President Donald Trump’s courtship of Democrats on tax reform is dividing congressional Republicans on the merits of a bipartisan bill — and could upend the party-line strategy that White House and GOP leaders have been pursuing for months.
Trump talked tax reform with two bipartisan groups of senators and House members over the past 24 hours, dining with swing-state Democrats and hobnobbing with centrists in the lower chamber. He told them he wants their votes on a tax bill, even entertaining a Democratic request to raise taxes on wealthier individuals.
“If they have to go higher, they’ll go higher, frankly,” Trump told reporters Wednesday just before his meeting with the House Problem Solvers Caucus, a cluster of moderate Republicans and Democrats pushing him for a bipartisan tax bill.
Raising taxes on the rich is the polar opposite of supply-side economics espoused by Republicans. Indeed, while GOP leaders welcome Democratic votes on tax reform, they’re loath to compromise on key provisions their plan.
Tax decision-makers in the “Big Six” — Speaker Paul Ryan, Majority leader Mitch McConnell, Treasury Secretary Steve Mnuchin, White House economic adviser Gary Cohn and the GOP chairmen of the House and Senate tax-writing committees — opted months ago to pursue a partisan tax bill, all but writing off Democrats. They aim to pursue tax reform via budget “reconciliation,” a procedural tool that allows them to evade a 60-vote threshold in the Senate, where the GOP controls just 52 seats.
Now, GOP leaders and conservative lawmakers are warning that a Trump alliance with Democrats could upend all those plans.
“It’d be a mistake to assume that if we’re going to lose some Republicans that we can make up for it with a few Democrats,” said Sen. John Thune of South Dakota, the third-ranking Republican.
But that opinion is at odds with the emerging White House sentiment that Democrats could provide the votes to get a tax bill over the finish line — and perhaps even reach 60 votes in the Senate.
Skepticism in the House is just as pronounced. It’s one thing for Trump to cut a three-month spending deal with Democrats; overhauling the tax system with the help of the opposition party is another matter entirely.
“Trump is talking about doing bipartisan stuff with Chuck and Nancy on taxes, and I don’t want to open the door to that until we see what this [GOP] tax plan looks like,” said Rep. Dave Brat (R-Va.) “If we can reach across the aisle and get them on board, heck yes. But my guess is: They’re not going to be too thrilled about jacking up the supply side.”
Trump’s suggested Wednesday that the wealthy “will not be gaining at all with this plan,” predicting that their tax rates will remain “pretty much where they are” or even increase. But Republicans of all stripes — especially in the Big Six — believe taxes should be reduced across the board.
“We need rates to come down for every American,” said Rep. Andy Barr (R-Ky.). “When you have a taxpayer that’s a [small business] that might have a $1 million income, that’s not $1 million to an individual person. That’s a job-creating small business!”
Not every Republican denounced Trump’s comments. After meeting with the president Wednesday afternoon, Problem Solvers Caucus leader Tom Reed (R-N.Y.) praised Trump for “not worrying about the extremes on either side of the party.”
“What you saw today was a president who’s leading for the American people, and that’s what it’s about: getting the deal done,” he said on Fox News.
Some Senate Republicans are also excited by the possibility of a bipartisan deal — even if it would likely move the bill far to the left from of where Republicans would go on their own.
“Why don’t you start with a bipartisan discussion, see if you can find areas of agreement? Which is the point I made to President Trump … that was my advice,” said Sen. Ron Johnson (R-Wis.), who attended the bipartisan dinner at the White House on Tuesday.
After Republicans failed to repeal Obamacare on their own, top White House officials began worrying that the chamber wouldn’t be able to pass a tax bill on a party-line basis, either. While they’re fine with the Big Six continuing to pursue a GOP tax bill, administration officials believe they’ll need a handful of Senate Democrats to pass legislation and will need to strike a deal at some point.
Hence the invitation to swing-state Democratic Sens. Heidi Heitkamp of North Dakota, Joe Donnelly of Indiana and Joe Manchin of West Virginia to dine with Trump on Tuesday.
Speaking to reporters at Christian Science Monitor breakfast Tuesday, White House Director of Legislative Affairs Marc Short acknowledged as much, saying Trump wanted a bipartisan tax plan after finding that Republicans were “not reliable” on Obamacare repeal.
“We don’t feel like we can assume that we can get tax reform done strictly on a partisan basis,” he said. “So it is wise for us, not just from a policy perspective but from vote-counting perspective, to try to reach out and earn the support of Democrats as well.”
Senate GOP leaders, however, warn that relying on Democrats is short-sighted. Don’t expect Heitkamp, Manchin or Donnelly to come through, they say, if Republicans are three votes short.
Democrats are “never there if you need ‘em,” said Sen. Roger Wicker (R-Miss.).
While GOP leaders haven’t discouraged Trump publicly from wooing moderate Democrats, they believe those Democrats are just flirting politically with the president. Many of them are up for reelection in states that Trump won, so it’s in their interest to at least appear open to a deal.
In the end, though, “their fear of political retribution from leadership and their base I think will make it hard for them” to side with Republicans, said Senate Majority Whip John Cornyn (R-Texas). “I hope I’m wrong, but I’m not optimistic.”
Still, after the Obamacare debacle, some Senate Republicans agree with the White House that Senate Republicans could come up short if they go the GOP-only route. A number of rank-and-file members told POLITICO Tuesday that it’s very possible they’ll need a handful of Democrats even to get 50 votes.
“We’re going to need some Democratic votes to get this passed, most likely,” said Sen. Steve Daines (R-Mont.). Added Sen. Pat Roberts (R-Kans): “I don’t know of any tax reform bill that could eventually pass — given the circumstances we faced in our party — without Democratic votes.”
There’s also a concern in both chambers of Congress that while reaching out to Democrats they’re unlikely to win, the White House will let GOP orthodoxy go.
Upon hearing White House talk of needed Democrats for a tax bill, for instance, Brat went on a Facebook rant and started buttonholing reporters in the hallway to complain that “Democrats don’t like employers” so would be no help on taxes. Freedom Caucus board member Scott Perry, likewise, said he “appreciates” that reaching out to Democrats is just part of the legislative process but hopes the White House realizes Democrats are not their friends on tax issues.
“I just don’t think Democrats are for real tax reform,” the Pennsylvania Republican said. “They never have been. And at the end of the day, we have to come to that realization.”
It’s the cost of that support that has Republicans worried.
Trump budget director Mick Mulvaney, a former member of the House Freedom Caucus, told Fox Business Network on Wednesday that it’s “fair” to assume Democratic buy-in would result in a watered-down tax plan.
“I think the president recognizes that,” he added.