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Many Republicans Hate A Plan They Will Probably Vote For Just Because They Want To Get Taxes Done

"I don’t want this bill to be destroyed in pursuit of perfection," one Republican said.

Posted on November 29, 2017, at 3:29 p.m. ET

Joshua Roberts / Reuters

Several Republican senators and conservative activists are fighting back against a proposal put forward by Republican Sen. Bob Corker that would "trigger" a raise in taxes if the Senate's tax bill is unable to generate the revenue expected of it.

But even as they attacked the specific proposal, the senators said that it's more important that some tax bill pass. And Corker's vote could prove pivotal.

The trigger proposal has not been publicly unveiled yet, but Corker said it would be on Thursday and that he had gotten an agreement from Senate Majority Leader Mitch McConnell that a version of the trigger would be in the final bill due to be voted on as soon as this week. McConnell said the Senate would vote to start debate on the tax bill later Wednesday.

Corker has said repeatedly that he's concerned about the impact the tax bill, which includes a 15 percentage point decrease in corporate tax rate from 35% to 20%, would have on the deficit. The Congressional Budget Office projected that the bill would expand the federal debt by $1.4 trillion over ten years. Even the relatively optimistic estimate from the Tax Foundation, a right-leaning tax research group, projected the bill would increase federal debt by $516 billion over ten years, which includes the effects from higher economic growth increasing tax revenue and cutting spending.

Some Republican senators argue a trigger would be unnecessary, because they believe the changes in the corporate tax rates would drive so much investment that new economic growth might mean that the bill would increase the debt less than projected.

"I think the suggestion of a trigger is well intentioned, in that they’re worried about whether the estimates for growth will be met, and if you don’t, you could have revenues to offset it," Sen. Thom Tillis said. "I don’t think it’s necessary."

"I’m not concerned about the growth," Sen. David Perdue said.

Other Republicans and supporters of the bill are more concerned over what impact including a trigger could have on corporate investment.

Scott Greenberg, an analyst at the Tax Foundation, said there was worry that "the trigger provision would become a self-fulfilling prophesy, as it would undermine the incentive to invest, reducing the effects of the initial corporate cut, and making it more likely that the trigger would occur."

The corporate tax reductions in the Senate bill, unlike the individual ones, are permanent and would not expire at the end of 2025, unlike many of the changes in the tax code for individuals. The theory is that if corporations have certainty about their tax rate before making big decisions about investing, hiring, or wage increases, they are more likely to spend and invest more.

"I do not support triggers, it takes away the certainty we’ve put in that bill," Sen. Dean Heller said.

"Anything you do to put a question in people’s minds, I think doesn’t give the economy all the opportunity it can to get out of this," Sen. Roy Blunt said, referring to the trigger proposal.

Another common criticism of the trigger is that it would likely kick in as the economy was entering a recession, when tax revenues fall because the income of businesses and individual falls, while government spending on programs like unemployment goes up.

"We think it’s a bad idea, the last thing you want to do in an economic downturn is raise taxes," said Tim Phillips, the president of the conservative activist group Americans for Prosperity, which has been a strong advocate of the Republican tax proposal.

Economists across the political spectrum shared the worry that a trigger would only deepen an economic downturn. "This provision would be triggered at exactly the wrong time," Martin Sullivan, a former staffer for the Joint Economic Committee who is the chief economist at Tax Notes, a specialty tax publication. "That would be the time you want a tax cut, we would have hard-wired into the system destabilizing policy."

Sullivan did say, however, that the proposal has its merits because it would build more fiscal discipline into the tax proposal.

But despite the criticism, Republican senators and conservative activists remained united that the tax bill didn't need to be perfect in order to get their support.

"They’re looking to get to yes, it's the most unified effort I’ve seen in many years," Phillips said.

"I don’t want this bill to be destroyed in pursuit of perfection," Perdue said. "I’m optimistic we’ll find common ground."

When asked if a trigger would ultimately affect his vote on the tax bill, Tillis said: "Not at all, we've got to produce an outcome."

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