Update on the Senate GOP tax bill clusterfuck (updated)

The  tragedy of the  political career of John McCain is that he is a man who frequently espouses high morals and principles and assails others for not having them, McCain: Trump doesn’t have any ‘principles and beliefs’, but he has regularly failed to live up to the very principles which he espouses. He is ultimately a “say anything” politician who plays to his fawning base, the beltway media and Arizona media, who treat him as if he is a senior statesman. McCain is and has always been nothing but a deeply flawed hypocrite.

On the same day McCain criticized our Twitter-troll-in-chief for not having any principles and beliefs, McCain demonstrated that he does not follow his own principles and beliefs, recently expressed in his August op-ed John McCain: It’s time Congress returns to regular order and his dramatic floor speech in the Senate chastising his colleagues prior to the vote on the “skinny repeal” of Obamacare.

Mr. “regular order” gave his consent to the Senate GOP tax bill which at this very moment is still being drafted with provisions no one has seen or read, a tax bill which Senate GOP leadership drafted in secret without Democratic input, committee hearings, stakeholder or public testimony or input (both stakeholders and the public are opposed to this terrible bill), and was just introduced last week, with only a markup before the Senate Finance Committee which reported out the bill on a party-line vote, so that it could be rushed to a vote by the end of this week before anyone could discover what is in it.

As Laurie Roberts of The Republic laments, John McCain’s support of tax reform bill is another ‘danged fence’ moment. Even when confronting his own mortality and having to answer before his God, John McCain simply would not do the right thing for the American people.

Other key developments in the GOP tax bill on Thursday: the congressional Joint Committee on Taxation (JCT), employing magic asterisk dynamic scoring sprinkled with “trickle down” fairy dust, nevertheless says the Senate tax bill will add $1T to deficits, even with growth:

The Senate GOP tax bill won’t produce enough economic growth to fully pay for its tax cuts, the Joint Committee on Taxation (JCT) said in an analysis released Thursday.

The bill’s macroeconomic effects would reduce the deficit by $408 billion over 10 years, but the bill overall would still cost about $1 trillion, the JCT said.

The JCT had earlier estimated that the bill would lose $1.4 trillion in federal revenue before accounting for economic growth.

The JCT report and prior CBO report are the only reports the Senate has to work from because the Treasury Department, which is supposed to do an economic analysis of the tax bill, failed to do an analysis despite frequent assertions from Treasury Secretary Stephen Mnuchin that such an analysis was being prepared. Ahead of Vote, Promised Treasury Analysis of Tax Bill Proves Elusive:

In pitching the $1.5 trillion tax overhaul, Steven Mnuchin, the Treasury secretary, has said repeatedly that the plan will pay for itself through a surge of economic growth and that over 100 people in Treasury are “working around the clock on running scenarios for us.”

Mr. Mnuchin has promised that Treasury will release its analysis in full. Yet, as the full Senate prepares to vote on a sweeping tax rewrite, the administration has yet to produce the type of economic analysis that it is citing as a reason to pass the tax cut.

Those inside Treasury’s Office of Tax Policy, which Mr. Mnuchin has credited with running the models, say they have been largely shut out of the process and are not working on the type of detailed analysis that he has mentioned. An economist at the Office of Tax Analysis, who spoke on the condition of anonymity so as not to jeopardize his job, said Treasury had not released a “dynamic” analysis showing that the tax plan would be paid for with economic growth because one did not exist.

The Inspector general launches inquiry into whether Treasury hid Republican tax bill analysis: 

The Treasury Department’s inspector general has launched an inquiry into whether the department hid an analysis of the Republican tax bill — or even did one at all.

* * *

Sen. Elizabeth Warren (D-Mass.) wrote to Treasury Inspector General Eric M. Thorson on Thursday asking for an inquiry after a New York Times article said members of the Treasury’s Office of Tax Policy, which would do such an analysis, said they were not working on one.

“Either the Treasury Department has used extensive taxpayer funds to conduct economic analyses that it refuses to release because those analyses would contradict the Treasury secretary’s claims, or Secretary Mnuchin has grossly misled the public about the extent of the Treasury Department’s analysis,” Warren wrote. “I am deeply concerned about either possibility.”

Rich Delmar, counsel to the inspector general, said Thursday the office had launched an inquiry and that it was a “top priority.”

In any event, the JCT report caused a revolt by a small number of deficit hawks peacocks in the Senate, namely Bob Corker (TN),  Ron Johnson (WI), and Arizona’s own Jeff Flake, who unlike John McCain, is at least pretending to stand on his principles. This revolt has pushed the tax debate into Friday, with the potential to delay a vote into next week.

The Hill reports, McConnell works to salvage tax bill:

Senate Majority Leader Mitch McConnell (R-Ky.) has his work cut out for him to save the Senate tax bill, which stalled Thursday evening after three GOP rebels threatened to effectively kill it.

After weeks of careful negotiations, Senate Republicans are locked in a huge behind-the-scenes fight over what the tax bill should look like.

To pass the bill, McConnell and his leadership team will have to craft substantial revisions and they have only 24 hours to do it, give or take, or otherwise postpone the effort altogether until next week.

To appease Sens. Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.), McConnell would have to reduce the total size of the $1.4 trillion tax package by $350 billion to $450 billion.

But that approach isn’t sitting well with many Republican senators.

“It’s way too much to give to one person,” grumbled one GOP lawmaker, who asked for anonymity to give his frank opinion of the leadership’s promise to Corker.

Rep. Mark Meadows (R-N.C.), the chairman of the conservative Freedom Caucus, said the proposal wouldn’t fly in the House.

“Obviously we’re not in favor of that,” he said. “I don’t see that as good news.”

McConnell also could seek to win over Sen. Ron Johnson (R-Wis.) by eliminating the deduction big companies known as C corporations receive for state and local taxes.

Johnson wants to use the money to increase the proposed deduction for companies classified as pass-through businesses.

“It’s an elegant solution, I like it,” he said.

Johnson wants to increase the deduction for pass-through businesses to 25 percent, which he says would create an effective tax rate of about 28 percent.

* * *

Right now it looks like appeasing Johnson — rather than giving in to the demands from Corker and Flake, is the solution that would be more popular with the rest of the GOP caucus.

The problem McConnell faces in bringing aboard Corker and Flake is that Senate tax writers need to figure out precisely how to slim down the tax package by $350 billion.

Sen. John Hoeven (R-S.D.) told reporters that one proposal is to impose an Alternative Minimum Tax on high-income individuals and big companies.

Other GOP senators, however, may prefer setting the corporate tax rate a few percentage points higher than the 20-percent rate preferred by President Trump.

Republicans control 52 seats and can afford only two defections on the legislation. Vice President Mike Pence would break a 50-50 tie.

McConnell adjourned the Senate at 9:15 pm Thursday to give tax writers time to work to come up with a potential compromise.

The Senate will reconvene at 10 a.m. Friday and hold its next round of votes at 11 a.m.

* * *

Corker, Flake and Johnson surprised Senate leaders on the floor Thursday evening by threatening to vote for what most lawmakers thought was a routine motion to send the tax bill back to the Finance Committee.

McConnell stood in the well of the Senate, his arms crossed, growing red in the face, while Corker, Flake, and Johnson refused to vote to defeat the motion, which all Democrats backed.

Senate Republican Whip John Cornyn (R-Texas) was overheard on the floor saying the motion would “kill the bill.”

McConnell, Cornyn and the rest of the leadership team scrambled to appease Corker and Flake by promising to lop $350 billion to $400 billion off the tax package.  GOP to reduce tax relief by $350B to win over deficit hawks. (“The Club for Growth pounced on Sen. Corker on Thursday night, accusing him of breaking his agreement with Sen. Pat Toomey (R-Pa.) to set the total size of the tax package at $1.5 trillion.”)

Corker and Flake dug in their heels after the parliamentarian ruled that their proposal to set a trigger to roll back tax relief in case it failed to spur big economic growth ran afoul of the Senate rules.

So GOP leaders agreed to phase out a big chunk of the tax package after six or seven years.

“It’s automatically going to kick in, period. So it’s much more secure,” Corker said after the floor showdown.

It was a huge concession and left the leadership fuming as they walked off the Senate floor.

“It doesn’t look like the trigger is going to work, according to the parliamentarian, so we have an alternative, frankly, tax increase we don’t want to do to try to address Sen. Corker’s concerns,” Cornyn told reporters.

Sen. Jim Risch (R-Idaho) said chopping $350 billion off the bill threatens to upset the carefully crafted product put together by the Finance Committee.

“They put together what I think is a balanced package. The difficulty is it doesn’t take much to upset the balance,” he said.

And even if McConnell ropes in Johnson, Corker or Flake, there’s still a risk he suffers other defections.

Sen. Jerry Moran (R-Kan.) said he’s also worried about the deficit but declined to comment on the concession promised to Corker and Flake.

“I do share concerns about the deficit and I continue to be hopeful there’s a solution,” he said.

So what about the mythical moderate from Maine, Sen. Susan Collins? She seems to believe she has a deal on “Obmacare” fixes, so she is also a yes on the tax bill. Collins: Health-care fix will pass before tax bill:

Sen. Susan Collins (R-Maine) said early Thursday that she expects legislation to lower health-care premiums to pass Congress before senators take a final vote on a $1.5 trillion tax-reform bill that would repeal the Affordable Care Act’s individual mandate.

* * *

Senate GOP leaders at the urging of conservatives have added to the tax package a provision that would repeal ObamaCare’s requirement that people purchase health coverage. The Congressional Budget Office estimates that could cause insurance premiums to rise and increase the number of uninsured by 13 million people by 2027.

To mitigate the impact, GOP leaders plan to pass legislation negotiated by Senate Health Committee Chairman Lamar Alexander (R-Tenn.) and Sen. Patty Murray (Wash.) that would reinstate cost-sharing reduction payments to insurance companies.

It will be paired with legislation sponsored by Collins and Sen. Bill Nelson (D-Fla.) that would set up health reinsurance programs for older and sicker individuals.

The measures are likely to be attached to a government stopgap funding bill [continuing resolution], Collins said.

“I have met with the president of the United States about this and have gotten his endorsement, I’ve met with the Republican leadership and with the members of the Finance Committee,” she said. “They are most likely to be on the continuing resolution.”

“Assuming the tax bill passes the Senate, we then turn to the CR and those two bills will be put on the CR,” she said.

“While the tax bill is in conference, the CR will presumably become law and then the tax bill come back from conference,” she said. “So I’m going to know whether those provisions made it and that matters hugely to me.”

Well, Sen. Collins, there is also the possibility that the Senate GOP tax bill, if approved, is simply sent to the House for its vote on the bill, bypassing any need for a conference committee. It’s true that the Senate bill is unlikely to pass in the House because of opposition from the House Freedom Caucus to provisions added by the Senate, but it could happen.

The House Freedom Caucus is also opposed to doing anything to support “Obamacare,” so it is unlikely there are the votes to pass these “Obamacare” fixes from the Senate in the House with just Republican votes. And right now GOP leadership is talking about passing a continuing resolution with just Republican votes.

So the mythical moderate from Maine is going to jump off the cliff and vote for the Senate GOP tax bill without any guarantee that her “deal” is really going to happen.

And as I pointed out yesterday, these so-called “Obamacare” fixes are wholly inadequate, so what’s the point? The Senate GOP tax bill is also an assault on health care.

UPDATE: It looks as if only one GOP senator will have the courage to vote no on this terrible GOP tax bill. Corker to vote no on GOP tax bill.

The mythical moderate from Maine, Susan Collins, is playing the fool on her inadequate plan to “fix” the “Obamacare” sabotage by president Trump and her GOP colleagues. Collins to vote for GOP tax plan.

And our own “Conscience of a Conservative” is a deficit peacock who does not have a conscience. How GOP won Jeff Flake’s vote on tax bill: Phasing out business investment break:

Republican Senate leaders won over Arizona’s Jeff Flake on the tax cut vote by changing the bill to phase out the provision that allows businesses to immediately write off the cost of all new equipment purchases, the GOP senator said Friday.

Really, Dude? You sold out for so little?

The measure was enough to get Flake to declare that he would vote for the bill. In doing so, that left Tennessee’s Bob Corker isolated as the only senator holding out on the bill because of its deficit impact.

To get Flake’s vote, leaders also promised to include him in discussions related to the fate of the Deferred Action for Childhood Arrivals policy.

On this point, Laurie Roberts of The Republic writes, Jeff Flake sells out middle class for DACA.