Sen. Susan Collins said Republican leaders have assured her that automatic cuts to entitlement programs that would be triggered if the GOP tax overhaul becomes law would be stopped.
The reductions, which could amount to $25 billion in cuts to Medicare, would occur under the 2010 statutory pay-as-you-go law unless Congress approves a waiver.
“I would not even be considering voting for this bill,” the Maine Republican said of the tax plan, if there weren’t a path to stop the automatic cuts.
Collins said she wrote to Senate Majority Leader Mitch McConnell with her concerns, and the Kentucky Republican responded that the pay-go waiver would be included in some other vehicle before the end of the year, perhaps the continuing resolution, which needs to move next week before the current stopgap’s Dec. 8 expiration.
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Speaking with reporters gathered at a Christian Science Monitor breakfast Thursday, Collins outlined several other tax concerns that she needs to see resolved before casting a final vote.
“It would be very problematic for me if the [state and local tax] deduction is not in the Senate bill,” she said of the so-called SALT deduction.
Collins said she has filed an amendment to the Senate tax bill ahead of the tax reconciliation “vote-a-rama” that would mimic the House version language on a deduction for property taxes capped at $10,000.
“I’m trying to be a realist on what I can get through,” she said. “If I had my druthers, I would expand the SALT deduction to include income tax as well as property tax.”
The Collins amendment would be offset with a corporate tax rate of 21 percent, one percentage point higher than the Finance Committee-reported bill. It also would maintain the current 39.6 percent top tax rate.
“SALT has been in the tax code since 1913, when we first started an income tax,” Collins said. “If you don’t have a SALT deduction, you’re effectively engaging in double taxation.”
She did not share the concerns of some conservative groups that too many amendments providing for small upticks of the corporate rate could be adopted, though she said she did not see a need for going all the way down to 20 percent.
“I support the Rubio-Lee amendment, but I have an even better one,” Collins said.
Her version would provide for a broader refundable credit for dependent care expenses across the board.
Collins said helping lower-income families with such expenses would remove disincentives for people not to be in the workforce. She said her version would be paid for in part by ending preferential capital gains tax treatment for “carried interest” income of investment fund managers — their cut of gains invested by their clients, typically taxed at 20 percent.
While she did not place as much emphasis on it, Collins also said she expects a Senate vote on lining up the deadlines between individual tax provisions that are set to expire and the permanent lower corporate rates.
She did not seem sure whether the vote would be for a sunset of the corporate rates or making more individual provisions permanent.
“From my perspective, we ought to be treating both the same,” the senator said.
Collins did have some concerns about a “trigger” mechanism being promoted by Sen. Bob Corker of Tennessee and several other Republicans.
“You don’t want to raise taxes if the economy is going into a recession,” she said.
Collins also signaled opposition to a trigger that could cut spending instead, sought by several GOP senators and outside conservative activists. She said such a trigger might cut unemployment insurance and Medicaid benefits in a sliding economy.
Collins was keeping an open mind to the process, but she seemed to have no intention of pre-announcing a vote for or against the reconciliation bill.
“Who knows what’s going to happen on the Senate floor during the vote-a-rama,” she said. “I need to wait to see what happens.”