Progressives Prepare to Stop Tax Cuts Amid GOP Infighting

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By Laura Davison

Progressive groups and lawmakers don’t have room to shape tax policy in Congress this year.

Instead, they’re preparing to stop a bill, or at least minimize the tax cuts they find most damaging in a bill—an opportunity that has presented itself as Republicans fail to coalesce around a single tax plan.

“We have very small hopes that any of our ideas can make it in there, and none of our genuine priorities,” Josh Bivens, research director at the left-leaning Economic Policy Institute, told Bloomberg BNA. “In reality, what we are thinking about is how to prevent a net tax cut for the rich and for corporations.”

The Democratic fight against a GOP tax bill is gearing up this fall after health care legislation stalled and Republicans continue to insist that President Donald Trump will sign a tax bill this year. The GOP hasn’t nailed down the specifics of their legislation, but liberal groups are planning to message against any provisions that would lower taxes for corporations and high-income individuals.

Senate Republicans have only a two-seat majority, and some GOP House members in districts where Trump is unpopular are growing nervous about re-election. While Republicans technically have enough votes to pass a bill without Democrats, left-leaning groups see an opportunity to put pressure on members who could face a political backlash for supporting a bill with proposed tax changes the groups say would benefit the wealthy at the expense of the middle class.

Health Care 2.0

“We really see this as a continuation of the health care fight,” T.J. Helmstetter, communications director for Americans for Tax Fairness, said. “We are reaching out to the players who were critical to preventing the AHCA from passing,” he said, referring to the GOP’s American Health Care Act (H.R. 1628) that underwent several revisions before dying on the Senate floor in late July.

That bill failed after three Republicans—Sens. Susan Collins (Maine), John McCain (Ariz.), and Lisa Murkowski (Alaska)—defected from the ranks. Americans for Tax Fairness hopes this group, or others, could do the same on a tax bill. Americans for Tax Fairness members include a wide range of left-leaning organizations, including the AFL-CIO, MoveOn.org, and the Center for American Progress.

The Not One Penny coalition, formed in August to oppose tax reform that benefits “millionaires, billionaires and wealthy corporations,” made a seven-figure ad buy targeting Republicans running for reelection in politically vulnerable districts, such as Reps. Will Hurd (Texas), Martha McSally (Arizona), and Kevin Yoder (Kansas). The first round of ads ran the last week in August and Not One Penny is considering similar campaigns in the future.

The group is a response to groups with ties to or that are funded by the billionaire Koch Brothers, such as Americans for Prosperity or Freedom Partners.

“We are not going to outspend the Koch brothers,” a Not One Penny campaign spokesperson told Bloomberg BNA. “We, however, have millions of people where they have millions of dollars.”

Not One Penny and Americans for Tax Fairness, which share many of the same members, say that public opinion is on their side. People really don’t like the idea of tax cuts, Bivens said. Sixty percent of respondents to an April Pew Research poll said they are bothered “a lot” by the feeling that wealthy people don’t pay their fair share, and 62 percent are bothered “a lot” by the share of taxes corporations are paying.

Minority Stake

Democrats see their job as holding Trump accountable when he talks about working-class and middle-class families, a Democratic aide said. The minority is hoping to use scores from the Joint Committee on Taxation or the Congressional Budget Office to show that any bill won’t provide much benefit to the lower half of the income ladder. That proved to be an effective messaging tactic during the health care debate when a series of CBO scores showed millions of people would lose coverage under the GOP bill, the aide said.

Trump called Democrats “obstructionists” in an Aug. 30 speech for not voting for the health bill and not supporting the tax overhaul push. After the speech, top Ways and Means Committee Democrat Rep. Richard E. Neal (Mass.) said in a statement that Democrats are ready to work with Republicans on a bill that provides “tax relief and expands opportunities for middle-class families, closes the skills gap, and promotes middle-class job growth.” cq

Forty-five Senate Democrats struck a similar tone in an August letter that said they would support a tax bill under three conditions. First, the tax burden can’t be increased on the middle class. Second, an overhaul should go through regular legislative order, not the “reconciliation” process Republicans are planning to use, which allows them to bypass the 60-vote threshold. Third, the legislation shouldn’t add to the deficit, because higher deficits would endanger “critical programs” such as Medicare, Medicaid, and Social Security, according to the letter.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said in an Aug. 16 speech that, “whether you’re a Democrat or a Republican, if you’re serious about getting real pro-growth tax reform done for the American people this year, we are serious about working with you.”

Cooperation Unlikely

Most progressive groups agree that a tax bill that loses revenue isn’t tax reform. Those on the left want to see a bill that is at least revenue neutral, if not increasing the amount of tax dollars raised. Republicans are divided over whether a bill should add to the deficit, though those pushing for revenue neutrality want it to be “scored” dynamically so it accounts for macroeconomic factors. That means, the bill will likely lose revenue using traditional scoring measures that many Democrats tend to prefer.

“Republicans and Democrats can’t even agree on the basic goals of tax reform,” said Steve Wamhoff, a senior fellow for federal tax policy at the progressive Institute for Taxation and Economic Policy and former aide to Sen. Bernard Sanders (I-Vt.). “It’s hard to see where the discussions could begin.”

Bipartisan compromise on any issue is unlikely as long as Republicans are still negotiating the main features of the bill within their own party. As those talks continue into the fall, progressives will aim to generate public support against the bill, focusing how tax cuts will endanger popular programs such as Medicare and Social Security in the long run.

“We need to recapture this energy” from the health care fight, Helmstetter said. “This is a tougher fight for progressives, because it requires the additional step of educating the public, But Social Security, Medicaid, and Medicare are far, far, far more popular than any individual member of Congress.”

To contact the reporter on this story: Laura Davison in Washington at lDavison@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

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