How Marco Rubio won a concession on the GOP tax bill

Government SpendingDow Jones Newswires

Final GOP tax plan expands child tax credit to sway Rubio

Dow Jones Newswires editor Glenn Hall, Independent Women’s Forum director of policy Hadley Heath Manning and FBN’s Connell McShane discuss Republicans’ decision to expand the child tax credit in their tax reform plan in order to gain Sen. Marco Rubio’s (R-Fla.) vote.

For two weeks, Republican Sen. Marco Rubio of Florida fumed that his party rejected his efforts to steer more money to low-income families in the GOP tax plan by making a child tax credit more accessible.

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Mr. Rubio got something for his anger. On Friday, Republican tax-bill negotiators agreed to make more of the child tax credit refundable, or available to taxpayers even if they pay no income tax. Under their deal, such filers would be able to get $1,400 of the $2,000-per-child-credit, up from $1,100 agreed to previously.

"There is still much more to do in the months and years to come," Mr. Rubio, the son of a bartender, said on Twitter. He nonetheless called the agreement a "solid step toward broader reforms" and planned to vote for the tax bill.

The agreement actually saved negotiations about $6.2 billion, because it was paid for by reversing a decision to allow the child tax credit for 17-year-olds. Still, the gamesmanship around the credit provided a window into last-minute dealing as Republicans tried to win needed votes.

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In the middle was Sen. Tim Scott of South Carolina, one of eight Republican senators appointed to the tax-bill conference committee assigned to iron out differences between the House and Senate bills. Mr. Scott is one of Mr. Rubio's best friends in the Senate.

Throughout the week, Mr. Scott could be seen engaged in shuttle diplomacy, one of the only visible links between Mr. Rubio and the Republican conferees who gathered behind closed doors to hammer out the tax deal.

"No one raised a hand of support for the Rubio position besides myself," Mr. Scott said in describing the meetings with tax negotiators.

"Trickle-down economics works," Mr. Scott said, agreeing that policies that help corporations also create an environment that encourages wage growth and job creation. "The challenge is it takes too long," he said in explaining that a child tax credit that was more available to lower-income people would have more immediate effects.

On Wednesday afternoon, Mr. Rubio and Mr. Scott left a meeting with Senate Majority Leader Mitch McConnell. Mr. Rubio had just finished telling Mr. McConnell that he would vote no on the GOP tax bill.

Republican negotiators had made room for a lower top individual tax rate and a faster cut in the corporate-tax rate, but initially gave no ground to Mr. Rubio. Activists and outside groups began to wonder why the onetime GOP presidential contender didn't get his demands met while lower-profile lawmakers, like Sen. Ron Johnson (R., Wis.), did earlier in the month On Dec. 2, Mr. Johnson won a compromise that directed an additional $114 billion for partnerships, sole proprietorships, and other "pass-through" businesses by threatening to vote against the tax bill.

"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," Mr. Rubio complained on Twitter. If they could do that, he argued, they ought to be able to find a way to expand the child tax credit.

Mr. Rubio was under intense pressure himself.

Mr. Rubio, along with Sen. Mike Lee (R., Utah), advanced an amendment to win better terms for the child credit but was soundly defeated. The lesson: His best leverage was a threat to vote no, as Mr. Johnson did.

Mr. Lee shifted his position to undecided, giving Mr. Rubio more leverage. Mr. McConnell called House Speaker Paul Ryan (R., Wis.) to say that unless the refundable portion of the child tax credit increased to $1400 from $1100, he didn't have the votes to pass the bill, according to a Republican familiar with the conversation.

Spokespeople for Messrs. McConnell and Ryan declined to comment.

Later Friday, another wavering Republican senator, Bob Corker of Tennessee, said he would vote for the bill too. He had been concerned the new tax bill would add to deficits. He didn't say why he changed his view and decided to vote for the bill, but with his support, passage now looks close to certain.

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