At press time on November 30, the Senate was preparing to take the final step toward passage of its tax reform bill. The Senate voted to begin debate on the tax bill on November 29. However, late on November 30, GOP leadership was still working on a substantive amendment to the bill. Any amendment must comply with the Senate’s budget reconciliation rules. The Senate is then expected to move forward on an amendment vote-a-rama. This will be followed by a final vote on its bill amending the House’s Tax Cuts and Jobs Bill (HR 1).
At press time, the vote-a-rama on amendments was expected to begin late November 30 or early December 1. The bill’s chances for approval seemed brighter for GOP leadership earlier on November 30. More Republican holdouts appeared likely to vote for the measure. However, a nonpartisan cost estimate of the bill may hinder GOP leadership’s efforts of intraparty unanimity, particularly among GOP “fiscal hawks.”
Previously reluctant to commit to the measure, Sen. John McCain, R-Ariz., released a statement on November 30 saying that he was prepared to vote yes. “After careful thought and consideration, I have decided to support the Senate tax reform bill. I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families,” McCain said.
Gaining McCain’s vote was seen as a win for GOP leadership. They have been engaging in ongoing negotiations with Republican senators to secure the required 50 votes under the Senate’s reconciliation rules. McCain has shown in the past that he is willing to vote against the party’s efforts (he voted against the health care bill). Another GOP wildcard, Sen. Lisa Murkowski, R-Ala., also stated that she was prepared to vote yes on the tax bill, as did Sen. Steve Daines, R-Mont., who had previously opposed the measure.
Among those key yet undecided votes include Sens. Ron Johnson, R-Wis., and Susan Collins, R-Me. At press time, Collins remained uncommitted to the bill but stated leadership and the Senate Finance Committee (SFC) were working to incorporate her proposals. Johnson, who previously expressed opposition toward the measure, has voiced optimism in working with the administration and leadership to improve the bill .
Meanwhile, The Joint Committee on Taxation (JCT) released its much anticipated dynamic score of the Senate’s tax bill on November 30. The dynamic score takes into account the projected impact of economic growth on the legislation’s costs. According to the JCT, even when considering economic growth, the Senate bill would not pay for itself.
The JCT report, Macroeconomic Analysis of the Tax Cuts and Jobs Act (JCX-59-17), estimated that the Senate bill would increase GDP by roughly 0.8 percent on average over a 10-year budget period. “That increase in income would increase revenues relative to the conventional estimate of a loss of $1, 414 billion by $458 billion over that period,” the JCT wrote. The JCT estimates the bill would generate $408 billion in revenue from economic growth. However, it is also projected it to add $1 trillion to the deficit.
SFC ranking member Ron Wyden, D-Ore., commented on the JCT’s dynamic score of the Senate GOP tax bill. “The GOP Tax Plan is not going to pay for itself. The bill has a net cost of $1 trillion over a decade, according to nonpartisan JCT,” Wyden said.
On the House side, Ways and Means Committee ranking member Richard Neal, D-Mass., too, criticized the tax bill. “Today, the JCT provided fresh evidence that even under the most generously optimistic economic conditions, tax cuts do not pay for themselves,” said in a statement in response to the JCT report. “The Republicans’ bill will add at least $1 trillion to the deficit at the expense of the next generation,” he added.
The JCT score is seen as a somewhat positive report for the GOP on Capitol Hill. However, it does not come without potential setbacks. According to an SFC spokesperson, the JCT report is “incomplete” because the JCT analysis does not represent the evolving bill. At press time, it was unclear whether the JCT analysis would hinder support of the bill.
By Jessica Jeane, Wolters Kluwer News Staff
Macroeconomic Analysis of the “Tax Cut and Jobs Act” as Ordered Reported by the Senate Committee on Finance on November 16, 2017, JCX-61-17