Trump's tax Bill could face Republican opposition

Two senators, each seeking different changes, may prevent it from reaching Senate floor

WASHINGTON • A US Senate Republican tax Bill strongly backed by President Donald Trump is facing potential opposition from two Republican lawmakers, who could prevent the sweeping legislation from reaching the Senate floor.

Senators Ron Johnson and Bob Corker, both members of the Senate Budget Committee, said they could vote against the tax package at a hearing, scheduled for late yesterday, that Republican leaders hoped would send the legislation to a full Senate vote as early as tomorrow. Each senator is seeking different changes to the legislation.

Their opposition could create the first major hurdle for the Republican tax overhaul in the Senate, where infighting killed the party's effort to overturn the Obamacare healthcare law earlier this year.

Mr Corker, a prominent deficit hawk, said he wants his fellow Republicans to add a back-stop measure to prevent tax cuts from ballooning the deficit. Mr Johnson said he wants a bigger tax break for "pass-through" businesses, which include small mom-and-pop enterprises as well as some large, non-corporate businesses.

"If we develop a fix prior to committee, I will probably support it, but if we don't, I will vote against it," Mr Johnson's office quoted him telling reporters.

Republicans have only a one-vote majority on the 23-member Budget committee.

The potential "no" votes surfaced after Congress' Joint Committee on Taxation (JCT) estimated that the Bill would expand the US$20 trillion (S$26.9 trillion) national debt by US$1.4 trillion over a decade.

Republicans have said that economic growth spurred by tax cuts would generate enough new tax revenue to eliminate any new deficit. But Mr Corker said the JCT is not expected to release a full macroeconomic analysis of the tax Bill ahead of a Senate vote, making a safeguard provision necessary.

Mr Corker and other Republican deficit hawks, including Senator James Lankford, have been holding talks with Senate tax writers and the administration about adding a provision that would raise tax rates if revenues fall short of expectations. Republicans see the tax Bill as their last chance to score a significant legislative achievement this year and save face with voters in next year's congressional mid-term elections.

Since Mr Trump took office in January, he and his fellow Republicans have passed no major legislation, despite controlling both chambers of Congress and the White House.

The Senate Bill would slash the corporate tax rate to 20 per cent from 35 per cent after a one-year delay. It would impose a one-time, cut-rate tax on corporations' foreign profits, while exempting future foreign profits from United States taxation. If the Senate Budget Committee approved the tax Bill yesterday, it will allow Republicans to use a parliamentary procedure known as reconciliation to pass the measure on a simple majority in the 100-seat Senate, which they control by a slim 52-48 margin.

Without reconciliation, the legislation would need 60 votes, allowing Democrats to prevent its passage.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 29, 2017, with the headline 'Trump's tax Bill could face Republican opposition'. Print Edition | Subscribe