We continue to monitor the progress of the fast moving tax reform bill as it moves through the Senate. On the evening of November 30, the Senate was preparing to take the final step toward passage of its tax reform bill. Late in the evening on November 30, GOP leadership was still working on a substantive amendment to the bill, which must comply with the Senate’s budget reconciliation rules. The Senate is then expected to move forward on a “vote-a-rama” on amendments, followed by a final vote on its bill amending the House’s Tax Cuts and Jobs Bill (HR 1).
At press time, vote-a-rama on amendments was expected to begin late November 30 or early December 1. Chances of approval of the bill during a final vote seemed brighter for GOP leadership earlier on November 30 as more Republican holdouts appeared likely to vote for the measure. A nonpartisan cost estimate of the bill released the same day, however, may prove to hinder GOP leadership’s efforts of intraparty unanimity, particularly among GOP “fiscal hawks.”
Previously reluctant to commit to the measure, Sen. John McCain, R-Ariz., released a statement on November 30 saying that he was prepared to vote yes. Gaining McCain’s vote was seen as a win for GOP leadership who has been engaging in ongoing negotiations with Republican senators to secure the required 50 GOP votes under the Senate’s reconciliation rules. McCain has shown in the past that he is willing to vote against the party’s efforts (he voted against the health care bill). Another GOP wildcard, Sen. Lisa Murkowski, R-Ala., also released a statement saying she was prepared to vote yes on the tax bill, as did Sen. Steve Daines, R-Mont., who had previously opposed the measure.
Among those key yet undecided votes include Sens. Ron Johnson, R-Wis., and Susan Collins, R-Me. At press time, Collins remained uncommitted to the bill.
Meanwhile, The Joint Committee on Taxation (JCT) released its much anticipated dynamic score of the Senate’s tax bill on November 30, which takes into consideration the projected impact of economic growth on the legislation’s costs. According to the JCT, even when considering economic growth, the Senate bill would fall short of paying for itself.
The JCT report, Macroeconomic Analysis of the Tax Cuts and Jobs Act (JCX-59-17), estimated that the Senate bill would increase GDP by roughly 0.8 percent on average over a 10-year budget period. Although the JCT estimates the bill would generate $408 billion in revenue from economic growth, it is also projected to add $1 trillion to the deficit
SFC ranking member Ron Wyden, D-Ore., took to Twitter to comment on the JCT’s dynamic score of the Senate GOP tax bill. “The GOP Tax Plan is not going to pay for itself. The bill has a net cost of $1 trillion over a decade, according to nonpartisan JCT,” Wyden said.
On the House side, Ways and Means Committee ranking member Richard Neal, D-Mass., too, criticized the tax bill. “Today, the JCT provided fresh evidence that even under the most generously optimistic economic conditions, tax cuts do not pay for themselves,” said in a statement in response to the JCT report. “The Republicans’ bill will add at least $1 trillion to the deficit at the expense of the next generation,” he added.
While the JCT score is seen as a somewhat positive report for the GOP on Capitol Hill, it does not come without potential setbacks. According to an SFC spokesperson, the JCT report is “incomplete,” because the JCT analysis does not represent a complete outcome of the evolving bill, which is expected to be amended. It remained unclear whether the preliminary JCT analysis would reverse any previous GOP yes votes or hinder any gain in support by others.
We will continue to monitor the progress of this bill and the impacts it has on our clients.