Round up the usual suspects! This time, however, it’s not one of the usual suspects that threatens to extend the Republicans’ record of legislative futility. Rather than running afoul of John McCain, Rand Paul, or Susan Collins, this time it’s Wisconsin’s Ron Johnson who’s declaring opposition to both the House and Senate version of the GOP’s major legislation.
Johnson has a point, too, and it’s a little surprising it took this much to address it:
Wisconsin’son Wednesday became the first Republican senator to say he , signaling potential problems for GOP leaders. Passage of a similar package seemed certain Thursday in the House, where a handful of dissidents conceded they expected to be steamrolled by a GOP frantic to claim its first major legislative victory of the year. …
Johnson complained the bills were more generous to publicly traded corporations than to so-called pass-through entities. Those are millions of partnerships and specially organized corporations whose owners pay levies using individual, not corporate, tax rates. While details of the House and Senate bills differ, many pass-through owners would owe more than 20 percent in taxes for much of their income.
“These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind,” Johnson said. But he left the door open to changes “so I can support the final version.”
Republicans have made tax reform the centerpiece of their economic package. They need it to deliver near-immediate and explosive results, which is why they’re stacking it in favor of corporations with lots of capital on the sidelines. They want to entice these large, publicly traded firms to put that capital to work in creating jobs in the US, helping Republicans make the case for their re-election in the 2018 midterms.
That leaves the distinct impression, however, that the tax reform benefit is really just aimed at Wall Street rather than Main Street, a perception that hasn’t been helped by the decision to make the individual tax cuts temporary while leaving corporate rate reductions permanent. And why are Republicans not providing breaks for small businesses in this package at least commensurate to those they’re giving big corporations? Both philosophically and in terms of optics, that’s a big-time headscratcher.
Unfortunately for the Senate, the reconciliation process requires them to stick within the deficit targets within the recently passed budget resolution, which is why the Senate added the sunset to the individual cuts. Adding in more tax breaks for pass-through entities would push the bill over that line. They could add in the pass-throughs by moving up the sunset date on the individual tax cuts, currently set for 2025, but Senate Republicans are going to take a political beating for making the individual cuts temporary as it is. Either they’d have to back down a bit on the corporate rate cuts to make it work, or they’d have to eliminate more deductions to increase revenue, and both of those have proven to be non-starters.
They might be able to find enough money for some breaks on pass-through entities by tacking on a repeal of the ObamaCare individual mandate, which will save $338 billion over the next ten years in deficit spending. Orrin Hatch added that provision to the Senate bill, but that might end up creating trouble with the usual usual suspects:
Earlier in the day, Sen. Susan Collins (R-Maine) said Republicans had erred when they changed their tax bill this week to include a repeal of the Affordable Care Act’s individual mandate, which requires every American to have health insurance or pay a fine.
“This bill is a mixture of some very good provisions and some provisions I consider to be big mistakes,” said Collins, one of three Republicans who joined with Democrats this summer to vote down a Senate effort to scrap much of the health-care law.
Without Johnson and Collins, Republicans would need every other member of their caucus to vote for the plan — far from a guaranteed outcome. And neither senator’s concern can be easily addressed without changes that could drive other Republicans to oppose the bill.
Does anyone really think that John “regular order” McCain will vote for any version of this bill, especially if it includes a repeal of the ObamaCare mandate? Come on, man. Mitch McConnell needs Johnson and either Collins or Murkowski on board, along with a final vote before Luther Strange gets replaced by Doug Jones after December 12th. The chances of getting to 50-plus-Mike Pence are rapidly dwindling with every attempt to tweak tax reform to woo the stragglers — just as I predicted three weeks ago.
Here’s the question everyone should be asking themselves: Why is it just now that Republican leadership is finding out that Johnson’s not on board? The answer isn’t that Johnson’s too shy to share his thoughts. It’s that this is yet another slapdash effort to score a W without any preparation, and it’s going to end up with the same result we got with their previous slapdash effort to score a W. If the definition of insanity is doing the same thing over and over and expecting different results, then the Republican leadership on Capitol Hill qualifies for custom made straitjackets.