Dealt a defeat, Republicans set their sights on major tax cuts

The grand plans of lower rates, fewer loopholes and a tax on imports may have to be scaled back to a big corporate tax cut and possibly an individual tax cut.

A lot of people think Mr. Trump might go for this to get an easy win.

“They have to have a victory here,” said Stephen Moore, a Heritage Foundation economist who advised Mr. Trump during the presidential campaign. “But it is going to have to be a bit less ambitious rather than going for the big bang.”

Because of the arcane rules of lawmaking in Congress, there may be little choice. If Republicans intend to act again without the help of Democrats, they will need to use a procedure called budget reconciliation to have the Senate pass tax legislation with a simple majority. To make their changes to the tax code permanent, their plans cannot add to deficits over a period of 10 years.

Eliminating the $1 trillion of Affordable Care Act taxes and the federal spending associated with that law would have made this easier. Because they failed, Republicans will struggle to reach their goal of cutting corporate tax rates without piling on debt. Speaker Paul D. Ryan acknowledged on Friday, “This does make tax reform more difficult.”