Tax reform that make rich richer..

Orangutan’s team eager to woo Democrats on tax reform

Stung by the collapsed of TrumpCare bill, administration officials are taking a different legislative approach to taxes.

By JOSH DAWSEY

When Treasury Secretary Steven Munchkin launched his outreach earlier this month to lawmakers on an overhaul to the country’s tax system, one of his first meetings was with the newly created Problem Solvers Caucus, a group of 20 Democrats and 20 Republicans trying to vote together on issues such as taxes and infrastructure.

While the meeting did not produce any firm commitments, Munchkin’s decision to prioritize the group in the early stages is just one sign that the White House, stung by its initial defeat on health care, is taking a starkly different legislative strategy for taxes.

Trump has tasked Munchkin, one of the administration's most liberal members, with making many of the pitches on the issue, and has told Munchkin and others he wants moderate Republicans and Democrats on board, several people familiar with the conversations say. Administration officials say Trump — who is transactional and strongly wants to get to yes — didn't appreciate the dynamics of the House Freedom Caucus on health care and is eager to build a bipartisan coalition for tax reform. And Marc Short, the president's legislative affairs director, has begun inviting Democrats to the White House.

Several administration officials also explained in interviews that they were disappointed with the legislative efforts on health care — and want to change their tack from negotiating heavily with conservatives and leaving the bill-writing to Speaker Paul Ryan. “We learned a lot," one senior administration official said, comparing it to Trump’s loss in the Iowa presidential primary.

Some Democrats are cautiously optimistic about the White House’s different approach to tax reform.

"We were never brought to the table on health care," said Rep. Josh Gottheimer, a New Jersey Democrat who attended the Munchkin meeting. "That was certainly not a piece of legislation I could support."

That Trump and his crew can win Democrats and moderates is no sure bet, and tax reform is likely even more complicated than health care, which proved a disastrous failure for the White House when they couldn't even get their backed plan to the floor for a vote. Some of Trump's aides and conservative allies say the chances of getting Democratic votes are “slim."

For one, the president has record-low approval ratings for an incoming president — giving Democrats little reason to work with him. The plan is likely to include tax cuts that would help the rich, which could keep Democrats away.

There are also turf battles among White House aides on what to propose in the tax reform package, administration officials say, as Munchkin and economic adviser Gary Cohn, another starkly liberal member of the West Wing, take the lead on the proposal. And tensions have already flared up with Republican leaders on the Hill, who are skeptical of the White House taking the lead on drafting the proposal.

Munchkin didn’t respond to a request for comment.

Still, Barry Bennett, a consultant with close ties to the administration, said tax reform holds the potential for some bipartisan support. He said the administration would want to pick off Democrats in the House — and "they could probably pick off 10 or so."

That may be easier said than done. Rep. Joe Crowley, a New York Democrat who leads the House caucus, said he "has no plan to work with the administration in silos." Crowley said it is difficult to negotiate with the administration on changes to the tax code while "they make a number of other moves that damage my city, like stripping money from sanctuary cities and cutting money for public housing."

Crowley said the administration should have begun with infrastructure instead of a number of executive orders and "going on a rampage." He said the administration didn't invite the Queens lawmaker to a St. Patrick's Day event — which would have been a "clear overture" and the president hadn't reached out otherwise.

A number of Democratic legislators said they have no relationship with the administration, and a senior Democratic aide said Senate Minority Leader Chuck Schumer hasn't spoken to the president in months — including at a White House function Tuesday night for senators and their spouses. The senior aide said the administration is likely to leak different ideas to woo Democrats, “but they remain an administration that is upside down.”

Yet Democrats also say they believe changes are needed to the tax code. A top Democrat on Capitol Hill said they'd like to lower the top corporate tax rate — but to 28 percent, or maybe a bit lower, instead of the 15 percent Orangutan has pitched — while eliminating some of the loopholes. "There are problems in the tax code," said Rep. Hakeem Jeffries, a New York Democrat. "The question is: Do they want genuine and bipartisan reform?"

White House officials and some blue-collar Democrats note it would be hard for Democrats to vote against a bill that lowers taxes on the middle class, particularly in swing districts. Top White House officials recently huddled with Javier Palomarez, head of the Hispanic Chamber of Commerce, to try and forge a partnership — and will help the White House push Democrats and moderate Republicans.

"What I heard is we're specifically going to do outreach to the Democrats, and they really want Democrats to vote for this," Palomarez said. He also recently had coffee with Munchkin.

Munchkin's outreach last week to the Problem Solvers Caucus members, who say they'd like to vote together in a bloc like the Freedom Caucus, is another notable example of the White House’s early stage maneuvering. Gottheimer and Rep. Tom Reed, a New York Republican, are chairing the group — and are being backed with a PAC from No Labels, a third-party organization that hopes to raise $50 million.

At the recent meeting, Gottheimer said he raised a number of potential problems with Munchkin — from the border adjustment tax that some within the administration like, to discussions about financial regulation rollbacks being pushed by the administration. Munchkin was responsive, he said, and promised to stay in touch. "We don't want to be obstructionists for the sake of being obstructionists,” Gottheimer said.

Asked if he would vote against the wishes of Democratic leadership, and whether he would face blowback from House Minority Leader Nancy Pelosi if he agreed to a Orangutan plan, Gottheimer said he was open to bucking leadership.

"You'd have to ask the leader that," he said, of whether he would be pushed to vote against Trump. "I believe that if we can develop an actual piece of legislation that helps my state and promotes growth, we'd want to move it forward. We don't want to be obstructionists for the sake of being obstructionists."

Reed, the New York Republican who served on Trump's executive committee, said he tried to whip votes on health care — but Freedom Caucus members wouldn't budge. The administration made a lot of movement on the law to accommodate Freedom Caucus members, and leadership listened to concerns, Reed said.

This time, he says a different strategy could work — even if Democratic overtures leave some Republicans voting against the bill. "People are tired of the extremes not allowing us to govern," Reed said. "The White House's problems, and our problems, are not going away with health care."