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Republicans Seek Tax Reform Consensus Before August Recess

Posted on July 11, 2017 by Jonathan Curry

Just a day after Treasury Secretary Steven Mnuchin said that a unified Republican tax reform plan would be unveiled in September, a White House aide said the goal is to have a draft “locked in place” before the August recess.

White House Director of Legislative Affairs Marc Short said July 10 that if Republicans have a plan in place before lawmakers head home for August, they could “begin the markup process when we return” from the recess. His comments align with those made by Mnuchin July 9 on ABC’s This Week, where he said that the objective is to have a “full-blown release of the [tax reform] plan in the beginning of September,” with final passage to come before the end of the year.

The pre-August draft goal coincides with top Republicans’ desired time frame for fully repealing and replacing the Affordable Care Act, a timeline that Short reaffirmed at an off-camera press briefing. Though progress on the Better Care Reconciliation Act (H.R. 1628) stalled in the Senate, forcing Republicans to postpone a vote planned for June 27, Short said the bill was changing significantly, and predicted that it will get enough votes to pass. In particular, he highlighted a change to allow individuals to pay their healthcare premiums using funds from health savings accounts.

“We’re confident it’s going to pass and we’re not going to be in a position of failure,” Short said.

Short also complained about the slow pace of Senate confirmation of President Trump’s appointments relative to previous administrations, which he blamed largely on Democratic obstruction. He hinted that if the Senate doesn’t move faster on confirmations over the next few weeks, then Trump “has every right to call Congress back [from recess] if necessary.” Trump hinted at a similar scenario himself earlier that day, tweeting, “I cannot imagine that Congress would dare to leave Washington without a beautiful new HealthCare bill fully approved and ready to go!”

Several key Trump administration nominees remain stuck in confirmation limbo, including Council of Economic Advisers Chair nominee Kevin Hassett and Treasury assistant secretary for tax policy nominee David J. Kautter. A confirmation hearing for Kautter could take place as early as July 13.

‘Fake Leak’

A story that White House chief strategist Stephen K. Bannon is leading an effort to hike the top individual tax rate to 40 percent or above is a “false leak,” according to Mnuchin.

The Trump administration’s position on what it wants the top individual tax rate to be is no different than it was in late April when it released its tax reform plan outline — 35 percent — Mnuchin said during his This Week interview. Bannon reportedly had advocated for the top individual tax bracket to “have a 4 in front of it,” according to a July 2 account published by Axios.

Mnuchin again expressed a preference that tax reform be revenue neutral, but also hinted that the White House may look to substitute the scorekeeper. He said that the administration may use its own internal economic models as the official estimate for the bill instead of relying on the Joint Committee on Taxation to project the revenue changes of the tax reform bill.

The administration’s models have already projected they could create more than $2 trillion of additional revenue through tax reform, he said. That additional revenue would ensure that the administration’s ambitious tax cuts “will be paid for over 10 years,” Mnuchin said. He added that the decision over which model to use as the official estimate is “one of the things that’s under negotiation that we’re discussing right now with leadership.”