This week (November 27-December 1)

Congress: The House and Senate are in session. The Senate is set to consider the "Tax Cuts and Jobs Act." The bill is subject to 20 hours of debate followed, if necessary, by a "vote-a-rama" for certain filed amendments. Senate Majority Leader Mitch McConnell (R-KY) has expressed a desire to finish work on the bill by the end of the week (December 1).

President Trump is slated to meet with congressional leaders from both parties on Tuesday, November 28, to discuss issues that include tax reform and continuing government funding beyond the December 8 expiration.

Last week (November 20-24)

Eyes on Senate: Congress was out of session for the Thanksgiving holiday but plenty of attention was paid to the Senate consideration of tax reform legislation scheduled for next week. The Finance Committee, which by tradition marks up bills on a conceptual basis, released the legislative text of the "Tax Cuts and Jobs Act" late November 20, providing the first view of the exact mechanics of some provisions. Work has continued behind the scenes to evaluate the bill in the context of the Byrd Rule of the budget reconciliation process that will allow the bill to be approved with as few as 50 Senate votes (with the Vice President breaking the tie), which is essential given that Republicans hold 52 seats. The rule, among other things, precludes any title of the tax bill from adding to the deficit beyond the 10-year budget window and prohibits provisions that do not produce a change in outlays or revenues. Some changes were made prior to the November 16 Senate Finance Committee approval of the bill with these concerns in mind, including seeking more revenue from provisions in the latter years of the 10-year budget window and adding new provisions that kick in towards the end of the window. There were also signals this week from key senators who continue to have significant concerns with the bill, or who appear to be moving closer to supporting it.

Senator Collins: Senator Susan Collins (R-ME), who has long been a key Senate moderate vote, said on ABC's "This Week" November 19, "I want to see changes in that bill. And I think there will be changes." Collins said she thinks the reduction in the corporate tax rate to 20% is too steep, and that "we could go to 22%, and then use that money, which is about $200 billion, to restore the tax deduction for state and local property taxes. That would really help middle income taxpayers." She also said she would like the Senate bill, like the House version, to retain the top rate of 39.6% for those with annual income of $1 million or more, which could also provide revenue to "skew more of the relief to middle income taxpayers." Senator Collins, who continued to say that she hasn't reached a conclusion on whether she will support or oppose the bill, said the "biggest mistake" was adding the repeal of the Affordable Care Act's (ACA) individual insurance mandate (or effective repeal by reducing the tax penalty to zero). Collins said she hopes that provision, which is not in the House bill, will be dropped or that separate legislation to address the impact on premiums will be approved prior to moving to the tax bill. Asked whether individual mandate repeal would cause her to vote against the bill, she said, "It's a problem for me if it is not mitigated. But there is a way to mitigate the impact that it would have on insurance premiums."

Mulvaney on corporate rate: With regard to one of Collins' demands, the Administration has been unwavering in its demand that the corporate tax rate be reduced to at least 20%. Asked on CBS's "Face the Nation" November 19 whether the President would accept a corporate rate of 22%, OMB Director Mick Mulvaney said, "No, I don't think so." He said the President originally wanted a corporate rate of 15% but agreed with House and Senate leaders to go to 20%, "and I don't think you will see us interested in going above 20%."

Senator Murkowski: Meanwhile, another key moderate, Senator Lisa Murkowski (R-AK), said she supports the individual mandate repeal, although a spokesperson was reported as saying Murkowski continues to review the tax reform bill and has not reached a conclusion on whether she will support it. In an op-ed for the Fairbanks (AK) Daily News-Miner posted November 21, Senator Murkowski said, "I believe that the federal government should not force anyone to buy something they do not wish to buy in order to avoid being taxed." She also called for enacting the Alexander-Murray market stabilization legislation as quickly as possible. Murkowski is chairman of the Senate Energy and Natural Resources Committee, which November 15 reported reconciliation legislation to permit drilling in a portion of the Arctic National Wildlife Refuge (ANWR). The Senate Budget Committee is expected to act to combine the Energy and Natural Resources legislation, which is projected to raise more than $1 billion over 10 years, with the tax bill prior to floor consideration.

White House on individual mandate: While President Trump had encouraged congressional leaders to apply the savings from repeal of the individual mandate toward tax proposals, White House Legislative Affairs Director Marc Short said the Administration is not insisting upon it. On "This Week" November 19, Short said, "The White House is very comfortable with the House bill, because the House bill focuses on our three priorities: simplifying the tax code, reducing the corporate rate to bring jobs back, and focus on middle income families. As you know, it does not have the individual mandate in it." He said the Administration also, however, believes the individual mandate is a tax and is harmful to middle income families. "So, we like the fact that the Senate has included it in its bill," Short said.

Senator Johnson: Senator Ron Johnson (R-WI), who previously called for more of the benefit of the Senate tax bill to go to pass-through businesses, said November 19 the "signs are very encouraging" that sufficient changes will be made to secure his vote. On a local Wisconsin broadcast, Senator Johnson said he has heard from the President, Treasury Secretary Steven Mnuchin, and others regarding his concerns. "We're defining the problem. We're getting the information we need, so we actually fix this problem. I'm pretty encouraged with the reaction," Johnson said.

Senators with deficit concerns: There are other senators who have previously expressed concerns about the deficit impacts of tax reform, including Senators Bob Corker (R-TN) and Jeff Flake (R-AZ). In addition to their shared concerns, both senators are not running for re-election in 2018 and have had public disputes with President Trump. After Senator Flake was reported as making a disparaging remark concerning the President last week, President Trump tweeted November 19, "Sen. Jeff Flake(y), who is unelectable in the Great State of Arizona (quit race, anemic polls) was caught (purposely) on 'mike' saying bad things about your favorite President. He'll be a NO on tax cuts because his political career anyway is 'toast.'"

Quote of the Week

"Republican Senators are working very hard to get Tax Cuts and Tax Reform approved. Hopefully it will not be long and they do not want to disappoint the American public!" — President Trump tweet, November 19

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