Tax plan: Republicans are close to a big legislative victory. But will it help them politically?
Senate Republicans got what they so desperately needed early Saturday when an ugly process and a series of last-minute concessions put them within reach of a significant legislative victory in the form of major tax legislation.
But it remained to be seen whether the result — a convoluted measure that would cut corporate taxes and have mixed benefits for individual taxpayers — will spare Republicans from an emerging political backlash that was evident in Democratic election victories around the country last month.
Democrats said Republicans were sacrificing their core claim as the party of lower taxes for middle income Americans, while populist voters allied with President Trump may be unimpressed with deep cuts to the corporate tax rate, added protections for multimillion-dollar inheritances and other breaks for the rich.
Still, after an epic failure in their efforts to overturn the Affordable Care Act and little else of legislative note to show for their control of Congress and the White House, Republicans breathed a sigh of relief after they rounded up enough votes to approve the measure and send the Senate into final tax-cut negotiations with the House.
The satisfaction was evident in the wide grin sported on Friday by Senator Mitch McConnell, the Kentucky Republican and majority leader, as he prepared to celebrate on the floor with his colleagues — a stark reversal from his downcast demeanor when the bill momentarily teetered Thursday evening in a potential replay of the health care fiasco.
“This is about doing what we promised the American people,” said Senator Cory Gardner of Colorado, the head of the Republican Senate campaign organization that will play a major role in selling this tax plan to voters in advance of midterm elections next November.
Republican leaders did not see much alternative to meeting the final demands of uncommitted Republican senators since they were under immense pressure to get a win — any win. They hastily added provisions to appease Senators Susan Collins of Maine, Ron Johnson of Wisconsin and Steve Daines of Montana and offered assurances to Senator Jeff Flake of Arizona on immigration policy to guarantee their votes.
Democrats conceded that approval of the legislation — a sweeping bill that will cut corporate taxes and double the standard deduction — will prevent the first year of the Trump administration from being a legislative failure. But they believe that Republicans have made a political blunder because the reconfiguration of the tax structure — particularly new limits on the ability to deduct state and local taxes — will produce a tax increase for some voters who will be very unhappy when they realize it.
That could cost Republicans one of their bedrock principles. To appease party contributors demanding action on taxes, they may give up their mantle as the party of “no new taxes.”
“Today may be the first day of a new Republican Party — one that raises taxes on the middle class,” said Senator Chuck Schumer of New York, the Democratic leader. “The one thing Republicans always promised the middle class is 'we are not going to raise your taxes.'”
The tax debate came at a very unsettled time in Washington. As Republican lawmakers clustered on Friday behind closed doors in the Capitol in their final negotiations, Michael T. Flynn, Mr. Trump's former national security adviser, was at the federal courthouse just a short stretch down Constitution Avenue, pleading guilty to lying to the F.B.I. Accusations of sexual harassment are swirling around Capitol Hill. And lawmakers are still developing an endgame to finance the government after funding runs out next Friday.
Top Republicans were hoping that their success on the tax legislation after a difficult struggle would break through to the public and provide evidence to Americans that the Republican-controlled Congress could be effective. They say that the deep cuts in business taxes should spark an economic expansion that will benefit all Americans, though that argument has been disputed by economists and not reflected in past experience.
“This is a signature effort,” said Senator Pat Roberts, Republican of Kansas, adding: “This is at least in our view the restoration of an American renaissance and economic opportunity, for kids, grandkids and everybody present.”
Party strategists note that the Senate tax bill also includes some other long-sought Republican goals such as opening the Arctic National Wildlife Refuge in Alaska to energy exploration and elimination of the Affordable Care Act's requirement that most people have health insurance or pay a tax penalty.
“Considering the conventional wisdom that surrounded this Congress eight weeks ago, this is nothing short of a complete and total 180,” said Josh Holmes, a former top aide to Mr. McConnell who remains in close contact with him.
Democrats say that many voters already see the tax overhaul as heavily tilted toward the affluent, and they promise to drive that point home in the coming months.
“I am overwhelmingly hearing from people, what are the Republicans doing? Why are they pushing this big agenda that is going to put our country in trouble?” said Senator Patty Murray of Washington, a member of the Democratic leadership. “They all say it's such a giveaway to the wealthy and are just really stunned that this is happening.”
Tax policy can be hard for voters to grasp, as former President Barack Obama learned early in his term. The economic recovery act that he signed into law in 2009 included a number of tax cuts; the biggest one was titled “Making Work Pay,” and it offered a tax credit of 6.2 percent of earned income, up to $400 for individuals and $800 for couples.
But Jason Furman, who advised Mr. Obama on economic policy and is now teaching at the Harvard Kennedy School, said the cut did not register in the American psyche.
“Our perception in the White House was that no one had any idea that we had cut their taxes,” he said.
Senator Mark Warner, Democrat of Virginia, pointed to the strong Democratic showing — including a win in the governor's race — in his state in November and said voters are going to be disappointed when they don't see the benefits of the tax bill.
“In Virginia this past year, you had a Republican candidate that was running on a platform of tax cuts, and you had a Democratic candidate who was running on a platform of health care, and you saw the results,” Mr. Warner said.
But Republicans were frantic to do something big legislatively and a tax bill was the obvious policy area where they could come to agreement, even if it didn't come very easily. The months ahead will determine whether the effort staved off a political debacle or contributed to one.