Senate Republicans are determined to smooth over the final points of disagreement on their far-reaching tax plan ahead of a quickly approaching vote, with some senators now arguing that the biggest policy dispute won't even matter because of how much growth they expect the bill to create.
Republicans on Thursday said they're OK with some kind of automatic tax increase if their tax bill produces large deficits, because they think it won't ever happen, thanks to the economic growth that will be unleashed by the corporate tax cuts as well as the deregulatory bonanza launched by the Trump administration.
"Growth is beginning to pick up," Senate Majority Leader Mitch McConnell said Thursday morning, attributing some of that to the "recognition of the great deregulatory actions," done so far.
After getting all 52 Republican senators to vote yes Wednesday night to start debate on the bill, the number of undecideds started to dwindle. Both Sens. Lisa Murkowski and John McCain said they would vote for the bill's final passage, leaving only a few senators, like Sens. Bob Corker and Jeff Flake undecided.
With a full floor vote likely looming Thursday night or early Friday morning on the bill, Republican senators are still working out exactly what a tax-hike "trigger" would look like, a backstop that would automatically raise taxes if the bill was unable to produce enough economic growth to make up for the revenue loss from lower tax rates.
Corker said earlier this week that he had an agreement with McConnell that a trigger would be included in the bill, which allowed him to vote the bill out of the Senate Budget Committee.
The trigger proposal could still wind up being the victim of the Senate parliamentarian, who could rule that the mechanism to raise corporate taxes automatically may not be compliant with the process Republicans are using to try to push the bill through with only 51 votes.
"There are some questions for the parliamentarian — the details haven’t been quite finalized yet," Senate Majority Whip John Cornyn told reporters Thursday.
Sen. John Thune, citing the parliamentarian, called the trigger "a work in progress."
Sen. Mike Rounds suggested the proposal isn't quite there yet, and could still fall out of the bill entirely. "Right now, I don't think it's there," he told reporters.
While some Republicans, like Sens. Roy Blunt and David Perdue, criticized the trigger earlier this week as introducing uncertainty to corporations about what their future tax rates would be, both said Thursday the trigger would likely be unnecessary, and therefore isn't something worth worrying about.
Perdue said the trigger likely won't go into effect: "I think we’re going to be getting the growth that we’re estimating."
"There's great confidence on our side that the expectations of growth in the tax bill are well below what growth will actually be produced," he added. "If we have to pass a trigger to assure some of our members that aren’t quite as confident as that, I think that’s something we could deal with."
Congress's own tax-estimating body, the Joint Committee on Taxation, has not released an estimate of how much the Senate tax plan would increase deficits, counting new revenues that would come from higher economic growth and corporate incomes. The Congressional Budget Office estimated that the Senate tax plan would increase deficits $1.4 trillion over 10 years. The Treasury Department has also failed to produce an analysis of the bill's effects on growth and deficits, and the New York Times reported that one would not be forthcoming.
"We’ve had two straight quarters of 3.0% growth and there's projected 3.0% growth," Sen. John Cassidy said.
Despite three massive hurricanes, the US economy grew at a 3.3% annual clip in the third quarter of this year, following a report of 3.1% annual growth in the second quarter. That makes for the fastest two quarters of economic growth since 2014, bolstering Republican claims that scorekeepers are too pessimistic about the potential of the US economy.
But even the most tax-cut-friendly analysts still project that the tax plan will induce deficits over the next 10 years. The Tax Foundation, a center-right tax analysis group, found the bill would increase federal debt by $516 billion over 10 years.
Blunt, however, pointed to a letter published in the Wall Street Journal by nine economists claiming that the tax plan could boost annual GDP growth to between 3% and 4%. This letter was harshly criticized by liberal economists. It also does not include a specific calculation of how the tax bill will affect the growth of the federal debt, although the economists did predict that the growth in the debt was "likely to be modest."
"The bill is going to work — I don’t feel like we need a trigger," Sen. John Kennedy said Thursday.
On Thursday afternoon, however, just what the trigger would look like was unclear, even if several Republicans were confident it would never have to go into effect.
"We're working on it," Cornyn told reporters.
"We got a lot of things going on, I don’t want to state where we are or what we’re doing," Corker said.