Nightmare Scenario for GOP as Tax Overhaul Hits Resistance

Gary Cohn Andrew HarrerGetty Images
Andrew Harrer/Getty Images

Republican hopes that their tax plan would be perceived as a boon for the American middle class and perhaps win support from Capitol Hill Democrats ran smack into the reality of resistance politics on Thursday.

“Trump Tax Plan Benefits Wealthy, Including Trump,” declared the New York Times.

“$5 Trillion question for Trump tax plan: How to pay for it,” CNBC declared.

“Trump’s tax plan poised to help Trump,” USA Today reported.

“Trump adviser Gary Cohn says tax plan might not help middle class,” New York’s Daily News said.

Democrats immediately dashed any hopes that the tax overhaul would receive bipartisan support.

Senator Bernie Sanders declared the plan “morally repugnant and bad economic policy.”

Senate Minority leader Chuck Schumer slammed the proposal, saying it read like it was masterminded by former Goldman Sachs bankers in the administration. In a speech on the Senate floor, Schumer accused the GOP of having “designed their tax plan to be cheered in country clubs and corporate board rooms.”

“Has the president read his plan? Has he been involved in creating this plan? Or is it the people around him, many of them from Wall Street who came up with this plan, and the president doesn’t even know what it does?” Schumer asked.

That last point is likely to sting because it is true. The White House early on declared that its tax reform efforts would be led by former Goldman executives Steve Mnuchin, now Treasury Secretary, and Gary Cohn, now director of the National Economic Council. And as late as Monday, Republican lawmakers worried the president might not sign off on the plan.

Republicans are worried that President Donald Trump’s support for the plan could be weak and transient, Axios reports. Trump wanted to propose an even lower corporate rate, believing that it would put the GOP in a stronger negotiating position, according to Axios. He also worried that raising the bottom rate to 12 percent from 10 percent could be perceived as raising taxes on those in the lower income brackets. And now they are worried that Trump could turn against the plan.

“If Trump shows the fickleness he showed on repeal-and-replace (championing the House plan, then later calling it ‘mean’), that could increase the chances the plan sinks, with him blaming Congress,” Axios wrote.

Republican lawmakers see the possibility of the tax proposal failing as an existential threat. If the tax overhaul fails like the Obamacare repeal failed, the Republican Congress will be left with no major accomplishment apart from bailing out insurance companies to sure up Obamacare.

Axios described that as a “nightmare scenario” that would depress Republicans and excite Democrats–a formula for destroying the Republican majorities in the House and Senate.



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