PrintMcCain a 'yes' on tax reform, but obstacles remain
In a surprise announcement, Senator John McCain said he would vote for the Republican-sponsored tax bill in the Senate.
McCain's announcement was a surprise because of his animosity shown toward Donald Trump and his history of opposing other tax reform legislation, specifically the Bush tax cuts.
"After careful thought and consideration, I have decided to support the Senate tax reform bill," McCain said in a statement. "I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long-overdue tax relief for middle-class families."
Stocks surged on Thursday amid developments surrounding the tax bill, called the Tax Cuts and Jobs Act. The Dow climbed by over 350 points at one point in the afternoon, while the Nasdaq jumped more than 60.
McCain's support was considered a toss-up because he voted against tax cuts under President George W. Bush in 2001 and 2003.
McCain, who is sick with a brain tumor and probably won't run for re-election, may not want to leave a legacy of obstructionism. He already cast the deciding vote against repeal of Obamacare and has spoken vociferously against the president in many forums. He was critical of the tax bill until the GOP leadership slightly reduced the amount of the tax cuts to sweeten the pot for deficit hawks.
While McCain's conversion is huge, there are other hurdles for the tax bill to get by before a successful vote.
The Senate parliamentarian ruled Thursday that a fiscal "trigger," important to winning deficit-wary Sen. Bob Corker's support for the GOP plan, will not work under Senate rules. Republican senators are now looking to find new ways to address the concerns of Corker, a so-called deficit hawk Republican from Tennessee.
"It doesn't look like the trigger is going to work, according to the parliamentarian," Cornyn told reporters, according to Politico. "So we have an alternative, frankly: a tax increase we don't want to do to try to address Sen. Corker's concerns."
The setback came shortly after the nonpartisan Joint Committee on Taxation estimated that the plan would fall $1 trillion short of paying for itself, even after economic growth is taken into account. While GOP Senate leaders like John Cornyn of Texas and John Thune of South Dakota downplayed the findings, Corker pushed for a way to make up for the budget hole.
Republican Sens. Jeff Flake of Arizona and James Lankford of Oklahoma are among the other GOP senators with fears about the proposal ballooning budget deficits.
Sen. David Perdue of Georgia said his fellow Republicans are considering future tax increases not linked to any trigger as part of the bill.
Lawmakers are weighing whether to make corporate tax cuts in the plan expire in year six or seven, Reuters reported, citing a Republican senator and an aide.
Shortly before the parliamentarian's ruling, Corker, Flake and Sen. Ron Johnson of Wisconsin delayed voting on a measure to advance the bill as they talked with GOP leaders on the Senate floor. After the conversation, the senators voted to push ahead.
This bill gets smellier by the hour. Making corporate tax cuts temporary – even if they last a decade – defeats the purpose of the bill and would put us in exactly the same position ten years from now that we're in today – imposing the biggest tax rate on corporations in the industrialized world.
But what do these senators care? In ten years, most of them will be out of office anyway. The goal for Republican senators now appears to be to get something, anything, passed, not in the interest of growing the economy, but to save their own miserable hides from the wrath of voters.
What's needed from the GOP leadership is a promise that along with the tax cuts, there will be spending reforms – or, at least, a return to responsible budgeting rather than passing these endless continuing resolutions with built in spending increases. That way, as revenue increases as a result of the tax cuts, downward pressure on the deficit will also come from getting control of the budget.
In looking to please everyone, McConnell is in the process of making tax reform irrelevant. As for those "deficit hawks" opposing the bill because they're uncomfortable with adding to the budget deficit, it would be nice if they were half as concerned about spending when Congress continually busts the budget by passing massive continuing resolutions.
Voting for tax reform should be a no-brainer, both for the economy and for Republican political fortunes. It's too bad that McConnell feels the need to water down the tax cuts to satisfy a few holdouts.
