Tax victory may be fleeting

Tax victory may be fleeting for Ryan and McConnell

Republicans fear they're about to get railroaded on a host of issues in the days and weeks to come.

By RACHAEL BADE and SEUNG MIN KIM

A beaming Speaker Paul Ryan high-fived and hugged his lieutenants after the House first passed the GOP tax bill Tuesday. As the Senate prepared to follow suit hours later, Majority Leader Mitch McConnell was elated.

“Couldn’t be better,” he said in an interview with POLITICO.

Capitol Hill Republicans have every reason to feel euphoric. Ryan and McConnell have ushered the biggest tax overhaul in a generation through Congress and delivered President Donald Trump his first major legislative victory since Inauguration Day.

But on the periphery is palpable angst, particularly in the House. Just hours before the Tuesday vote, some House Republicans fretted privately about the prospect of getting railroaded into propping up Obamacare by the end of the week. And conservatives have been stewing quietly over a looming legislative package coming in early January that most believe will increase spending and codify an Obama-era immigration program they believe is illegal.

“It’s kinda like leaving a hospital finding out you’re cancer free and getting run over by a Mack truck,” said Republican Study Committee Chairman Mark Walker. On the one hand, the North Carolina Republican cheered passage of the tax plan. But he was also aghast that a unified Republican government was even discussing the possibility of enacting Obamacare subsidy payments they campaigned against for years.

Ryan and McConnell scored an undeniable win this week when Congress passed a sweeping tax overhaul. For the speaker, it was a chance to check his No. 1 policy goal off his bucket list. For the majority leader, it was an opportunity to regroup with a once-in-a-generation success, particularly after the Senate failed to repeal Obamacare this summer.

But the victory lap for both men may be short-lived.

By Friday Republicans will have to figure out how to fund the government, and there are no good options. House Republicans hoped to increase defense spending without giving Democrats any funding boost for their own priorities — an idea GOP leaders retracted after realizing it would go nowhere in the Senate. McConnell, for his part, recently backed the idea of adding Obamacare stabilization payments to the short-term spending bill — something House Republicans have flat-out rejected.

That’s to say nothing of January, when Congress is expected to raise strict spending caps without equivalent cuts and potentially offer deportation relief to Dreamers. Both could repel the conservative base even more.

Republicans throughout Washington have begun calling the January legislative agenda the “shit sandwich.”

“It’s going to take a lot of the win away and a lot of the momentum away if we go back on our principles, and to me that’s why the [Obamacare] payments are toxic,” said Rep. Warren Davidson (R-Ohio), a Freedom Caucus member who enjoys a strong relationship with Ryan and even sat with him on the floor in the moments before the House vote Tuesday. On Wednesday afternoon, Sens. Lamar Alexander (R-Tenn.) and Susan Collins (R-Maine) said they would not push for an Obamacare stabilization measure to hitch a ride on this week’s stopgap spending bill and would instead seek passage early next year.

Ryan may have sensed that other policy matters were about to infringe on the tax triumph: Just three hours before the House first passed the bill Tuesday, the Wisconsin Republican told his colleagues in a closed-door conference meeting to treasure the moment they passed the tax overhaul and remember it as Republicans tackle a series of thorny year-end issues. Be proud, Ryan said — and don’t get bogged down in the drama.

Some heeded his advice; others did not. As Republicans streamed out of the room, several balked at Ryan’s suggestion that McConnell might tack Obamacare subsidies onto the government-funding bill at week’s end. Minutes later, when the gavel fell on tax reform in the House, some conservatives declined to join the party’s standing ovation on the floor, frustrated over leadership’s handling of the year-end to-do list.

Republicans’ mixed emotions will again be on full display Wednesday: Around 3 p.m., GOP lawmakers will head to the White House for a celebration, where most will laugh and pat each other on the backs like one big happy family. But right after, House leaders expect to call a private conference meeting to discuss how to avert a shutdown — a discussion that’s likely to displease conservatives, appropriators and defense hawks alike.

The Senate, a more bipartisan body comprised of more centrist Republicans, is having less heartburn for now. McConnell is determined that his hard-fought legislative victory on taxes — in which he kept together his fractious conference — not be swiftly overshadowed by a shutdown battle that could bruise Republicans.

“I think there’s a bipartisan desire to wrap up our business here in a fairly non-contentious way, and I think you’ll see that develop at the end of the week,” McConnell told POLITICO. “This is not a place we haven’t been before.”

His top deputy, Senate Majority Whip John Cornyn (R-Texas), was also adamant that the looming battles wouldn’t detract from the tax win: “I don’t know anybody that believes we’re going to shut down."

A shutdown just two days before Christmas would tar the victory that GOP leaders on both ends of the Capitol have spent months working toward. Democrats have criticized the messy legislative process and accused the GOP of rushing through the tax bill with little public scrutiny, charges Republicans dismiss.

“I think it’s a real tribute to our majority leader that he’s been able to get this up and hopefully out,” Senate Finance Chairman Orrin Hatch (R-Utah) said.

Winning over Sen. Bob Corker of Tennessee, the lone GOP senator to reject the Senate’s version of the tax bill, was also a feat for McConnell.

At a party lunch on Tuesday, Corker spoke to his fellow Republican senators about how he came around on the tax measure despite initially opposing it out of concerns it would blow through the deficit. He didn’t mention, according to one senator, the controversy that exploded around him in the final days of the tax fight after a report suggested he flipped his vote only after securing provisions in the tax bill that would profit him personally.

McConnell came to Corker’s defense in the interview with POLITICO, calling such suggestions about the Tennessee senator “absolutely outrageous."

The majority leader was unconcerned with the perception that some lawmakers could benefit financially from the tax overhaul. McConnell noted that his own accountant ran through how the Kentucky Republican would fare under the tax bill, and “I come out almost exactly where I am now.”

“Every taxpayer in America has got a different set of facts,” McConnell said. “Not a single member [was] casting a vote on this bill based upon their own personal tax situation.”

In the House, there was never really a question about whether tax reform could pass. Ryan was able to muscle through an Obamacare repeal bill earlier in the year, and his conference was so sick of losing that they were willing to swallow almost any tax bill if it meant a legislative victory.

“It’s a feather in his cap,” said Rep. Bill Posey of Florida of Ryan. “He said this was one of his goals since the day he was on staff. And that says a lot, that it’s been important to him — but also very important to the president and the country.”

Even if GOP leaders iron out their government funding differences in the next three days with little drama, January is sure to be harder. While Republicans could pass tax and health care bills by themselves, negotiations on spending and immigration will require Democratic votes.

And Democrats, most lawmakers and aides on the Hill agree, have the upper-hand in those talks. That means it’s only a matter of time before Republicans cut loose their right flank. But perhaps when that happens, and the intra-party bickering reaches a new crescendo, they’ll look back to the day tax reform passed with fond memories.

“The nice thing about doing a big package that has been in the making and overdue for 31 years is this is going to have lasting impacts,” said Sen. Shelley Moore Capito (R-W.Va.), who hopes Republicans will keep talking about tax reform well beyond the shutdown drama. “I don’t think any of us are going to lose any of our enthusiasm or gonna stop talking about it.”