Crunch time for Trump's tax plan in Senate

Washington (AFP) –


US President Donald Trump's tax reform ran a gauntlet of opposition Friday after a small group of Republican deficit hawks balked at the controversial plan's $1.5 trillion price tag.

Senate leaders had hoped to wrap up Thursday's session with Trump's first major legislative victory after 10 months in office.

Instead, the president found himself tweeting encouragement to Republicans Friday -- and blaming Democrats for trying to sink his proposal because they believe it is "too good."

Senator John Cornyn of Texas, the Republican whip, told reporters he believed the Republicans had locked down the 50 votes needed to pass the legislation.

"We have at least 50, and we?re still working," the Washington Post quoted Cornyn as saying as he left a meeting of Senate leaders.

Republicans "are working hard to pass the biggest Tax Cuts in the history of our Country," Trump said. "The Bill is getting better and better."

The improvements have yet to manifest themselves in the legislation, but Republicans were believed to be working overnight for solutions that would placate the rebels within.

They include senators Bob Corker and Jeff Flake, who have been critical of Trump in recent months.

At least one skeptic has been won over.

"I'm planning to vote yes today on the tax bill," Senator Steve Daines told Fox News. "This is an historic moment for our nation."

The drama began Thursday when the Senate parliamentarian ruled against Corker's plan to use a so-called "trigger" to automatically raise taxes if revenues fall short of projections, saying it did not comply with Senate budget rules.

But with some conservatives bridling at their party's trampling of anti-deficit budget orthodoxy, 11th-hour negotiations proceeded over how to offset the cost of dramatic tax cuts for corporations and more modest cuts for individuals.

The problem was compounded earlier Thursday when a nonpartisan congressional tax scorekeeper projected that the tax overhaul would add a whopping $1 trillion to the deficit, even after accounting for expected economic growth from the plan.

The analysis complicated Trump's argument, shared by many Republicans, that the tax cuts would pay for themselves through additional economic growth -- and left some senators mulling adding future tax hikes into the plan to ensure sufficient revenue.

Republicans hold a narrow 52-48 Senate majority. Three defectors would kill the bill, and a handful were expressing reservations about a measure that experts say would benefit corporations and the wealthy.

- 'Ticking time bomb' -

The bill as it stands would reduce the corporate rate from 35 percent to 20 percent. Trump has repeatedly called for a 20 percent corporate rate.

Lawmakers were seeking new ways to circumvent the unexpected snags, including potentially raising corporate taxes after six years.

Senator Ted Cruz warned, however, that inserting automatic tax hikes would set a "bad precedent," because it could force American families into paying higher taxes during an economic downturn.

Thursday's showdown highlighted the delicate balancing act required to get the tax plan across the finish line.

Other senators have raised narrower concerns: over the tax rates for certain smaller companies; deductions for families with children; or a provision, slipped into the legislation, to end the requirement that all taxpayers carry health insurance or pay a fine -- a central pillar of Obamacare.

If the legislation passes the Senate, it still must be reconciled with the recently passed House version. The plans differ on some points.

Democrats, united in opposition, are arguing that the plan is too expensive and will accommodate only the rich.

Top Senate Democrat Chuck Schumer called the plan a "ticking time bomb of middle class tax hikes."

The final bill had yet to be released early Friday, but Republicans were so eager to rush the bill through that they might vote on it just hours after the final version is introduced.

"Notching a political win... isn't a good enough reason to throw common sense and responsibility out the window," Schumer said.