Here’s Where the GOP Tax Plan Stands Right Now

The Senate tax-writing committee continues hammering out the details of its tax cut proposal on Tuesday, while the House may vote on its bill as soon as Thursday. Here are the latest developments, updated throughout the day:

Plan Revisions Coming Later Tuesday, Hatch Says (9:36 a.m.)

Senate Finance Committee Chairman Orrin Hatch said his “modified mark” isn’t ready yet and will be given to lawmakers “later today.”

Members of the panel will be given time to review the changes and weigh in on them during tomorrow’s hearing, according to Hatch.

Senator Ron Wyden, the committee’s top Democrat, blasted the move, saying Republicans are trying to advance a bill in “reckless haste” and that the process “doesn’t resemble the regular order in the finance committee.” He complained that Tuesday’s hearing would be a waste of time since members would be asking questions about a proposal that would change. — Sahil Kapur

Byrd Rule Rattles Senate As House Nears Vote (4 a.m.)

The House’s chief tax writer says he’s confident its tax bill will pass, but a major challenge continues to loom over Senate Republicans — the Byrd Rule, an arcane measure that says the final bill can’t add to the federal deficit after its first decade in place if lawmakers want to pass it with a simple majority.

The Senate Finance Committee is set to start debating the GOP tax proposal, which is estimated to cost $217 billion in the 10th year, with more red ink in subsequent years. That means there would have to be significant changes to avoid long-term deficits. Orrin Hatch, the panel’s chairman, acknowledged on Monday there’s still work to do. He’s expected to release a modified chairman’s mark on Tuesday that may aim for better numbers.

But how the revised version would bridge the gap remains a mystery.

Even Hatch seems unsure: “I know what’s in it but they may change it on me,” he said after his committee recessed Monday evening.

Senator Susan Collins of Maine offered some ideas for changes late Monday. They included setting the corporate rate at 21 percent, not 20, and keeping the current top individual rate of 39.6 percent for married taxpayers filing jointly who earn $1 million or more. The Senate bill proposes cutting that rate to 38.5 percent. The proceeds from those adjustments could go to providing a refundable childcare tax credit or preserving property tax deductions, according to Collins, who cast a pivotal vote to block an Obamacare repeal bill earlier this year.

The Senate proposal would limit its revenue losses in part by delaying a cut to the corporate rate — to 20 percent from 35 percent — until 2019, a year later than the House has proposed. It would also fully repeal all state and local tax deductions. The House wants to retain a break for state and local property taxes, capped at $10,000.

Across the Capitol, House Republicans were upbeat Monday night. Matt Gaetz, a Florida Republican who previously criticized the secret drafting of the bill, praised the way House leaders had educated members about the legislation and said he expects it to pass this week.

“After the cataclysmic stumble on health care I think people really are looking for a way to get to yes on taxes,” Gaetz said in an interview.

The Republican whip team reported that the tally for the tax bill was in a good place on Monday night, according to two House members briefed on the vote counting who were not authorized to speak publicly. Conservatives are mostly on board, and the focus is now on convincing members from high-tax states that the compromise to preserve the deduction for state and local property taxes will be included in the final bill, the two Republicans said.

The House has an easier task though, since it isn’t bound by the Byrd restriction on long-term deficits. As far as Ways and Means Chairman Kevin Brady is concerned, the ball is in the Senate’s court to find a solution.

“I assume the Senate will address it in their process,” Brady told reporters Monday. “At the end of the day the final bill has to comply with those Byrd Rules.”

House and Senate tax writers have been more concerned with meeting the first requirement of the Byrd rule — that the bill stay within the amount allotted in Congress’s 2018 budget resolution: $1.5 trillion. Each version just squeaks by — the House tax bill is estimated to add $1.44 trillion to the deficit, while the Senate proposal would add $1.496 trillion.

“We really haven’t analyzed it in the second decade,” Brady said.

If the Senate is able to fix its Byrd problem and approves tax legislation, the House and Senate versions will have to be reconciled in a conference committee. So eventually, Brady will have to deal with the long-term deficit issue and make sure his members support the potentially painful compromises that would stem the bill’s red ink. — Sahil Kapur, Anna Edgerton, Erik Wasson and Steven T. Dennis

What to Watch on Tuesday:

• The Senate Finance Committee will begin its markup at 9 a.m. Hatch is expected to introduce his modified chairman’s mark, which could include amendments that have strong support among committee members.
• Potential amendments related to the treatment of carried interest, retirement savings, corporate integration and state and local tax deductions could be introduced.
• House vote count results may emerge along with any minor revisions to the House tax bill. Brady said Monday afternoon he’s confident the chamber has enough Republican votes to pass its tax legislation this week.

Here’s What Happened on Monday:

• Opening statements from Senate Finance committee members, including Senator Ron Wyden, the panel’s top Democrat, who blasted GOP leaders’ process of crafting the bill as a partisan “farce” and labeled their statements about its benefits — including higher wages — as “trickle-down fantasy math.”
• President Donald Trump repeated his call for Congress to repeal the Obamacare law’s requirement that individuals purchase health insurance — and said the resulting savings could help offset a rate cut for top earners.
• The Congressional Budget Office said the Senate bill would increase the federal deficit over 10 years by $1.7 trillion, including increased debt service but not any macroeconomic effects from the legislation.
• A nonprofit group that spent more than $18 million to defeat Hillary Clinton in 2016 is turning its sights to Republican House members in high-tax states, including New York and New Jersey, saying it will be “counting on” them to support GOP tax legislation.
• For a full account of the day, click here.

— With assistance by Sahil Kapur, Anna Edgerton, Erik Wasson, and Steven T. Dennis