03/29/2018

GOP Weighs Second Round of Tax Cuts

Many Republicans have championed a second tax bill this year

GOP leaders are spending the recess mulling over whether another round of tax cuts makes sense this year – even if the likelihood of passing such a bill through the Senate is slim.

While the omnibus spending bill passed by Congress last week was widely thought to have been the last “must-pass” legislation for the year, many Republicans have championed a second tax bill as a no-lose proposition for their party. If Republican lawmakers were able to pass a bill to make last year’s temporary tax cuts for individuals permanent, for example, it would position the GOP as defenders of Americans’ paychecks just before the midterm elections this fall. And if Democrats blocked such a bill in the Senate, they would have to explain why they didn’t stick up for the middle class.

“Can you imagine Democrats voting that down?,” Senate Majority Whip John Cornyn (R-TX) asked a POLITICO reporter. “I just think they’d be in an impossible position. They’d have to support it.”

Absent the powerful tool of reconciliation, Senate Majority Leader Mitch McConnell (R-KY) would need at least nine Democrats to vote yes to clear the Senate’s 60-vote threshold. Putting Democrats’ feet to the fire in what’s projected to be a potentially difficult election for Republicans could help buoy their chances to hold onto their majorities in both chambers.

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

McConnell has not said whether he would bring up a second tax bill this year, but the House’s top tax writer likes the idea. Earlier this week, House Ways and Means Committee Chairman Kevin Brady (R-TX) said on Bloomberg TV that a second tax bill could make individual tax cuts permanent and extend full expensing for businesses. The tax law passed last year permits businesses to fully expense new and used capital investments for five years.

“We think that’s one of the most pro-growth parts of this tax code,” Brady said.

This article was provided to OSAE by the Power of A and ASAE's Inroads.