Trump, top House Republican admit there’s no chance of a middle class tax cut this year

(CNN)President Donald Trump and the top Republican tax-writer in Congress, House and Ways Means Chair Kevin Brady of Texas, conceded on Wednesday there was zero chance that middle-class Americans will see their taxes cut this year.

It was the first time the White House had returned to a last-ditch campaign promise since the President made the pledge at a rally in Nevada almost two weeks ago. The statement effectively closed the door on any chance of pushing through a tax cut this year.
Even as Trump has crisscrossed the country this week stumping for GOP members in the run-up to next Tuesday’s midterm elections, he has been noticeably mute on the issue.
“We are committed to delivering an additional 10% tax cut to middle-class workers across the country,” the two men said in a joint statement released by the White House. “And we intend to take swift action on this legislation at the start of the 116th Congress.”
The joint statement appeared to rule out any chance that legislation could be taken up during the lame duck session when lawmakers return to Washington after the elections.
Two weeks before voters headed to the polls, the President promised middle-class Americans another tax cut, saying it would be introduced by Congress in a week or two.
Trump said at the time that his administration had been working with Brady on a plan “very hard for a pretty long period of time.”
But in recent days that promise appeared to fade as even Brady tried to provide some political cover for the President’s tax proposal, stressing it would be a top priority for the next Congress only if Republicans are able to maintain their leadership in both chambers.
“We expect to advance this in the new session if Republicans maintain control of the House and Senate,” Brady said during an interview with CNBC last Friday.
Forecasters are predicting that Democrats will win the House, potentially setting up a split Congress, making any tax proposal a heavy lift for GOP lawmakers.
The President’s tax promise had sent Washington into a frenzy as reporters, politicians and analysts alike tried to figure out what he was talking about, leaving many to surmise there was no plan in sight and zero chance Congress could pass a bill in time.
“There is no plan,” said Howard Gleckman, a senior fellow at the Tax Policy Center. “There was never a plan.”
Even so, Trump’s new promise has sparked rumors in Washington over a number of strategies Republicans could employ to fulfill the President’s pledge depending on next Tuesday’s outcome, with each presenting their own set of tricky hurdles.
“We’re not done yet,” the two men said in the statement. “America’s workers deserve to keep more of what they earn.”
The Trump administration and GOP party leaders have been in active conversations for months about other tax measures that could be undertaken in coming years. In September, the House voted to make individual tax cuts, which are set to expire in 2025, permanent. And there are a host of other tax issues Republicans would like to get to, include retirement savings and education tax benefits.
“If there is a Republican Congress and a Republican president, there will be a tax cut every single year,” said Grover Norquist, president of the Americans for Tax Reform.
Brady, who speaks regularly with Trump and Treasury Secretary Steven Mnuchin, had previously suggested Congress could follow through on the President’s pledge using a symbolic gesture, formerly known as a nonbinding resolution, offering Republicans’ commitment to another middle-class tax cut.

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Under the Fog of Kavanaugh, House Passes $3.8 Trillion More in Tax Cuts

Mitch McConnell: Senate Will ‘Plow Right Through’ Kavanaugh Confirmation
Kavanaugh is accused of sexual misconduct.
By Glenn FleishmanSeptember 28, 2018
With attention fixed on the Brett Kavanaugh confirmation hearings, the U.S. House of Representatives passed a new $3.1 trillion tax cut on Friday. The vote was 220 to 191, including three Democrats.  The down-to-the-wire 2017 tax act passed in late December contained a mix of permanent and temporary changes that had to result in a net increased cost that fell within a structural limit of $1.5 trillion that allowed the Senate to approve the bill with a simple majority.

The House’s new bill takes effect starting in 2025, and would add $600 billion to the national debt within the next decade, and then $3.2 trillion in the 10 years after that, according to Howard Gleckman of the Tax Policy Center.

Despite the House vote, it is unlikely the Senate will take up the legislation. The first round of tax cuts landed with a thud, with even a leaked Republican National Committee poll—reported on by Bloomberg News—showing American voters thought it benefited “large corporations and rich Americans” by an overall 2-to-1 margin and the same margin among independent voters.

Without special rules in place, the Senate would vote under normal procedures, which can require 60 senators’ votes to pass a bill that is heavily opposed.

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Republicans Propose New Tax Cuts That Could Cost $2 Trillion as Deficit Grows 32 Percent in 2018

By Nicole Goodkind On 9/11/18 at 4:32 PM
President Trump Signs New Tax Reform Bill
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Republicans are pushing to pass additional tax reforms before midterm elections this November. But the changes, which would make the individual tax cuts passed in December permanent, could add another $2 trillion to the deficit over the next 10 years.

The proposed cuts came as the federal deficit hit $895 billion in the first 11 months of fiscal year 2018. That’s a 32 percent, or $222 billion, increase over last year’s deficit, according to the nonpartisan Congressional Budget Office.

Still, House legislators hope to make quick work with the bills, dubbed “tax reform 2.0,” in the 15 working days left before the November 6 elections. Republican Kevin Brady released his official proposal Tuesday, writing in a statement that “it’s the time to ensure we never let our tax code become so outdated again.”

House Ways and Means Committee Chairman Kevin Brady holds up an example tax form during a news conference with Speaker of the House Paul Ryan following the weekly House Republican Conference meeting at the U.S. Capitol. Chip Somodevilla/Getty Images

Republicans hope to remind voters of the December tax cuts and to take full credit for the thriving economy as they head into the polls. “We’re going to build on that success,” said House Majority Whip Steve Scalise last week. “We’re not resting on our laurels.”

“Anytime we’re talking about tax cuts and the growing economy, we’re winning,” said Matt Gorman, a spokesman for the National Republican Congressional Committee, to Reuters.

The plan is mostly about optics as the changes are not expected to pass this year. A favorable outcome in Senate would require 60 votes and a number of Republicans have already expressed their uncertainty. The proposal would also cement the $10,000 state and local tax (SALT) deduction cap, potentially hurting Republicans up for re-election in vulnerable states. “I do not favor that,” Representative Leonard Lance, who is running a tight race in New Jersey told The Hill. “I favor complete deductibility of state and local taxes.”

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Democrats believe the proposed cuts will help them come November. “With version 2.0 of the GOP tax scam for the rich, Republicans want to add even more to the deficit, and even more to the bank accounts of the wealthiest 1 percent,” said House Minority Leader Nancy Pelosi in a statement.

“Republicans’ first tax law raised taxes on middle-class families, hiked health care costs for millions and showered the most well-off and well-connected with massive tax cuts,” said Representative Richard Neal, the top-ranking Democrat on the House Ways and Means Committee, to the Washington Post. “This tax legislation won’t help workers or families, but it will further enrich GOP donors and provide Republicans with more ammunition to attack programs like Medicare and Social Security.”

House Speaker Paul Ryan and House Majority Leader Kevin McCarthy said last week that they intend to move the tax bill to a floor vote this month. The bill’s markup by the Ways and Means Committee will likely occur this week.

Under President Barack Obama, Ryan was considered a deficit hawk. In 2011, he won a “Fiscy” award, from the anti-debt Concord Foundation for “being the first [representative] in several years to step forward with a specific scorable budget plan that would actually solve the nation’s long-term structural deficits.” But in recent years, he’s advocated for tax and spending bills that added more than $200 billion to the deficit.

President Donald Trump campaigned on the promise to wipe out all federal debt within eight years. He reportedly suggested printing more money to make up for his tax and spending plans, according to Bob Woodward’s account, Fear: Trump in the White House. “Just run the presses—print money,” Woodward says Trump told then-chief economic adviser Gary Cohn.

The plan would add about $630 billion to the deficit by 2029 in addition to the $1.9 trillion the plan costs when higher interest payments are factored in, according to the Congress’ Joint Committee on Taxation.

The right-leaning Tax Foundation found that between 2026 and 2036, the bill will add another $2.4 trillion to the federal deficit.

The anti-deficit Committee for a Responsible Federal Budget (CRFB) estimated that the changes would cost $4 trillion over the next 20 years, or $5 trillion with interest.

“This is a plan built on quicksand—sinking in the very debt that finances it,” said CRFB president Maya MacGuineas in a statement. “Not only will it add hundreds of billions to the deficit, but it may actually slow long-term growth, especially if recent spending increases are also made permanent. With trillion-dollar deficits coming as soon as next year according to the White House’s own projections, it is beyond irresponsible to put even more tax cuts on the national credit card to fuel an economic sugar high that won’t last.”

The individual tax cuts passed last December are currently set to expire in 2025.

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