Senate Republicans may be warming to Congress’s $78 billion tax bill

Fissures are forming among Republicans on the Senate Finance Committee over the House-passed $78 billion tax bill, with some looking to pass the legislation as-is while others demand concessions that risk sinking it.

Sen. Mike Crapo, R-Idaho., the panel’s ranking member, remains dug-in against the legislation over one of its reforms to the Child Tax Credit. Known as the “lookback provision,” the change would allow families to claim a larger benefit using their previous year’s earnings in certain cases, such as if a parent lost their job. Some Republicans have argued the measure could be a disincentive to work.

But other GOP committee members appear to be dropping their early skepticism of the legislation, which pairs several key business tax deductions with upgrades to the child credit. “I want to get a bill passed,” Montana Sen. Steve Daines, who also chairs the National Republican Senatorial Committee, told Semafor. “It’s very important for global competitiveness and provisions [are] in there for jobs and economic growth.”

Sen. Todd Young, another Finance Committee member, also told Semafor he’s eager to reauthorize the business tax provisions included in the bill and that in recent weeks he’s talked with other Republican Senators who were “warm to the package.”

Democrats are looking to attach the package to one of the short-term funding bills that Congress must pass to avoid a shutdown in March, as tax filing season ramps up. But their hopes for speedy passage have run into resistance from some key Senate Republicans who want an opportunity to tweak the bill in a formal markup.

“We need to break a very bad habit, which is we don’t go through committees anymore,” Sen. John Cornyn, R-Tx. told Semafor. “I think we need to go through the committee and let everybody participate in the process.”

The bill’s supporters are pushing back on that demand. Young told Semafor he’s “less concerned about having a perfect process and more concerned about getting this thing done.”

Senate Finance Chair Ron Wyden, who negotiated the legislation with House tax writers, flashed some uncharacteristic frustration with requests for a markup, saying he believes there’s still no guarantee the current holdouts will vote for it. “It’s time to get to yes,” he told Semafor.

One major concern among the bill’s supporters is that any changes to the text could effectively kill the legislation, since it would have to pass back through the turbulent House in regular order.

When asked by Semafor whether there were specific changes he wants that could secure his vote, Cornyn responded that his main demand is simply pushing the tax bill through the Senate Finance Committee. He also acknowledged that the tax bill may not pass the House a second time. “I was pretty impressed they passed it the first time but I don’t know whether they could pass it again,” Cornyn said.

Backing from high-profile legislators like Young and Daines is obviously a positive sign for the bill, as is the fact that a handful of Republicans outside the Finance committee are speaking supportively about the legislation. But in the end, the key vote here is probably Crapo. I’ve heard from lobbyists who believe that Republicans will support the legislation in droves if he finally gives it the green light. But until that happens, I wouldn’t expect a huge groundswell of GOP support for the deal.

Americans for Tax Reform President Grover Norquist, who has vocally backed the package, is feeling more optimistic about its chances. “I think this will be wrapped up in the next week,” he told Semafor on Tuesday.

Norquist also suggested that the legislation may enjoy some tacit support in Trump world. The former president has not weighed in on the legislation, which would extend some pieces of the tax law he signed in 2017. But Norquist says he’s had positive conversations about the bill with people in Trump’s campaign and his orbit. 

“I’ll tell you what I said. I said this is a huge win,” Norquist told Semafor. “This is the Democrats in the House and the Senate voting to extend your tax bill, which they said only helped rich people. And they have to vote for this because their own local districts want these things extended.”

“That is a huge, huge win. And everybody I’ve spoken to understands the truth of that,” Norquist said.

Jordan Weissmann contributed reporting.