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House GOP moves to pass budget, start tax debate

By The Associated Press
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WASHINGTON (AP) — Republican leaders Thursday scrambled to overcome pockets of resistance in order to muscle through a GOP budget plan that would pave the way for a 10-year, $1.5 trillion tax cut measure that's now the highest priority of President Donald Trump and his GOP allies.

A close vote is assured amid opposition from hard-right Republicans unhappy about deficits and lawmakers from New York and New Jersey who fear the subsequent tax bill would take away a deduction for state and local taxes that's especially valuable to their constituents.

"This is a big issue and it has to be resolved," said Rep. Tom MacArthur, R-N.J., who supports the deduction.

The underlying budget measure which abandons the Republican Party's longstanding battle to rein in deficits in favor of President Donald Trump's promise for "massive tax cuts." The House is moving to endorse without changes a plan the Senate passed last week. It drops proposed cuts to autopilot "mandatory" programs such as food stamps, though conservatives promise to take on spending cuts later.

"I still feel strongly about addressing unsustainable mandatory spending," said Rep. Diane Black, R-Tenn. , who chairs the House Budget Committee. "I think we will tackle this important issue in the future. We don't have a choice."

Democrats united against the plan, charging that its tax cuts will pad the bank accounts of the wealthy and the balance sheets of corporations, while delivering modest relief — or none at all — to middle-income taxpayers.

"These tax cuts will not create an economic boom, but will instead lead to a higher concentration of wealth among the rich, while dramatically increasing deficits and debt," said Rep. John Yarmuth, D-Ky.

Ways and Means Committee Chairman Kevin Brady, R-Texas, says he'll schedule a panel debate and vote once the budget plan is safely passed, and much of the buzz in the Capitol concerned a flurry of horse trading as Republicans struggled to find ways to raise revenues to help finance cuts to individual and corporate tax rates. The goal is a full rewrite of the inefficient, loophole-laden tax code in hopes of lower rates for corporations and other businesses and a spurt of economic growth.

Brady, for instance, told reporters on Wednesday morning that he's still looking at curtailing tax-free deposits in 401(k) retirement accounts, a move that could raise revenue in the near term as retirement savings shift to Roth-style accounts that are funded with after-tax earnings. Rep. Carlos Curbelo, R-Fla., said the move would help expand a tax credit in which the government contributes to retirement accounts for low- and middle-income taxpayers.

Trump says he opposes curbing 401(k) donations, however, which tossed a monkey wrench into the process.

"The president will get much of what he wants I think in tax reform, but we are a co-equal branch," said Sen. Pat Toomey, R-Pa. "And we're going to write it."

Sen. Ron Johnson, R-Wis., came out squarely against reducing the cap on 401(k) contributions in an interview on CNN Thursday morning.

Key decisions about tax brackets, including a new bracket for high-income earners, remain up in the air. Outcomes on other provisions are unsettled as well, lending a sense of chaos as GOP leaders rush to fulfill a goal of passing the measure through the House before Thanksgiving.

"To do tax reform, you need money. And right now, even as we speak, they appear to be going wobbly on some of the issues they've raised with great certainty in previous weeks," said top Ways and Means panel Democrat Richard Neal of Massachusetts. "They've got a revenue problem, a real revenue problem. And you have to make some dramatic changes to benefits that people across America have come to expect and enjoy."

Republicans view passage of the tax measure as a career-defining dream, and its importance has only grown in the wake of the party's debacle on health care. But the tax plan's popularity is not a given with voters.

An Associated Press-NORC poll released Wednesday found most Americans saying Trump's tax plan would benefit the wealthy and corporations, and less than half believing his message that "massive tax cuts" would help middle-class workers.

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