Political News

With health care unclear, Republicans gear up for release of tax reform 'framework'

Posted September 25

Republicans are expected to release a framework this week of their widely-anticipated tax reform plan as the party desperately seeks a legislative victory before the end of the year.

Leaders announced earlier this month they would unveil some details of the plan this week in a "consensus document." But the timeline grew complicated after a last-minute push to repeal and replace the Affordable Care Act surged in attention and soaked up oxygen away from tax reform.

However, with at least three Republicans now opposed or leaning against the bill, the latest health care effort is on thin ice, signaling that tax reform may be back in the spotlight this week, even as efforts are underway to change senators' minds and keep the so-called Graham-Cassidy effort afloat.

Still, leaders of the tax negotiations plan to move forward with their plan to release the framework, though it's unclear just how many specifics will be disclosed.

It's all part of a coordinated effort. President Donald Trump is set to meet with conservative groups Monday to discuss tax reform.

Among those conservatives with Trump on Monday: Marjorie Dannenfelser, president of Susan B. Anthony List; Ed Feulner, founder and acting president of The Heritage Foundation; Tim Goeglein, vice president of external relations at Focus on the Family; Bob McEwen, executive director for the Council for National Policy; Penny Nance, CEO of Concerned Women for America; Tim Phillips, president of Americans for Prosperity; Matt Schlapp, chairman of American Conservative Union; Leonard Leo, executive vice president of The Federalist Society; and Ralph Reed, chairman of the Faith & Freedom Coalition.

Trump will speak about taxes in Indiana on Wednesday, the same day that House Republicans are scheduled to gather for a retreat to discuss the plan. Before then, Republicans on the ways and means committee -- the tax writing panel in the House -- are holding their own retreat earlier in the week.

This comes a week after an agreement on the Senate budget committee was reached to to greenlight a tax reform package that ends up adding as much as $1.5 trillion to deficits over 10 years. While running up debt is normally against GOP fiscal dogma, many Republicans have said they don't mind so long as the cause is tax cuts, which they contend will bolster economic growth.

RELATED: Paul Ryan won't commit to a revenue-neutral tax plan

Republicans want to use budget reconciliation to pass tax reform, a procedural maneuver that would allow the Senate to avoid a filibuster by Democrats and advance a bill with only a 51-vote majority (Republicans currently hold a 52-48 majority).

But to do that, Republicans must first pass a budget resolution in both chambers, and they need to get the conservative House Freedom Caucus members on board. Releasing the framework this week is in part aimed at giving conservatives enough details on tax reform so that they'll sign onto a budget by the end of the month.

Complicating matters further, Sen. Lindsey Graham, one of the authors of the struggling health care bill, sits on the Senate budget committee and told ABC's "This Week" Sunday he would not vote for a budget resolution unless it allowed more time for the health care date beyond September 30, when reconciliation for health care is set to expire.

While very little is known about the tax reform plan, the White House put out a one-page outline in April of its tax goals. Among the priorities were consolidating the number of brackets down to three from seven, lowering of the top individual rate from 39.6% to 35%, doubling the standard deduction, and lowering the corporate tax to 15%, far below its current rate of 35%.

Since then, however, leading Republicans have tempered expectations for such a low corporate rate, indicating a rate in the low 20% range was more achievable.

Negotiators have been meeting frequently throughout the summer in a group called the Big Six, which consists of Treasury Secretary Steven Mnuchin, the President's chief economic adviser Gary Cohn, Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, House Ways and Means Committee Chairman Kevin Brady, and Senate Finance Committee Chairman Orrin Hatch.

Democrats have complained loudly about being left out of the negotiations. Trump has sought to assuage some of their concerns by declaring repeatedly that the wealthy won't benefit from the tax plan.

While a popular talking point, his comments have put congressional Republicans in an awkward position, since many feel that lowering tax rates for everyone, including the wealthy, would help spur the most economic growth.

RELATED: Trump expects -- and will court -- Democratic support on tax reform

Mnuchin, explaining Trump's claim about the wealthy, has said that even if the wealthy get a break in their income tax rates, they ultimately may not pay less because of expected eliminations of loopholes and other tax breaks that they take advantage of.

"There's lots of changes," he said Sunday on CNN's "State of the Union." "We're getting rid of lots of deductions. We're trying to get rid of state and local deductions to get the federal government out of subsidizing it and yes I can tell you the current plan, for many, many people -- it will not reduce taxes on the high end."

With so few details known about the plan, however, it's entirely unclear if the fine print of an actual tax reform bill will match Trump's rhetoric or anything else key Republicans are promising.

This story has been updated.

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