After a rough night of seemingly deadlocked negotiations, Senate Republicans return to the Capitol building Friday morning with the momentum to pass their tax bill.
And it appears they got there by abandoning a longstanding Republican concern about the national debt.
Late Thursday night, four senators were threatening to vote against the tax bill. Two, Sens. Steve Daines (MT) and Ron Johnson (WI), were calling for more tax breaks for “pass-through” businesses, companies organized as sole proprietorships, partnerships, LLCs, or S corporations that don’t pay the corporate income tax; and two, Sens. Jeff Flake (AZ) and Bob Corker (TN), had expressed deep concerns about the bill’s impact on the deficit.
But by early Friday morning, Daines said his concerns were addressed. He was told the tax bill would increase the deduction for pass-throughs from 17.4 percent to 23 percent. And he added, that he thought this bill would pass without Corker’s vote. Majority Whip Sen. John Cornyn (R-TX) said they had 50 votes, enough to pass the bill.
For days Corker has been trying to negotiate some kind of deficit fix. The latest iteration of the debate was a proposal to additionally tax corporations, or add back the alternative minimum tax on high-income individuals or corporations.
“That’s going nowhere,” Daines told Bloomberg. “What Bob was suggesting is just causing more problems.”
There’s no question that the Republican tax bill faces a major deficit question. On its face, the proposal, which gives corporations a massive tax cut, will increase the deficit by $1.4 trillion in 10 years — or, when adjusted for economic growth, by $1 trillion, according to the Joint Committee on Taxation.
But unlike Corker and Flake, Republicans are ignoring those numbers in order to pass their tax bill. And it seems they might have enough support to get there.