(Bloomberg) -- The Senate tax bill is headed for a marathon debate this week with the aim to hold a floor vote as early as Thursday. Should it pass, Republican leaders will have to hammer out a compromise between different provisions in the House and Senate bills. Here are the latest developments, updated throughout the day:
McConnell Is Said to Oppose Major Changes (1:05 p.m.)
Senate Majority Leader Mitch McConnell’s aides say fundamental transformations to the tax bill that’s pending in the Senate won’t be considered, according to a person who attended a meeting with the staff members Monday.
Senators who want to see additional tax cuts or to restore particular tax breaks will be allowed to file amendments that contain mechanisms to pay for their plans, said the person, who asked not to be named because the discussion was private. McConnell’s aides met with representatives of various groups interested in the tax legislation, the person said. McConnell’s office didn’t immediately respond to a request for comment.
At least two Republican senators are seeking substantive changes to the tax legislation. Ron Johnson of Wisconsin wants more generous tax treatment for partnerships, limited liability companies and other so-called pass-through businesses. And James Lankford of Oklahoma says he’s in talks to create a mechanism in the bill that would prevent a boost in U.S. debt -- perhaps by calling for tax increases if the cuts don’t pay for themselves.
The GOP controls only 52 seats in the Senate, and will need at least 50 votes to approve a bill in a vote that could take place as early as Thursday. Should a vote succeed, Senate leaders plan to move immediately to a conference committee with House members to try to reconcile differences in the legislation, the person said. -- Jennifer Jacobs
Senator Seeks Debt Shield That May Mean Hikes (12:09 p.m.)
Senator James Lankford, an Oklahoma Republican who has been withholding support for the Senate’s $1.4 trillion GOP tax-cut plan, says he’s in talks to create a mechanism in the measure that would prevent a boost in U.S. debt.
The mechanism under discussion might boost tax rates if the bill doesn’t result in a sufficient level of economic growth to cover the cuts, Lankford told reporters. The bill’s proponents say they’re confident it would produce additional annual growth of 0.4 percent -- though independent studies have questioned that assertion.
Lankford, who has cited concerns over the bill’s impact on federal debt, declined to discuss whether he would favor increases in individual or corporate rates, or both, in such a plan.
He said the measure approved earlier this month by the Senate Finance Committee is being changed as it moves toward the Senate floor, adding that he still expects the full Senate to vote on the measure by week’s end.
“The conversations have all been extremely productive,” he said, adding that he’s been discussing his ideas with other lawmakers over a Thanksgiving recess. “Nobody is pushing back. No one is saying, No we don’t want to do this.”
Lankford also indicated he would support a motion to bring the measure to the floor, a critical vote to begin debate even as some negotiations may continue. -- Laura Litvan
Kentucky’s Paul Gives Senate Another ‘Yes’ (10:56 a.m.)
Republican Senator Rand Paul of Kentucky threw his support behind the GOP tax-cut plan this morning, giving the effort a small jolt of momentum as party leaders begin the tough task of rounding up a handful of critical holdouts.
“I’m not getting everything I want -- far from it,” Paul wrote in an op-ed posted on the Fox News website. “But I’ve been immersed in this process. I’ve fought for and received major changes for the better -- and I plan to vote for this bill as it stands right now.”
Paul had been withholding support, in part because he wanted tax cuts across the board and he wanted cuts far greater than the $1.4 trillion in the Senate proposal. Yet he said today he’s encouraged by many of its provisions, including a repeal of Obamacare’s mandate that Americans have health insurance or pay a penalty.
Paul indicated that his backing could be contingent on keeping the mandate repeal in any final bill, which might be a tall order. The House measure doesn’t include the individual mandate repeal, and some Republicans in both chambers object to the provision. That includes Senator Susan Collins of Maine, another GOP senator who has yet to back the Senate bill.
“Will we keep our word and cut taxes?” Paul said in the op-ed. “Will we do what we campaigned on and repeal the Obamacare mandate? I will fight for both, and I look forward to ending the year keeping these important promises to the American people.” -- Laura Litvan
Senate Plans Tax Vote Amid Trump Sales Pitch (9:17 a.m.)
The Senate may vote on its tax-cut legislation as early as Thursday as President Donald Trump signaled he will be more personally involved in the final push.
With several Republicans publicly uncommitted to supporting the bill, Trump is scheduled to have lunch Monday at the White House with members of the Senate Finance Committee and Vice President Mike Pence. Attendees will include Republicans Orrin Hatch of Utah, the panel’s chairman; Pat Toomey of Pennsylvania; Rob Portman of Ohio; Tim Scott of South Carolina; and John Cornyn of Texas, according to the White House.
“Senate Republicans will hopefully come through for all of us. The Tax Cut Bill is getting better and better,” Trump wrote on Twitter Sunday night. The president is also expected to head up to Capitol Hill on Tuesday to press Senate Republicans in person.
The dollar pared losses after Trump’s tweet. The Bloomberg Dollar Spot Index was down less than 0.1% as the euro and Canadian loonie relinquished gains against the greenback.
One potentially significant complication is that senators haven’t yet received an official estimate about the larger effects that the package of tax cuts for businesses and individuals would have on the U.S. economy.
The Congressional Budget Office reported on Sunday that Congress’s chief scorekeeper for tax legislation hasn’t been able to provide a quick-turn “macroeconomic analysis” of the Senate tax bill.
The lack of any official finding complicates arguments by the legislation’s backers, who say its package of tax cuts -- estimated to cost more than $1.4 trillion over a decade -- would actually pay for itself over time by generating economic growth. As Senate leaders hasten to gather and hold 50 votes from their thin, 52-seat majority, some lawmakers have already expressed reservations about the deficit impact.
The absence of any official “dynamic score” also reflects the unusually rapid pace that GOP leaders have chosen in their push to approve the measure. If they vote Thursday, it will be just 11 days after the actual legislation first appeared -- during a week when both chambers were on recess.
Yet in a year in which Republicans controlled both chambers of Congress and the White House, many party members have said there’s pressure to deliver on at least one major legislative achievement -- the sort that has so far eluded Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.
The bill’s path to passage isn’t clear yet. Three Republicans -- Tennessee’s Bob Corker, Arizona’s Jeff Flake and Oklahoma’s James Lankford -- have raised concerns about the measure’s effects on the nation’s debt, and Corker has said he won’t support legislation that adds to the deficit. He has said he’d allow for “reasonable” estimates of economic growth.
GOP Senator John Thune of South Dakota said on “Fox News Sunday” that even a small uptick in growth “would cover the cost” of the tax bill. But so far, he and other Senate leaders lack official findings to back their assertions.
Lankford said Monday on Fox News that he wants to ensure a “debt backstop” -- “that we have a built-in process to be able to, if the numbers don’t come in correctly, to make sure that we do actually provide a way to guard against debt and deficit.” He said lawmakers are working on such a mechanism and that he thinks the bill will be passed before Christmas.
On Tuesday, the Senate Budget Committee is scheduled to meet, and it may send the bill to the Senate floor. Two GOP panel members have emerged as potential sticking points. One of them is Corker and the other is Ron Johnson of Wisconsin, who wants more generous tax cuts for partnerships, limited liability companies and other so-called pass-through businesses. Senate leaders have said they want to address Johnson’s concerns.
The budget panel is expected to consider adding to the tax bill a provision that would authorize oil and gas development in the Arctic National Wildlife Refuge. The move -- long expected -- would be a boon for Alaska, the home of Republican Senator Lisa Murkowski.
Murkowski had been seen as a potential “no” vote on the tax legislation because of its proposal to end the “individual mandate” from the Obamacare law that requires people to purchase health insurance or pay a fine. But last week, she wrote in an op-ed for Alaska’s Daily News-Miner newspaper that she would support ending the mandate.
Doing so would raise roughly $318 billion by 2027, according to CBO estimates, because some 13 million people would drop their individual insurance -- and wouldn’t tap federal subsidies to help pay for it. Murkowski’s acceptance of the Obamacare provision in the tax bill may clear the way for her support, though Senator Susan Collins of Maine has also said she has concerns about the health-care provision.
What to Watch This Week:
- On Tuesday, the Senate Budget Committee is scheduled to meet on the tax legislation at 2:30 p.m. The panel, which has 12 Republicans and 11 Democrats, could decide to send the tax bill to the Senate floor. Trump is also scheduled to attend the regular policy lunch held by Senate Republicans.
- If all goes well for GOP leaders, the Senate may begin floor debate, which would culminate perhaps Wednesday or Thursday in a “vote-a-rama”-- a chaotic session in which any senator can offer an amendment to the bill. Democrats would be expected to offer a variety of amendments designed to damage, delay or derail the measure -- which may lead to some political fireworks. The voting would probably take place overnight.
- If Republicans have the 50 votes they need, Senate leaders may call for a floor vote on Thursday or Friday.
Here’s What Happened Last Week:
- The Senate Finance Committee released the text of its bill late on Nov. 20.
- Murkowski said on Nov. 21 that she won’t oppose the individual mandate provision in the tax bill, improving its chances of passage.
- The CBO reported that, so far there hasn’t been time to compile a macroeconomic study of the Senate tax legislation.
