Senators Bob Corker and Jeff Flake have said they want to raise another $500 billion given a new analysis by the Joint Committee on Taxation, which found that the bill will increase the deficit by $1 trillion over a decade.
An analysis said the Senate bill would increase the federal deficit by $1 trillion over decade.
The Joint Committee on Taxation said Wednesday afternoon that the Senate tax bill would add $1 trillion to federal budget deficits over the next decade, even after accounting for additional economic growth, a major blow to Republicans’ contention that the $1.5 trillion tax cuts in the bill will pay for themselves through growth.
The committee, which serves as the nonpartisan scorekeeper for growth and revenue estimates in tax bills, estimated that the Senate bill would boost economic growth by 0.8 percent over a decade. Republicans have said they expect substantially stronger growth than that to result from the tax cuts.
Throughout the tax debate over the last month, Republican leaders have frequently cited other analyses by the committee in order to make their case for the bill.
The committee said economic growth generated by the tax cut will offset losses by about $458 billion over the next decade. Over that same period, an additional $51 billion will be needed to pay interest on the additional debt the government will borrow to pay for the tax cuts.
“Overall, the budgetary effects of changes in economic growth are projected to reduce the deficit by $407 billion during the budget window,” the committee said.
Republican leaders threw cold water on the analysis.
A spokeswoman for Senator Orrin G. Hatch, the Utah Republican who chairs the finance committee, said the joint committee’s analysis understates the actual economic growth and is not based on the current version of the bill.
“An analysis of tax provisions that do not reflect the final outcome of the evolving Senate tax bill — which will be amended on the floor this week — is incomplete,” said Julia Lawless, a spokeswoman for the Senate Finance Committee. “The nonpartisan Congressional Budget Office (CBO) has said it was ‘not practicable’ to issue a macro view of the Senate bill at this time. And given that leading economists have projected the Senate tax bill will deliver significantly higher amounts of economic growth and federal revenue than the Joint Committee on Taxation (JCT) reports, the findings of JCT are curious and deserve further scrutiny.”
Democrats wasted no time in seizing on the analysis.
Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee, said the analysis “ends the fantasy about magical growth and claims that tax cuts pay for themselves.”
“What it proves is that this bill offers very little other than a holiday bonanza to multinational corporations and special interests,” he said.
John McCain said he will vote yes.
Senator John McCain, the Republican from Arizona who was the deciding vote against repealing the Affordable Care Act, said on Thursday that he will vote in favor of the Senate tax cut 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,” Mr. McCain said in a statement.
Mr. McCain was seen as a wild card because of his willingness to buck his party’s leadership in the health care vote earlier this year. He also voted against big Republican tax cut packages in 2001 and 2003.
Some Republicans were worried that Mr. McCain could vote against the bill because of his sour relationship with President Trump. But Mr. McCain said that he was satisfied that the tax overhaul went through “regular order” in the Senate, with sufficient public hearings and opportunities for amendments.
While he said he remained concerned about the deficit and acknowledged that the tax bill is not perfect, Mr. McCain said that on balance it would be good for the country. “It’s clear this bill’s net effect on our economy would be positive,” Mr. McCain said.
But Senator Collins is still undecided.
Senator Susan Collins remains a key senator to watch, given she has yet to commit to the bill and could be the deciding vote between a tax bill that passes and one that fails. On Thursday, Ms. Collins outlined some of her priorities and concerns at a breakfast sponsored by the Christian Science Monitor.
On her vote:
Ms. Collins said she remains concerned about the impact of the Senate plan to repeal the Affordable Care Act mandate that most Americans buy insurance or pay a penalty and also wants to ensure that taxpayers can continue to deduct some state and local taxes, a provision known as SALT.
“The SALT amendment is extremely important to me. The health care agreement is extremely important for me. It would be very difficult for me to support the bill if I do not prevail on those two issues,” she said.
Ms. Collins said that as of Thursday morning she was optimistic about the measures after conversations with President Trump and Senate leaders.
Still, “I am not committed to vote for this bill because who knows what is going to happen on the Senate floor.”
On the corporate tax rate:
Ms. Collins said she was open to nudging the corporate tax rate above the 20 percent currently envisioned in the Senate bill.
“I don’t think we need to go to 20 percent on the corporate tax side,” she said. Senators have begun discussions about raising the rate to 22 percent, which would still be a big cut from the current 35 percent corporate tax rate.
On automatic spending cuts that could be required by tax bill:
“I strongly oppose that. I have written a letter to Mitch McConnell asking what is the plan to avert that. I met with Senator McConnell just yesterday and he has assured me that will not be allowed to happen.”
Ms. Collins said she expected that a waiver of the so-called Paygo requirements would be included in a year-end spending bill.
On an amendment that would close the carried interest loophole:
“I would make refundable the tax credit for child or adult dependent care. I would pay for it by closing the loophole on carried interest.”
The Senate version of the bill would not end the loophole but would simply extend the minimum holding period for investments that qualify for the tax break to three years from one.
Conservative groups warn against raising corporate tax rate.
The politically powerful Koch network warned Republican senators on Thursday not to adopt a last-minute change to their tax bill that help low-income parents in exchange for a slightly smaller cut in the corporate tax rate.
Senators Marco Rubio of Florida and Mike Lee of Utah have filed an amendment to the bill that would allow low-income workers to use an expanded child tax credit to offset payroll taxes, not just income taxes; the distinction matters for families that do not currently face income tax liability. The senators propose paying for the move by reducing the corporate rate to 22 percent instead of 20 percent from the current 35 percent rate.
In a letter on Thursday, several groups in the conservative Koch network said the change would amount to “undermining” the economic growth goals of the bill. “Business tax relief is central to the goals of creating jobs and promoting economic growth,” the groups wrote, “and we are concerned that any effort to hold the corporate tax rate above 20 percent will substantially limit our ability to achieve those goals and expand opportunities for all Americans.”
And Representative Kevin Brady also wants to keep 20 percent corporate tax rate.
Mr. Brady, Republican of Texas and the chairman of the Ways and Means Committee, said he did not believe there was any willingness on the House side to increase the corporate rate above 20 percent.
“I think we believe that is a rate that makes us, America, much more competitive, and we know from studies that had we had that rate, we’d have many more jobs and businesses and facilities here in the U.S.,” he said. “So we continue to stay focused on the 20 percent.”
Just a reminder that if the Senate passes its tax bill, it will need to reconcile the differences with the House version before a final bill can be sent to Mr. Trump.
Republicans promoted the virtues of their tax plan.
The Senate cleared a procedural hurdle on Wednesday with its vote to begin debating the tax bill, and early remarks from lawmakers offered a preview of what that debate will probably center on.
“This is an historic day as the Senate begins consideration of tax reform that will help boost America’s economy, that will create more jobs and that will leave more money in people’s paychecks,” said Senator Michael B. Enzi, Republican of Wyoming and the chairman of the Budget Committee.
Mr. Enzi offered a warning about the coming debate.
“You’re probably going to hear a lot of screaming going on in speeches this week,” he said. “Please don’t confuse volume with veracity or truth.”
But Democrats had a very different take.
Mr. Wyden offered another kind of warning.
“The Senate is 20 hours of debate away from a broken promise of truly historic proportions,” he said on Wednesday. This year, he said, was supposed to be when “the working people of America regained a powerful voice in Washington.”
“Instead of a strong voice, what they got instead was a big con job,” Mr. Wyden said. “If this Republican tax bill passes, Washington is going to reach into the pockets of working Americans and cut a big check to multinational corporations, to tax cheats and to the politically powerful and well-connected.”
Schumer urged Republicans to work with Democrats.
Senator Chuck Schumer of New York, the Democratic leader, criticized Republicans for how they had undertaken the tax overhaul, complaining that they had shut out Democrats as they put together their bill.
Mr. Schumer said the Republican tax bill had made “a mockery of the legislative process,” and he pleaded for Republicans to work with Democrats on taxes instead of moving forward with the current tax plan.
“If my Republican friends close the door on their partisan tax bill tonight,” he said, “they will find an open door for bipartisan tax reform tomorrow.”
The White House said the president will sign the tax bill.
The administration pledged official support on Thursday for the tax bill pending in the Senate, an unsurprising move that confirmed Mr. Trump’s promise to a Missouri crowd on Wednesday that he would sign the bill if it reached his desk.
“The Administration strongly supports Senate passage” of the bill, officials wrote in a statement of administrative policy, because it would reduce taxes for businesses and middle class families and simplify the tax code. The statement also praised provisions in the bill to repeal the individual health insurance mandate under the Affordable Care Act and to open part of the Arctic National Wildlife Refuge for oil drilling.
If the bill were presented to Mr. Trump, the statement said, “his advisers would recommend that he sign the bill into law.”