President Donald Trump attempted to put a stake in the heart of the idea of capping the amount individuals can place in tax-deferred retirement accounts via tweet Monday.
The President wasn’t alone in attacking the idea — 401(k) plans are extremely popular, and also considered pretty important for a country that is already dealing with a savings problem.
But the idea was based solely on one thing: raising revenue in the short-term to help finance the deep tax cuts the plan envisions.
So was it in the final proposal? Sources say it wasn’t. But it was on the table as an option — one of many as House Republicans attempt to make the numbers works.
Here’s the rub: To make the numbers work, popular things will have to go away or be pared back. Changing something that’s popular is hard. It becomes significantly more difficult when the President attacks those things with no warning and before lawmakers have made up their minds.
Making things more complicated, Trump is once again openly targeting members of his own party in the Senate, a chamber in which GOP leaders can only afford to lose two votes in order to their plan.
“Bob Corker, who helped President O give us the bad Iran Deal & couldn’t get elected dog catcher in Tennessee, is now fighting Tax Cuts,” Trump wrote in a series of two consecutive tweets. “…Corker dropped out of the race in (Tennessee) when I refused to endorse him, and now is only negative on anything Trump. Look at his record!”
Corker, later asked by CNN’s Manu Raju if he should have backed Trump’s presidential campaign, said he “would not do that again.” He also said Trump has “great difficulty with the truth.”
For some perspective, Trump has a meeting with Senate Republicans — including Corker — midday Tuesday.
And on that note, welcome to tax reform.
The optimism exists
As the President heads to Capitol Hill on Tuesday to meet with Senate Republicans, it’s worth pointing out that both aides and lawmakers in both chambers are becoming cautiously optimistic something can happen.
Or at least more optimistic than they have been at any point in the process (which is a fairly low bar).
Last week’s House-Senate budget agreement, which will be tested in the House vote Thursday, really stunned a lot of Republican who watched the same groups who for years have sunk, sabotaged, short-circuited legislative efforts deemed not conservative enough agree to, well, a Senate proposal that was far from conservative enough — all because they wanted to move forward on tax reform.
The driving force behind optimism
Political necessity. In private briefing after private briefing with political advisers, according to sources in both chambers, the same point has been hammered home to lawmakers that last five weeks: You go into 2018 without tax reform, there will be a Democratic wave. Republican leaders in both chambers hope this becomes the prevailing them of the next nine weeks. That point was also the President’s point during his Sunday afternoon conference call with House Republicans — not the policy, not the in-the-weeds details, bu ut political survival. If that trumps all (as it appeared to do in the budget agreement last week), then this thing can really move.
So is it sustainable?
Well, see the 401(k) issue. This is about to get a lot harder.
The tax overhaul bill text will include dozens, if not hundreds, of 401(k)-like provisions and issues: things that are popular, both on the policy and political side — and/or have large and powerful constituencies of support, that will now be on the chopping block.
Speed is of the essence. The tight timeline to get this done, while it seems aspirational, is deliberate, according to senior aides in both chambers.
“You can’t let a tax overhaul bill hang out in the public for too long or it will get destroyed by special interests,” one outside adviser working to support the bill said.
Very real concern
Whether the President was saving House Republicans from a bad political move, or killing something that needed to be killed, or whatever, several senior aides made the same point to me Monday: that tweet was a really bad omen.
As mentioned above, there are dozens of these types of issues that are about to come to the forefront.
As one GOP aide put it bluntly: “What happens when some special interest gets booked on Fox and Friends and nukes one of those provisions? Does the President tweet it off the table, even if it’s key to the plan?”
This has been a concern for months among the lawmakers and aides who know how painful the tradeoffs are going to be the make this happen.
But Monday morning offered evidence that the worries aren’t just theoretical.
And it’s not just policy Trump is criticizing: The President’s tweet Tuesday morning targeting Corker, who has repeatedly vowed to not support tax reform that adds to the deficit after factoring in economic growth projections, threatens to stall or derail the process.
Corker responded to Trump’s tweet also on Twitter, writing, “Same untruths from an utterly untruthful president. #AlertTheDaycareStaff” citing a previous insult Corker had lobbed against the President, the last time they publicly fought.
Key meetings Tuesday
– Trump to Capitol Hill at 1 p.m. ET. (Vice President Mike Pence will also be on the Hill for separate meetings)
– House Republicans will meet behind closed doors at 4 p.m. for a briefing on taxes.
Republicans’ tentative, best case, timeline for taxes
– House passes Senate budget Thursday
– House Ways and Means Committee releases its bill text
– House Committee marks up bill the week of November 6
– House floor vote the week of November 13
– Senate Finance Committee markup the week of November 13
– Senate floor consideration early December
– Reconcile the bills by Christmas
Voila, your tax overhaul!***
*** Key caveat: there’s a reason this hasn’t been done in 31 years. Timelines were created to slip (see health care debate). If Republicans stay on track, finishing something up early next year is considered more likely by senior Republicans.
