Have nothing to offer but debt....

Tax cuts, Round 2: GOP looks to punish Democrats in 2018

‘It’s the tax pony, and that’s the only horse they have to ride,’ says one top Democrat.

By BURGESS EVERETT and RACHAEL BADE

Republicans are dreaming of passing another round of tax cuts this year — or at least making vulnerable Democrats squirm by voting against them.

GOP leaders are weighing a series of votes to make last year’s temporary tax cuts for individuals permanent, according to Republicans in both chambers. The strategy would portray the party as the guardian of Americans’ paychecks, Republicans say, and buoy the GOP during a brutal election year.

Republicans argue they win regardless of whether it culminates with a Rose Garden ceremony: Either Democrats support the legislation, giving the GOP a major legislative accomplishment in its scramble to save its majorities. Or, more likely, Democrats block the bill — allowing Republicans to paint them as opponents of the middle class.

“Can you imagine Democrats voting that down? I mean, how do you explain that one?” said Senate Majority Whip John Cornyn (R-Texas). “I just think they’d be in an impossible position. They’d have to support it.”

Much, if not all, of the maneuvering over tax cuts is pure politics. If Republicans were serious about passing a second batch of tax cuts, they’d use the powerful tool that allows for passage by a simple majority, as they did last December.

But GOP leaders don’t even plan to try. Senate Majority Leader Mitch McConnell (R-Ky.) doesn’t believe his threadbare majority can agree on a budget, a requirement for deploying reconciliation procedures. That means Republicans would need at least nine Democrats to clear the chamber’s 60-vote threshold.

Democrats say Republicans are showing their desperation in the face of a brutal midterm environment. A backlash against President Donald Trump has the makings of a blue wave, though Republicans have a favorable Senate map — 10 Democratic-held seats are up in states that Trump won.

“It’s all they’ve got. It’s a one-trick pony,” said Senate Minority Whip Dick Durbin (D-Ill.). “It’s the tax pony, and that’s the only horse they have to ride.”

The gambit could put at least some swing-state and swing-district Democrats in an awkward spot. One of the main reasons Democrats opposed the GOP’s December tax package was that it included only temporary breaks for regular people while giving huge, permanent reductions to corporations.

Republicans plan to say the Democrats were right all along, and accuse them of hypocrisy if they balk.

“We hear the complaints of Democratic members saying, ‘Individuals deserve permanency so they don’t look at tax hikes down the road,’ and I think there is broad support in the Republican Party to say, ‘Yes, I agree with you!’” said Ways and Means Republican Tom Reed of New York.

But GOP leaders are unlikely to win over many Democrats. Top House Ways and Means Committee Democrat Richard Neal of Massachusetts said there’s no way he’d support such a bill because “their tax cuts overwhelmingly favor people at the top.”

Still, tax reform, Republicans say, will be a central pillar in their battle to maintain their majorities. Republicans have been heartened by recent polls that show their December tax package has increased in popularity, though other studies show the benefits have still yet to significantly reach middle-income earners.

"The proof is in the paycheck," insisted Sen. Thom Tillis (R-N.C.), vice chairman of the National Republican Senatorial Committee. "That’s a message we can run on."

Trump, for his part, has made no secret that he wants Congress to begin “phase two” of tax reform this year. During a major fundraiser for the National Republican Congressional Committee last Tuesday, the president singled out Ways and Means Chairman Kevin Brady’s work putting together such a proposal behind the scenes.

“Where's Kevin? Stand up, Kevin, please!” Trump yelled to a room full of donors. “He doesn't stop. And let's not tell anybody — although, you have a lot of cameras back there, actually — let's not tell anybody, Kevin, about ‘phase two’ that we've already started on, right? “

Trump, according to White House legislative affairs director Marc Short, “has a desire to see the individual rates permanent.” Under the new tax law, reductions for corporations are permanent but will expire for individuals in 2027.

Still, some Republicans are already warning that might be impossible.

“It’d be nice to do it, but I don’t think we have the votes,” said Senate Finance Chairman Orrin Hatch (R-Utah), one of the original authors of the December tax bill.

Other Republicans say they shouldn’t even try. Tennessee Sen. Bob Corker — a fiscal hawk who contemplated voting against the last tax bill because of the high price tag — said “hell no” when asked if he would support such a plan.

“It would be all dessert and no dinner,” said Rep. Mark Sanford (R-S.C.), another fiscal conservative. “It would codify the fact that Republicans have given up fiscal austerity.”

Any proposal for more tax cuts would first have to pass the House. It’s unclear when Speaker Paul Ryan’s (R-Wis.) team would put the bill on the floor, but Brady said it’s just a matter of time.

“We’re going to give [Democrats] an opportunity to make [the tax cuts] permanent,” Brady told POLITICO. “And that will really reveal: Was it just an excuse to not give people back more of what they earned?"

While such a bill would likely easily pass the House, it would then be subject to the Senate’s filibuster. In interviews, incumbent Senate Democrats were largely noncommittal on how they would handle a vote on making tax cuts for individuals permanent.

Sen. Claire McCaskill (D-Mo.) said the party might request a vote on lowering prescription drug prices or lower health care premiums on companies that have benefited from corporate tax cuts.

“All of us support middle class tax cuts. That’s not the issue,” she said.

And other Democrats see an opportunity to critique the GOP as fiscally irresponsible.

“We’ll see how many trillion that adds to the national debt,” said Sen. Jon Tester (D-Mont.), who is likely to face a tough reelection challenge this year.

And because the Senate is so narrowly divided, several red-state Democrats could support the proposal and still leave it short of the chamber’s 60-vote threshold.

Senior Republicans are well aware of that reality.

“You could tempt the Democrats on the floor to oppose that. They all said they were for [those tax cuts] when it was going through,” said Sen. John Thune of South Dakota, the No. 3 GOP leader. “The one thing they could do is the Democrats could let all of their [2018 candidates] off … and give us 58 or 59 and not pass it.”

With that in mind, McConnell has made no final decision on whether to bring up a tax cut vote later this year, senators said. But he is open to it if the political calculus makes sense.