Senate GOP OKs $1.5T Tax Cut Plan 09/20 06:14
Senate Republicans are zeroing in on a tax outline that would add about $1.5
trillion to the government's $20 trillion debt over 10 years, justifying the
spurt of red ink with promises of surging economic growth and a burst of new
WASHINGTON (AP) -- Senate Republicans are zeroing in on a tax outline that
would add about $1.5 trillion to the government's $20 trillion debt over 10
years, justifying the spurt of red ink with promises of surging economic growth
and a burst of new revenues.
Tennessee Sen. Bob Corker, a member of the chamber's dwindling band of
deficit hawks, and Sen. Pat Toomey, R-Pa., one of the chamber's more ardent
believers that tax cuts can pay for themselves, said they sealed an agreement
The $1.5 trillion figure, confirmed by congressional officials familiar with
the agreement, would allow deeper cuts to tax rates than would be allowed if
Republicans followed through on earlier promises that their coming tax overhaul
wouldn't add to the deficit.
The agreement would represent an about-face for Capitol Hill GOP leaders
such as Senate Majority Leader Mitch McConnell, R-Ky., and House Speaker Paul
Ryan, R-Wis., who for months have promised that the GOP tax overhaul would not
add to the budget deficit, currently estimated to hit about $700 billion this
year. Deficits over the coming decade were already projected to add $10
trillion to the debt.
The broad-brush tax cut number, if approved by the Senate, would pave the
way for the Senate's tax writers to slice corporate and individual tax rates
and curb tax breaks in hopes of boosting economic growth to 3 percent or more
as promised by President Donald Trump.
Corker and Toomey formally announced an agreement late Tuesday, but didn't
provide a specific dollar amount. They called it "a path forward on tax reform"
that would allow for tax cuts over 10 years.
While each Republican senator will be able to make their own decision, "I
believe our agreement gives the tax-writing committees enough headroom to
achieve real tax reform that eliminates loopholes and lowers tax rates for
hardworking Americans," Corker said.
Corker had pressed for a lower figure, saying he didn't want the GOP tax
plan to cause the debt to spiral further. Now, he's taking a more generous view
of so-called dynamic scoring, which takes the economic effects of legislation
into account when determining its impact on the government's books.
"We hope this is highly pro-growth. We hope, by the way, that Congress will
be firm in closing loopholes," Corker told reporters. "Honestly, that worries
me the most about all of this."
The divide between the Senate GOP's deficit hawk and "supply side" wings had
taken weeks to resolve. Republicans preached a hard line on the deficit while
Barack Obama was president but are taking a more lenient approach now that
Trump is occupying the Oval Office, promising a huge budget boost for the
military and signaling an openness to working with Democrats to increase
domestic agency budgets, too.
Unlike the House, Senate Republicans aren't planning to pair the tax measure
with spending cuts.
The work of the budget panel is critical since Republicans need to agree on
a budget plan in order to pass follow-up tax legislation without fear of a
filibuster by Democrats. But both House and Senate Republicans are divided and
the budget debate is months behind schedule.
Earlier Tuesday, Sen. Ron Johnson, R-Wis., one of the budget panel's more
ardent advocates of tax cuts, said a 10-year, $1.5 trillion tax cut "ought to
be a minimum."
Proponents of strict government spending policies swiftly condemned the
agreement, warning of further ballooning of the national debt.
"With the U.S. in such a dangerous fiscal situation, policymakers shouldn't
even consider voluntarily adding another $1.5 trillion to our national debt,"
Michael Peterson, president of the Peter G. Peterson Foundation, said in a
statement. "Reaching $20 trillion in debt should be a wake-up call to solve our
fiscal challenges, not an invitation to add to the problem."
Many Republicans in Washington promise that cutting corporate and individual
rates and ridding the code of inefficient tax breaks, deductions and
preferences will boost the economy and cause a burst of new revenue. But the
outlines of their tax plan itself remain secret, and it's not clear how
successful they will be in cleaning up the loophole-choked tax code.
Congress' impartial scorekeepers have accepted the premise of such dynamic
scoring, but past studies by the Joint Tax Committee and Congressional Budget
Office have been cautious about how much economic growth and tax revenues would
follow tax cuts.
Only Monday, Corker opposed an overwhelmingly popular defense measure that
would smash the budget, saying "the inability to get our fiscal house in order
is the greatest threat to our country."
The development also means, under the tricky Senate rules governing
fast-track debate on the budget and taxes, that some of the provisions in the
upcoming tax measure would have to be temporary.