Several Republican Senators Press for Late Changes in Tax Bill

By FeaturesDow Jones Newswires

Several Republican senators expressed last-minute doubts about the tax-overhaul plan in Congress, possibly an attempt to strengthen their negotiating positions before a compromise plan set to be released on Friday and final votes planned for early next week.

The presence of the wavering senators, plus concerns about the health of two others, underscored the fragile position of Republicans as they try to pass a sweeping $1.4 trillion overhaul of the tax code through a Congress with narrow majorities and no Democratic support expected.

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On Thursday, Sen. Marco Rubio (R., Fla.) said he would vote against the bill if the final measure doesn't expand child tax credits for low-income households beyond what is currently envisioned. Sen. Mike Lee (R., Utah), who has also wanted a more generous child tax credit, is also undecided on the tax bill in its current form, a spokesman said.

Senate Republicans passed their tax bill 51-49 earlier this month, leaving them little margin on the final version that will emerge from a House-Senate conference committee. Mr. Rubio and Mr. Lee both voted for the bill that passed the Senate.

Others say they are wavering. Sen. Bob Corker (R., Tenn.), the lone GOP no vote earlier this month, says he is undecided on the final version. Sens. Susan Collins (R., Maine) and Jeff Flake (R., Ariz.) also say they are waiting to read the final version.

Further complicating matters, Sens. John McCain (R., Ariz.) and Thad Cochran (R., Miss.) have had health issues and missed votes this week. Party leaders are counting on their votes next week.

Mr. Rubio objects to some of the priorities Republican leaders have set in compromise talks between the House and Senate. For example, they decided to set the corporate tax rate at 21% rather than 20%, but didn't use those extra funds to expand the child credit. They also lowered the top individual tax rate to 37%, below the top rates set in House and Senate plans.

"If you've found the money to lower the top rate...you can't find at least a little bit to at least somewhat increase the refundable portion of it?" Mr. Rubio told reporters on Thursday. "I can't in good conscience support it unless we are able to increase the refundable portion of it, and there's ways to do it."

In a series of tweets, he defended his push. "Tax negotiators didn't have much trouble finding a way to lower the top tax bracket and to start the corporate tax cut a year early," he said. "Adding at least a few hundred $'s in refundable cuts for working families who seem to always be forgotten isn't hard to do either."

Lawmakers on the conference committee are aiming to sign an agreement Friday morning, unveil it later Friday and then vote on that bill next week. President Donald Trump would then be able sign it into law and have most of it take effect in January.

Senate Finance Committee Chairman Orrin Hatch (R., Utah) told reporters he was concerned about Mr. Rubio's stance but hadn't spoken to him.

"Sen. Rubio would like to see us do a little more, and we're trying to work with him to get there," said Sen. John Cornyn (R., Texas), a member of the tax negotiating team. "We're trying to figure out what we can do. I can't give the current state of play on that since it's in flux, but the goal is to give a $2,000-per-child tax credit, with a significant portion of that to be refundable."

Under current law, the $1,000 credit is refundable, which means taxpayers get money back even if they don't pay income taxes. But the current credit is limited for some very low-income families. The Senate plan would double the credit to $2,000 per child and make $1,100 of it refundable. Mr. Rubio wants to increase that $1,100 and change the income levels so more low-income families qualify for the whole credit.

"I think we're making progress," said Sen. Tim Scott (R., S.C.), a conference committee member who also supports a larger child credit. He added that having a larger amount refundable would be his definition of progress.

Mr. Scott didn't say how lawmakers would offset any fiscal cost. One idea is to make the credit available to fewer people than planned.

The Senate bill sets the child tax credit to start expiring for households making $500,000; under current law, it begins phasing out at $75,000 for individuals and $110,000 for married couples. Making those thresholds closer to current law could pay for some of the change Mr. Rubio seeks.

Messrs. Rubio and Lee pushed an amendment during the Senate's tax debate that would have made more of the child tax credit refundable and paid for it by setting the corporate tax rate at 20.94% instead of the 20% the Senate passed. That attempt failed on a 29-71 vote.

Asked about Mr. Rubio's position, White House Press Secretary Sarah Huckabee Sanders said the administration was "extremely excited about the progress we've already made to double the tax credit" but said it would continue working with the senator.

Asked whether there was "more room to move" for the White House on the child tax credit, Ms. Sanders said, "Right now, we're going to focus on letting some of the Senate move forward in the progression of their conversations."

"Sen. Rubio will get there," Mr. Trump said Thursday when asked about his former campaign rival. "We will get there. It will be in a very short period of time."

Because of the narrow margin of support for the bill, the ultimate timing of the tax vote may also depend on the health of Mr. McCain and Mr. Cochran.

An original plan had called for the Senate to vote on Monday, with the House following on Tuesday. Now, the sequence of those votes is up in the air.

Mr. McCain has been receiving treatment at Walter Reed Medical Center related to side effects from his cancer treatment, according to his office. "He's just resting up," Mr. Cornyn said, adding that Mr. McCain would be at the vote next week. An aide for Mr. Cochran said he is expected to vote for the tax plan in the Senate next week.

Republicans are mindful of these and other factors in scheduling the vote. "It's all about timing and managing absences in the Senate," House Speaker Paul Ryan (R., Wis.) told reporters about which chamber would vote first. The House, he said, is "basically being flexible."

Republican leaders are working to build in as much of a cushion as possible to protect against the risk of any lost votes. On Wednesday, Senate Majority Leader Mitch McConnell (R., Ky.) sought to bring Mr. Corker on board, agreeing to make some changes the Tennessee senator sought, even though Mr. Corker said his concerns about tax bill adding to the federal budget deficit still haven't been alleviated. Mr. Corker declined to specify the changes.

Vice President Mike Pence was supposed to leave for the Mideast Saturday, but will delay departing until Tuesday. He breaks tied Senate votes.

Republicans have long planned to finish the tax bill in December, but they have extra incentive now after Tuesday's Alabama election. Sen.-elect Doug Jones (D., Ala.) won't be seated until after Christmas because the results aren't certified. That will make the party split in the chamber 51-49, and then any two GOP senators could make the difference.

Democrats have called on Republicans to wait on the tax vote until Mr. Jones is seated. Republicans have refused.

Republicans also want to pass the tax bill in the early part of next week so they have time to work on separate legislation to keep the government funded beyond next Friday, when a temporary spending measure expires.

Write to Siobhan Hughes at siobhan.hughes@wsj.com, Kristina Peterson at kristina.peterson@wsj.com and Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

December 14, 2017 19:19 ET (00:19 GMT)