Sen. Cornyn Calls for Finance Hearing on Border Tax

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By Kaustuv Basu

The Senate Finance Committee needs to hold a hearing to discuss an import tax that is part of the House Republican tax overhaul plan, Senate Majority Whip John Cornyn (R-Texas) said.

Cornyn, who hasn’t made up his mind about the border adjustability proposals, said he had talked to committee Chairman Orrin G. Hatch (R-Utah) about a hearing. “The point is I don’t want the House to get a bunch of momentum behind something that isn’t going to fly in the Senate,” he said. A hearing would be an opportunity to discuss, “deconflict” and highlight areas of disagreement in the tax blueprint, he said. “I want to know more about it.”

Cornyn’s pointed comments and the suggestion of a hearing add to growing concerns among some lawmakers and the business community. The import tax that is part of a concept called border adjustability has roiled the corporate community in the U.S., with companies taking sides on the proposal. Under the plan, companies could end up paying a 20 percent tax on imports.

But House Ways and Means Chairman Kevin Brady (R-Texas) and Speaker Paul D. Ryan (R-Wis.) stand firmly behind the idea. Ryan’s press office sent out a news release Jan. 31 about the urgent need for a tax overhaul with the headline: “Momentum Builds for Republican Tax Plan.” Border adjustability is one of the main revenue-raisers in the House Republican tax plan, raising as much as $1.2 trillion over 10 years, according to the Tax Policy Center.

Price Adjustability

Cornyn, a senior Senate Republican leader and Finance Committee member, said oil industry representatives have told him that the price of gas could rise because of the import tax. He said he wanted to make sure that the Texas economy isn’t affected by the plan.

The American Petroleum Institute has expressed concerns about border taxes, said Jack Gerard, the group’s president. “We’re continuing to do an analysis and we’ll be working with the leaders on the Hill once we figure out its broader implication,” Gerard said, according to a Jan. 31 Bloomberg report.

Bloomberg also reported that Scotts Miracle-Gro Co., the world’s largest supplier of lawn and garden products, came out against the import tax on Jan. 31.

Asked about the timing of a hearing in the Finance Committee, Cornyn said, “I’m available tomorrow.”

Cornyn said there had been a meeting to discuss the border tax with Gary Cohn, the incoming head of the National Economic Council. Cornyn said he got mixed signals from the Trump administration on the border tax issue.

More Debate?

There have been no announcements about a hearing to discuss the issue in the Ways and Means Committee, although some panel members, including Rep. James B. Renacci (R-Ohio), have been asking for one. The Washington Examiner reported Jan. 30 that House Republicans could call the country’s top chief executive officers to Capitol Hill to testify about the tax overhaul proposal.

Renacci said the issues deserve more public debate.

“I think it’s important that everybody understand these issues and make informed decisions,” he told Bloomberg BNA. “It doesn’t mean we’ll get to the same place, but I think hearings would be important.”

A Republican lobbyist previously told Bloomberg BNA that even though some Ways and Means Republicans are publicly supporting Brady, they have reservations about voting for a bill that might not be popular in their districts and could be stopped by the Senate.

With assistance from Aaron E. Lorenzo in Washington.

To contact the reporter on this story: Kaustuv Basu in Washington at

To contact the editor responsible for this story: Meg Shreve at

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