Connect with us

Congress

White House ramps up sales pitch for Trump tax plan

Published

on

The White House is stepping up its efforts to sell the GOP megabill ahead of an impending Senate vote.

The legislation is far from finalized, but the Council of Economic Advisers is sending its first analysis of the Senate bill to Congress Wednesday. The report obtained by POLITICO is based on the Senate Finance Committee draft released last week.

The analysis contrasts the economic and fiscal impact of the party’s signature domestic policy legislation with letting President Donald Trump’s 2017 tax cuts expire at the end of the year — a cliff Senate GOP leaders and the White House are leaning into as they try to sway their holdouts.

“The [One Big Beautiful Bill Act] will establish a strong foundation for economic prosperity by increasing investment, raising GDP, and boosting resources for American families in the form of higher wages and a lower tax burden,” the CEA wrote in its analysis.

The Senate tax plan would create more than $100 billion in investment and more than 1 million new jobs over the 10-year budget window, according to the report. It’s also estimating the economic growth sparked by the tax plan would create between $2.1 to $2.3 trillion in deficit reduction, as well as help decrease the overall debt.

The analysis is significantly rosier than projections from most other economists, who doubt that the Republican plan will do much for growth because the tax breaks for businesses — which have the most potential economic oomph — are relatively small, especially compared to the 2017 bill. Their tax package this time around is much more focused on cutting taxes for individuals while piling on debt that most economists believe will push up interest rates and create a drag on growth.

The nonpartisan Congressional Budget Office hasn’t yet released a full estimate for the Senate legislation, but it recently analyzed the economic effects of the House-passed bill and concluded that any government revenues sparked by growth due to the bill would be swamped by higher debt-service costs prompted by higher interest rates.

In a boon for Majority Leader John Thune, Finance Chair Mike Crapo and other Finance Committee Republicans, the White House analysis found that making some of the business tax cuts permanent would boost investment and increase wages. Permanency is a top priority for Thune, Crapo and others, who have made the case to both the House and the White House that it is worth including even though it comes with a higher price tag.

Senate Republicans are likely to use the analysis to tout their legislation — and to rebut CBO when it releases its own findings. The CEA gave a similarly positive overview of the House’s bill earlier this year, which Speaker Mike Johnson has frequently used to argue that the bill won’t add to the national debt. That has not prevented House fiscal hawks from finding fault in it, even as they voted for it; Thune & Co. are facing similar doubts from their own conservative bloc.

Brian Faler contributed to this report. 

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Congress

Megabill threatens to languish as challenges pile up

Published

on

Republicans aren’t panicking about their fraying domestic policy bill. But they aren’t exactly sure about how it’s all going to come together, either.

Senate Republicans emerged from a closed-door lunch meeting Thursday putting on a brave face about the megabill’s progress. Yet this time last week, members were expecting revised text of the sprawling bill Monday with votes starting a couple of days later. In other words, they thought they’d be close to done by now.

Instead, Majority Leader John Thune refrained from giving his members a specific timeline during a closed-door lunch Thursday, according to three attendees granted anonymity to describe the private meeting. Senators are preparing to stay in town and vote through the weekend, but internal policy disputes and procedural roadblocks thrown up by the chamber’s parliamentarian are keeping firmer plans in flux.

A July 4 deadline being pushed by the White House hangs over Capitol Hill as the only real forcing mechanism, and some Republicans said they were glad to have it even if many others harbor doubts about whether that target can be met.

“I don’t think it gets easier to pass going longer,” said Sen. Kevin Cramer of North Dakota. “The more time we take, the more people find things they want to change.”

The latest blow for the GOP came after Senate Parliamentarian Elizabeth MacDonough warned that key Medicaid language would not comply with the strict rules that govern what can be included in a bill Republicans intend to pass along party lines using special budget rules. GOP senators expressed confidence they would be able to address MacDonough’s concerns, which some described as “technical,” and salvage the proposal.

But that, Thune acknowledged, will take time and threaten his plan of holding an initial vote Friday: “The parliamentarian’s decisions may push that back.”

Noticeably absent from the debate early Thursday was President Donald Trump, who has the bulk of his legislative agenda tied up in the bill. He returned late Wednesday from a trip to Europe and is scheduled to hold a White House event on the megabill Thursday afternoon.

His lobbying is widely seen as a necessary ingredient in getting the bill done. And for all the anxiety about the parliamentarian decisions Thursday, the more profound issue for Republicans are their internal divides about the policy provisions in the bill — particularly those dealing with Medicaid.

MacDonough’s rejection of initial language curtailing state provider taxes, which most states use to leverage federal health care dollars, emboldened the so-called “Medicaid moderates,” who believe the proposal is not ready for prime time. Nor have they been convinced by leadership’s offer of a $15 billion rural hospital fund, though negotiations are expected to force that number higher.

Sen. Josh Hawley (R-Mo.), who spoke with Trump Wednesday about the Medicaid language, said the ruling gave Republicans “a chance to get it right” and expected Trump would be more involved now that he’s “back on terra firma.”

“I think he wants this done. But he wants it done well. He doesn’t want this to be a Medicaid cut bill — he made that very clear to me,” Hawley said. “He said this is a tax cut bill, it’s not a Medicaid cut bill. I think he’s tired of hearing about all these Medicaid cuts.”

Senate Finance Chair Mike Crapo (R-Idaho) walked Republicans through MacDonough’s rulings during the closed-door lunch. Most left saying it would be relatively straightforward to tweak the proposal and keep it in the bill. Senate GOP leaders are counting on the questioned provisions to generate some $250 billion in savings to offset tax cuts and other costly items.

“I’m feeling much better after lunch,” Sen. Ron Johnson (R-Wis.) said walking out. “The parliamentarian did kind of a little bit of a hand grenade, but I’ve been encouraged by what we heard.”

The tight-lipped Crapo would not discuss details of MacDonough’s rulings Thursday. But Sen. John Hoeven of North Dakota said that, based on Crapo’s briefing, the issue had to do with a provision that would freeze provider taxes in states that have not expanded their Medicaid programs under the Affordable Care Act.

“It was a technical issue with a technical solution,” he said.

Other pitfalls remain to be seen. Republicans are still waiting for MacDonough to issue rulings on their tax plan, while other committees are waiting on final decisions on a crucial food-aid plan and other provisions they had to rework after she rejected their initial efforts.

And while senators have been focused on resolving their own disputes, they also have to be mindful of the narrowly divided House — where pockets of Republicans have continued to raise angry objections to changes their Senate counterparts have been making to the bill that passed the House last month.

No group has been more vocal than the blue-state Republicans pushing for an expansion of the state-and-local-tax deduction. They received an offer brokered by the administration Thursday that would keep the House-passed $40,000 deduction cap but lower the income threshold and change how the deduction is indexed to inflation, according to three people granted anonymity to describe the talks.

Rep. Nick LaLota (R-N.Y.) was one of several key players who poured cold water on the offer, saying that he “declined the offer to participate … in further faux-negotiations until the Senate gets real.” Sen. Markwayne Mullin (R-Okla.), a key go-between, insisted “we’re going to find a landing spot.”

For House conservatives, meanwhile, the outrage of the day was MacDonough’s new decisions axing the health care provisions — including some aimed at excluding undocumented immigrants from federal benefits. Several publicly called on senators to overrule the parliamentarian, or fire her outright — a power Thune holds.

Most Republican senators rejected that demand Thursday, warning that it would derail the reconciliation process.

“People should remember that what comes around goes around when it comes to the parliamentarian,” said Sen. Susan Collins (R-Maine), a key undecided vote. “She may rule the way you like one day, the way you don’t the next.”

Thune also rejected calls to sidestep MacDonough, though the headache could become substantially worse if Trump weighs in. So far the White House is staying out of the Senate’s procedural machinations and even Trump’s allies are signaling that he should keep quiet when it comes to MacDonough.

“I hope he doesn’t,” Cramer said.

Benjamin Guggenheim and Meredith Lee Hill contributed to this report. 

Continue Reading

Congress

Thune says Senate won’t overrule parliamentarian

Published

on

Senate Majority Leader John Thune said Thursday the Senate would not move to overrule its parliamentarian after she advised that including key provisions in the GOP’s domestic-policy megabill would expose it to a fatal Democratic filibuster.

After the decisions were publicized Thursday, multiple conservative Republicans called on the Senate to sideline MacDonough. But when asked by Blue Light News about overruling her, Thune said, “No, that would not be a good option for getting a bill done.”

The rulings from Parliamentarian Elizabeth MacDonough affected several major pieces of the GOP plan, including a provision that would crack down on provider taxes that states used to fund their Medicaid programs as well as measures meant to exclude undocumented residents from public benefits. Republicans are expected to try to rewrite the provisions in hopes of winning MacDonough’s blessing.

“How is it that an unelected swamp bureaucrat, who was appointed by Harry Reid over a decade ago, gets to decide what can and cannot go in President Trump’s One Big Beautiful Bill?” wrote Rep. Greg Steube (R-Fla.) on X.

“The WOKE Senate Parliamentarian, who was appointed by Harry Reid and advised Al Gore, just STRUCK DOWN a provision BANNING illegals from stealing Medicaid from American citizens,” added Sen. Tommy Tuberville (R-Ala.), also on X. “This is a perfect example of why Americans hate THE SWAMP.”

The parliamentarian rulings are crucial because Senate Republicans are seeking to use special budget reconciliation rules to avoid a Democratic filibuster and pass the bill on party lines; those rules limit such bills to strictly fiscal-related matters.

While the parliamentarian serves only as an adviser to the Senate’s presiding officer and can be overruled — or fired — members generally heed her guidance out of a bipartisan desire to preserve the filibuster for most legislation and to otherwise observe the Senate’s norms. Recently, Thune took pains to arrange a Senate vote overruling an EPA decision on California emissions standards in such a way that MacDonough would not be directly overruled.

MacDonough, who has spent more than 25 years as a Senate staffer and served as parliamentarian since 2012, has been the subject of controversy virtually any time senators have sought to use the party-line reconciliation process. Multiple Democratic lawmakers, for instance, called on the Senate to overrule her in 2021 after she advised that a minimum wage increase could not be included in their then-pending domestic policy bill.

Continue Reading

Congress

Senate GOP dealt major blow on megabill health care plans

Published

on

Senate Republicans are facing major new issues with their domestic policy megabill after the chamber’s parliamentarian advised senators that several provisions they are counting on to reap hundreds of billions of dollars in budget savings won’t be able to pass along party lines.

Those include of major pieces of Medicaid policy, including politically explosive plan to hold down Medicaid costs by cracking down on state provider tax — a provision that is expected to have a nine-figure impact on the bill. Republicans now will have to try to rewrite major sections of their Finance bill or potentially leave out key policies.

The decisions were detailed in a Thursday morning memo from Democrats on the Senate Budget Committee. Other provisions now at risk include several GOP proposals to exclude undocumented residents from Medicaid, including by withholding federal funds from states that make them eligible for benefits.

The rulings come at a precipitous time for Senate Majority Leader John Thune and other GOP leaders, who are already facing a revolt inside their conference from members wary of the practical and political impact of the Medicaid changes. They have proposed reverting to a less drastic House plan, which would merely freeze the existing provider taxes, though it’s unclear if that provision could also pass muster under Senate rules.

Continue Reading

Trending