Democrats are sounding highly dubious about working with Republicans on tax reform after President Trump said Thursday he’s interested in a bipartisan approach to one of the top Republican legislative priorities.
In virtual remarks Thursday before the Davos Economic Forum, Trump ceded that he would likely need Democratic votes to pass an extension of his 2017 Tax Cuts and Jobs Act — a bill that no Democrats supported during his first term.
“When we do the renewal of the Trump tax [cuts], we have to get Democrats to approve it. If the Democrats didn’t approve it, I don’t know how they can survive with about a 45 percent tax increase,” Trump said.
Trump and Republicans are facing enormous pressure to extend key provisions of the 2017 tax law, including cuts to individual income tax rates that will expire at the end of the year.
Failing to renew the law and deliver on key Trump campaign promises could kneecap Republican efforts to stave off Democrats in the 2026 midterm elections.
“We were kind of hoping that we could get something done ourselves, but we’ll see. [Trump is] usually pretty accurate. It’s all math right now,” Rep. Mike Kelly (R-Pa.), a member of the tax writing Ways and Means Committee, told The Hill.
Most Democrats are pooh-poohing the notion of any kind of participation in the GOP tax plan, though a few key Democrats have signalled openness amid tensions within the Republican conference on taxes and their tiny majority in the House.
House Minority Leader Hakeem Jeffries (N.Y.) told reporters Thursday no formal line of negotiations on taxes has been opened yet between Democrats and Republicans.
Rep. Maxine Waters (Calif.), top Democrat on the House Financial Service Committee, told The Hill on Thursday there’s no chance Democrats would be willing to work with Republicans on tax cuts given the GOP’s plan to slash federal safety net programs.
“None. Absolutely none. Listen, we can’t have an administration that’s willing to cut, cut, cut the most vulnerable people in our society and then tell us to support them on tax cuts. Hell no,” she said.
Rep. Adam Smith (D-Wash.) also thought bipartisanship on taxes was far-fetched.
“My first instinct was to laugh and say, ‘Good luck with that,’” he said. “To blatantly eliminate huge swaths of revenue in our current fiscal situation is something I certainly am not supportive of.”
Current efforts to change the tax code center on an extension of many of those cuts, which expire at the end of this year, as written into the 2017 law.
Some Democrats suggested that Trump’s Thursday overture may have been a miscalculation.
“My sense is that this is going to be a similar mistake that he made in 2017 where the tax bill was very unpopular,” Rep. Ro Khanna (D-Calif.) told The Hill. “The Democrats should stay united to stand up for working and middle class Americans.”
Rep. Stephen Lynch (D-Mass.) said any efforts to recruit Democrats to the GOP tax agenda would likely constitute “overreach.”
“They will overreach, I think, on that. They’re asking for something that’s highly unpopular with the general public. … I could see them having problems with all the Democrats. So that puts this at risk,” he said.
Lynch noted the leverage that the requirement for Republicans to raise the debt ceiling gives to Democrats.
“There are some of my Republican colleagues who have never, ever voted to raise or suspend the debt limit. They’re trying to package something that would include that, I believe, and I think that will create problems. This ‘one big bill’ idea — I don’t think it’s going to fly,” he said.
“We’re pretty unified in our caucus that we’ll be able to at least spike that idea of one big bill,” Lynch added.
Top Democratic tax writer Rep. Richard Neal (Mass.) told The Hill he’s been expecting Republicans to reach out and anticipating remarks like those made by Trump on Thursday.
“I’ve known that for weeks. He hasn’t said it publicly, but all you have to look at is the arithmetic. There’s no chance that they can raise the debt ceiling on their own, although it’s their responsibility as the majority party.”
Neal said he was open to hearing what Republicans might have to say.
“Let’s hear what they’ve got to say,” he said.
Republicans have been planning to use the budget reconciliation procedure to pass their legislative agenda without needing Democratic support. Reconciliation measures can pass the Senate with a simple majority, averting the prospect of a Democratic filibuster and the need to make concessions to the other side.
The question has been whether Republicans want to move on a single reconciliation bill, as has been favored by Trump, or split the tax package off into a separate piece of legislation, a move favored by Senate leadership.
Due to the more stringent rules on reconciliation and Republicans’ wafer-thin majority, doubts have swirled about their ability to pull off two reconciliation bills in a single year.
“I thought that’s what they were going to use reconciliation for,” Rep. Brad Sherman (D-Calif.) told The Hill, when asked about Trump’s overture to Democrats.
“I have a lot of tax reform ideas,” he said. “They are different from Jeff Bezos’s ideas. They are very different from Elon Musk’s ideas. Obviously, there’s some middle class cuts that were in his original package, and we’ve got to get SALT back. So Democrats have ideas.”
Rep. Sam Liccardo (D-Calif.), who represents parts of Silicon Valley, touted “the deductibility of research and development expenditures, which is so critically important for our innovation economy.”
Kelly mentioned that disagreements about the state and local tax cap were “one of the things” presenting issues for Republicans.
“The president is probably not unrealistic that we have to appeal to a broad audience that benefits from this,” Rep. Darrell Issa (R-Calif.) told The Hill.
“I would hope that we would reach out to [Democrats]. How he plans to reach out and what we can do to be helpful, it remains to be seen.”
