Tuesday, September 12th 2017 (WASHINGTON) – On Tuesday evening, six Republican and Democratic senators are scheduled to sit down with President Donald Trump at the White House to discuss the administration’s number one priority, tax reform.
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The bipartisan dinner at the White House follows a rare moment of unity among the two parties when, last week, Democrat and Republican leaders agreed with a White House-brokered deal for $15 billion in hurricane relief plus a package to fund the government and avert a debt default through December.
After pushing a partisan legislative agenda for the first eight months of his presidency, focused largely on repealing Obamacare, Trump appears to be warming up to the idea of reaching across the aisle, especially if it means shoring up a victory on tax reform.
In a speech in North Dakota last week Trump indicated his preference to advance his tax overhaul with buy-in from Democrats.
“I’m asking all Americans, Republican, Democrat, and independent, to join with me, with each other, to demand tax cuts and tax reform that will put America first,” Trump said. He then turned to Sen. Heidi Heitkamp, North Dakota’s lone Democrat, for a handshake and a kind word.
Heitkamp, who faces a tough 2018 re-election bid in a red state, is scheduled to join Trump at the White House to talk taxes. She will be joined fellow red state Democrats Joe Manchin of West Virginia and Joe Donnelly of Indiana. All three have been open to working with Trump and in February broke party ranks and voted to confirm Supreme Court Justice Neil Gorsuch.
Manchin is looking forward to the meeting at the White House and told reporters he has drawn “no red lines” ahead of the discussion, with the exception of one.
“I want to make sure, first of all, whatever we do can’t add more debt. I am just adamantly opposed to adding more debt,” he insisted.
Other than that, Manchin wants to ensure lower and middle-income Americans get a fair return, not just high-earners and he wants a plan that will level the global playing field when it comes to corporate taxes. “I just want to be competitive, that’s all.”
Even as President Trump courts a handful of Democrats, Senate Republicans are not anticipating a kumbaya moment with the opposing party.
“It’s most likely it will get done through reconciliation,” Republican Conference Chairman Sen. John Thune (S.D.) told reporters on Tuesday. “It would be great if it’s done with Democrat votes, but I don’t know how you get eight Democrats to vote for [it].”
That message was passed down through the Republican ranks. Even as the president makes overtures to Democrats and celebrates Ronald Reagan’s bipartisan tax reform in 1986, the Republican leadership is intent on using budget reconciliation as a vehicle to lower the threshold to a simple 51-vote majority to get tax reform passed.
“I’m not for reconciliation over here,” Manchin said, noting that the president’s White House invite to a handful of Democrats appears to give some indication that “the president is approaching it as he needs sixty votes.”
The math for getting Democrats on board with tax reform was further complicated back in August when 45 of the 48 members of the Senate Democratic Caucus signed on to a letter offering to work with the majority party, but only if they met a set of “prerequisites” that are unlikely to get traction.
Among the demands, no deficit-financed tax breaks and no tax cuts for upper-income Americans. “Tax reform cannot be a cover story for delivering tax cuts to the wealthiest,” the senators wrote. “We will not support any tax plan that includes tax cuts for the top 1 percent.”
The three senators who did not sign on to the letter were Heitkamp, Donnelly and Manchin.
Dick Durbin of Illinois, the second highest ranking Democrat in the Senate, said on Tuesday that he is willing to consider any of the proposals that come from the White House meeting tonight, but he and his caucus still stand firmly behind the demands in the August letter.
“That’s our starting point.,” he said. “I hope that the president will acknowledge that.”
Originally the Republicans had hoped to have a deal on tax reform by August so they could push it through a 2017 budget reconciliation bill. But the deadline to pull that off is September 30, too tight for the GOP to finagle.
According to Sen. David Perdue (R-Ga.), the GOP is now looking further down the road and aiming to have a tax reform plan by December, around the same time they have to vote on a new government spending bill.
“As I understand it, we’re going to try and do tax [reform] under the FY2018 reconciliation,” he explained.
The longer than expected wait for tax breaks and lower corporate tax rates is already testing the patience of many in corporate America. The post-election, multi-trillion dollar Wall Street rally and soaring business confidence were largely attributed to Trump’s promise of a massive tax overhaul. Failure to deliver on the promise could jeopardize those high spirits.
Perdue said lawmakers are feeling that pressure. “There is a growing sentiment that we have got to get this done, and we’ve got to get it done before the end of the calendar year.”
On Tuesday, ahead of the bipartisan sit-down, Trump sent his top economic officials to Capitol Hill to pick up the pace of the talks. Treasury Secretary Steve Mnuchin, and Director of the Director of the National Economic Council Gary Cohn spoke with Republican leaders in the Senate and on the Budget Committee.
Earlier in the day at a CNBC event in Washington, Mnuchin stressed that getting tax reform is “the most important issue for the American economy.”
He kept the door open to working with Democrats to reduce corporate tax rates, repatriate offshore earnings, cut taxes paid by middle-class Americans and simplify the tax code. “These are issues that both Democrats and Republicans should understand. Having said that, if we can’t get 60 votes, we’re prepared to use reconciliation to get this done.”
