GOP deficit hawks get fried for dinner...

GOP deficit hawks fear tax plan is secret budget-buster

Key Senate Republicans worry tax cuts slated to expire will eventually be extended — boosting the true cost of the bill.

By SEUNG MIN KIM

The GOP has yet to resolve an internal clash over whether expiring tax cuts will really expire, potentially threatening the party’s push for a desperately-needed legislative achievement.

On one side are the White House and top congressional Republicans, who argue that ultimately all the tax cuts in their plan will be extended, even the ones slated to lapse. But that’s exactly what the party’s small, but mighty, bloc of deficit hawks is afraid of.

And as the Senate steams toward a vote next week on its massive tax overhaul, the fight over the bill’s true sticker price may be the deciding factor for the bill.

It was bad enough, in the deficit hawks’ view, that key provisions in the House bill expire in five years and that lawmakers already assume they’ll get extended. But their concerns multiplied after the revised Senate GOP tax plan proposed winding down a host of popular tax cuts for individuals after 2025. The tax cuts were made temporary to trim the official cost of the bill, but deficit hawks fear Congress will simply extend them — further adding to the government’s red ink.

“The savings, the score, it just isn’t valid because you know that they’re not going to follow through,” Sen. Jeff Flake (R-Ariz.), an avowed fiscal conservative, said in a recent interview. “You can’t assume that we’ll grow a backbone later. If we can’t do it now, then it’s tough to do it later.”

The collision between what most Republicans see as simple political reality — keeping popular tax cuts for voters — and deep deficit worries from influential GOP senators could derail the tax reform efforts, particularly if and when the chambers try to meld their tax proposals in the coming weeks.

The deficit hawks decry what they see as gimmicks in the plan, particularly writing in an expiration date for tax breaks with no intention of letting them die. While the official price tag for the Senate tax plan may be $1.4 trillion, extending all the expiring provisions would bump up that cost by another half a trillion dollars, according to the fiscal watchdog group Committee for a Responsible Federal Budget.

Republicans leading the tax charge have said that the tax cuts expire merely to fit within the parameters set up by complicated Senate rules. And they brush off attacks from Democrats who note that the cuts are permanent for corporations but temporary for regular people. Republicans say Democrats should help them make those cuts permanent, which would require 60 votes on the floor — something Democrats are unlikely to do.

Speaker Paul Ryan (R-Wis.) has publicly blamed the Senate rules as the reason some provisions in the House bill, like a family tax credit, expire after five years. He recently told reporters he thinks future Congresses will extend them.

That’s the White House line, too.

“Of course, the hope for everybody is that when the time comes for these things to expire, that they get extended,” Kevin Hassett, chairman of the White House Council of Economic Advisers, said last week.

Flake and Tennessee Sen. Bob Corker, another independent-minded Republican not running for reelection next year, have been among the most outspoken with their deficit concerns. So too, has Sen. John McCain of Arizona, a major wildcard for GOP leadership in the tax fight.

But other Republicans have gradually become more vocal about their own deficit worries, with Sens. Todd Young of Indiana and James Lankford of Oklahoma among them. GOP leaders can only lose two votes before the tax bill tanks.

“My concern is, if you slow down to actually implement it, that’s one thing,” Lankford said. “But when you assume a sunset on something that you may or may not actually sunset, you may set up other tax fights that you have in the future, or set up additional deficit.”

Other GOP senators have raised different objections to the tax bill; Sen. Ron Johnson of Wisconsin doesn’t like the way the plan treats small businesses and Sen. Susan Collins of Maine takes issue with repealing Obamacare’s individual mandate in the plan, among other concerns.

Democrats have seized on the bill’s contradictions, and Senate Minority Leader Chuck Schumer of New York has been particularly eager to exploit the Republican divide.

“I say to my colleagues, particularly the deficit hawks, you can’t have it both ways,” Schumer said in a recent floor speech. “You cannot say we’re going to protect the middle class after 2025 and we’re going to reduce the deficit. This bill is a deficit budget buster. We all know what will happen.”

Indeed, Congress has a good track record of keeping expiring tax cuts around.

Lawmakers faced a “fiscal cliff” at the end of 2012 composed mainly of the expiring Bush tax cuts. Congress, backed by the Obama administration, ultimately voted to make the vast majority of tax cuts permanent. Capitol Hill also routinely voted to maintain temporary tax “extenders” year after year, before passing legislation in December 2015 that made most of them permanent.

The Senate tax measure includes dozens of provisions that are set to expire yet would likely be politically untenable to actually kill; chief among them are their plans to boost the child tax credit, cut individual tax rates and increase the standard deduction.

Corker has been one of the loudest critics of ballooning the deficit. But he’s been careful not to openly disparage the tax plans moving through Congress, and Senate tax-writers, as well as leadership, are aware of his concerns. The Tennessee Republican said he has been discussing ways to resolve deficit worries with other senators — Flake among them — but declined to elaborate further.

Whether Senate Republicans can ultimately win over the GOP skeptics is unclear.

When asked about the cost of extending expiring provisions, McCain stressed: “I’m always worried about the deficit.”