The tax overhaul the Senate approved on Saturday rests on a shaky stack of promises Republicans will be hard-pressed to keep.
Foremost are the two central assurances GOP senators made to justify passage of the bill, which may be irreconcilable with each other. First, Republicans have insisted that the measure’s $1.4 trillion cost would disappear under a bustle of economic activity—more jobs, higher wages, and buckets full of new tax revenue flowing into the government.
“The plan will pay for itself with growth,” Treasury Secretary Steven Mnuchin declared this spring, a claim that he and other administration officials and Republicans repeated throughout the summer and fall. They made this assertion despite all available evidence to the contrary—the past experiences of the federal tax cuts enacted under George W. Bush and the more recent failure of tax cuts in Kansas; independent analyses by the Tax Foundation, the Tax Policy Center, and other outside arbiters; and, most flagrantly, by Congress’s own in-house analysts at the Joint Committee on Taxation, who found that the Senate bill would provide a tepid boost to economic growth and would recoup barely one-third of its cost over 10 years.
Republicans are also promising that millions of families will never see the future tax increases that they wrote into the bill to make it work under the Senate’s budget rules. The expiration in six years of most of the benefits for individuals is a fuse that will never be lit, the GOP insists, under the presumption that lawmakers would never abide a tax increase that large. Yet if that fiscal bomb never goes off, the bill’s true cost would soar even higher still, making the party’s first promise, that the bill would pay for itself, even more unattainable.
In addition to the major pledges they made to the public, GOP leaders made more discreet, shorter-term promises to round up the final votes for the bill, on issues far afield from tax policy. Those will be equally tough to keep, and a failure to follow through could jeopardize the tax legislation’s final enactment after negotiations in a conference committee of the Senate and House.
To win over Senator Susan Collins of Maine, top Republicans committed to passing a pair of bipartisan health-care bills aimed at bolstering the Affordable Care Act’s faltering individual-insurance market. Collins demanded those bills to mitigate the impact of repealing the law’s individual mandate, which she supported as part of the tax plan despite voting against several earlier GOP proposals to do so. One bill would restore the payments to insurers that President Trump canceled earlier this fall, while another written by Collins and Democratic Senator Bill Nelson of Florida would fund reinsurance programs to offset the cost of covering the most expensive patients.
Collins had said she wants to see those measures signed into law before enactment of the tax bill, which would give her leverage in a final vote on the conference report. But that presumes passage by the House, where conservatives are warning their leadership against any legislation that would prop up Obamacare. In a statement announcing her support for the tax bill, Collins said only that Majority Leader Mitch McConnell had promised his support for passing those bills by the end of the year—leaving open the possibility that her vote for the tax overhaul requires a leap of faith on health care. If the health bills stall, would she reverse her vote on tax cuts?
Similarly, Senator Jeff Flake of Arizona said he secured a commitment from both the Senate leadership and the Trump administration on immigration in exchange for his vote. They agreed, he said in a statement, “to work with me on a growth-oriented legislative solution to enact fair and permanent protections for DACA recipients.” In fairness to Flake, he’s not quite saying Republicans promised to pass such a bill—only to help him try. But it’s still a curious commitment on which to base his vote considering that Trump has been escalating his rhetoric against illegal immigrants of late and accusing Democrats allied with Flake on the issue of wanting undocumented immigrants “flooding into the country.” Moreover, with Democrats and even some Republicans insisting that a DACA fix be attached to a year-end spending bill, the president is reportedly girding for a government shutdown to rally his base.
Perhaps Collins and Flake realize that the assurances they won were etched in something less than permanent ink, just as Republicans more broadly understand that their claims about the tax bill’s potential for economic growth are optimistic guesses at best. Both senators cited other, more concrete provisions that helped sway their vote, and both all along indicated their desire to support a key pillar of the GOP agenda. But in their haste to pass their tax bill through the Senate, Republican leaders have put themselves on the hook with lawmakers and voters alike, and for commitments that could haunt them in the weeks and years to come.