he did label the opposition party “obstructionists,” as he often does, at one point.
Trump declared himself on a tax overhaul “fully committed to working with Congress to get this job done.”
“And I don’t want to be disappointed by Congress. Do you understand me?” he said, pointing to GOP members seated near the stage. “I think Congress is going to make a comeback, I hope so. I tell you what: the United States is counting on it.”
Conservative leaders are firmly behind Trump’s call for a bill to slash rates and simplify the tax code.
“Tax relief is too important for Congress to keep fumbling it,” said Edwin Feulner, founder and president of the Heritage Foundation, a conservative think tank. “The right package of cuts will unleash economic growth — creating jobs, opportunity and prosperity for all.
But he and other top conservatives acknowledge the Trump-GOP tax push will be an uphill fight.
“It seems simple enough, but so is Obamacare repeal, and lawmakers have — so far — managed to bungle that,” Feulner said.
Feulner has some advice for his fellow Republicans, including Trump: Craft a plan built around the assumption that they will “assume they’re going to extend all the expiring tax provisions they extend every year.” Assuming otherwise in their tax overhaul plan, he cautioned, would add $460 billion in tax hikes to the plan’s budget baseline — and could sink it.
“Tax cut opponents can point to a much larger deficit prediction and say, ‘Sorry, we can’t afford it,’” Feulner said. “Using the higher baseline could mean almost a half-trillion dollars less in tax cuts over 10 years.”
Democrats already are raising red flags.
Senate Minority Leader Charles Schumer said on a press call Wednesday that Trump is trying to sell a GOP tax overhaul as a populist measure. But if the plan “leaves crumbs for the middle class, the American people are going to rise up against him.,” the New York Democrat told reporters.
Schumer said Democrats have three principles they believe should guide a tax code rewrite: that it cut “not one penny” in taxes for the top 1 percent and not burden the middle class; that it move through regular order; and that it not add to the deficit.
“This is going to be one of the biggest fights of the next three, four months,” Schumer said. “Democrats are ready for it.”
Some left-leaning experts already are predicting Republicans, despite using “regular order” (read: the committee bill-writing process) to write the tax plan, they are headed for a repeat of their failure thus far to pass a health care overhaul bill.
“The Republican tax reform agenda is built on equally contradictory goals,” said Henry Aaron of the Center for American Progress, a left-leaning think tank. “Republicans are committed to cutting tax rates because, they believe, taxes are too high and stifle economic growth. But they also think that federal budget deficits and rising debt hamper economic growth. So, the key question is whether one can one cut rates without boosting deficits and debt.”
A doomed agenda?
The more President Donald Trump talked Wednesday about a still-emerging tax overhaul package, the more it became clear why he plans a take his sales pitch across the country: Without it, his agenda could be doomed.
The president’s message essentially was one that showed without the rate and code changes he wants, his pledge to “make America great again” will be in serious jeopardy. That’s because his promises to create jobs, boost long-stagnant wages, revive the country’s manufacturing sector, make American companies more globally competitive, and rejuvenate a languid middle class all are directly linked to passage of the first major tax overhaul in three decades.
“The foundation of our job-creation agenda is to fundamentally reform our tax code for first time in over 30 years,” he said, succinctly summarizing what is at stake for his presidency, especially after promising — but thus far failing — to deliver on his campaign promise to repeal and replace Barack Obama’s 2010 health law.
Trump told the audience in Springfield of his desire to “bring back Main Street” in large part by reducing what he calls the “crushing tax burden” anchoring both businesses and workers.
“Our self-destructive tax code costs Americans millions and millions of jobs,” Trump said, as well as “trillions of dollars, and billions of hours spent on compliance and paperwork.”
The much-anticipated policy address featured few new specifics, as predicted Tuesday by White House aides who briefed reporters on Trump’s plans for the remarks.
The president did, however, lay out his four “basic principles” for a tax overhaul bill: a simpler tax code that is easier for “everyday” Americans to understand; tax code changes that lower the corporate rate from 35 percent to 15 percent, and thereby spawns new jobs and bigger salaries; changes tailored for middle-class families to, as he put it, “put more money into [their] pockets; and incentivizing companies to bring corporate profits they took abroad back home.
Trump lauded former President Ronald Reagan for overseeing the last major tax overhaul, which, among other things, lowered the corporate tax rate to near current levels. Since then, however, other countries have countered by going even lower.
In the United States, “tax laws have tripled in size” and even the most basic of tax forms is too meaty and “not understandable,” Trump said. What’s more, loopholes have “crept back into the system,” something he called a “source of frustration for tens of millions of Americans” because they benefit only the wealthiest citizens.
(To that end, at one point Trump joked the changes he is seeking could hurt rich guys like himself. He followed the quip with this: “But we’re doing the right thing.”)
On changes he says will make American businesses more competitive — while also creating more jobs at home — Trump was blunt: “If we don’t get tax cuts and reform approved … [new] jobs and our country cannot take off the way they should.”
The same likely would be true of his presidency, which is tethered to his promises on both creating jobs and making the country “great” again.
Trump spoke in dire terms, saying America’s 35 percent corporate rate is much higher than those of its economic rivals, including France, Germany, Ireland, South Korea and others.
“We have totally surrendered,” the populist candidate-turned-president said. “We’re not surrendering anymore.”
Reducing the corporate rate to 15 percent would “make us highly competitive,” he claimed.
Notably, Trump spent much more time discussing those two “principles” than the next two.
“We will lower taxes for middle-income Americans so they can keep their hard-earned paychecks,” he said of his third goal. But if middle-class relief is included in any eventual bill that reaches his desk, Trump said more Americans would have more money to spend on American products.
“It will be a beautiful thing to watch,” he said.
Trump served up some red meat to the friendly audience, which included Missouri’s own GOP Sen. Roy Blunt, who rode to his home state aboard Air Force One with the president.
“We believe that ordinary Americans know better how to spend their money than Washington,” Trump said.
Trump claimed his objective to bring back taxable corporate profits could return $3 trillion to $5 trillion to the U.S. He said lawmakers and his own negotiators should do so by making it less “punitive,” “bureaucratic” and “difficult” for companies to bring that money back home.
Trump said he wants to work with Republicans and Democrats on a tax overhaul plan that is “pro-growth, pro-jobs, pro-worker and pro-American.”