Ryan pulls back on tax-deficit promises

Economic growth trumps revenue neutrality as goal of overhaul, he now says

House Speaker Paul Ryan answers questions Wednesday during an interview at The Associated Press bureau in Washington.
House Speaker Paul Ryan answers questions Wednesday during an interview at The Associated Press bureau in Washington.

WASHINGTON -- House Speaker Paul Ryan backed off months of promises that the Republicans' tax plan won't add to the nation's ballooning debt, declaring Wednesday in an Associated Press interview that the most important goal of an overhaul is economic growth.

Asked twice whether he would insist that the emerging tax plan not pile more billions onto the $20 trillion national debt, Ryan passed up the chance to affirm that commitment.

GOP leaders made that "revenue neutral" promise in a campaign manifesto last year and many times since.

"We want pro-growth tax reform that will get the economy going, that will get people back to work, that will give middle-income taxpayers a tax cut and that will put American businesses in a better competitive playing field so that we keep American businesses in America," the Wisconsin Republican told AP reporters and editors. "That is more important than anything else."

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Ryan's comments signaling possible retreat on a core GOP commitment came amid quickening action on taxes, which Republicans view as their best chance to notch a significant accomplishment to take to voters in the 2018 midterm elections.

Yet even as President Donald Trump hunted for Democratic votes for a plan that's not yet taken shape and as GOP leaders laid out an aggressive timetable to lawmakers, significant hurdles remained.

A major one is the GOP's failure, thus far, to pass a federal budget, which under legislative rules is a prerequisite for a tax plan that can avoid being stalled to death by Democrats in the Senate.

Other hurdles involve the contents of the tax blueprint itself, which Ryan and his lieutenants envision as a far-reaching overhaul that would significantly lower rates for corporations and individuals while cleaning up the complicated code.

One problem is that every tax deduction has its own constituency, and Ryan has already ruled out eliminating some of the most popular ones, including deductions for home mortgages and charitable giving.

Objections also threaten from the GOP's deficit hawks if Ryan, Trump and Senate Majority Leader Mitch McConnell do try to move forward with a tax plan that could cost hundreds of billions of dollars, without paying for it with cuts in federal spending.

Sen. Bob Corker, R-Tenn., chairman of the Foreign Relations Committee, issued a statement earlier this week calling the debt the "greatest threat to our nation," greater than North Korea, Russia or the Islamic State militant group.

Trump added to the complications when he declared, at a meeting Wednesday with a bipartisan group of House members, that taxes on the wealthy would not be cut under the GOP plan and might even go up. Although the administration has not provided specifics on its plan, House Republicans have embraced an approach that would lower the top individual rate from 39.6 percent to 33 percent, which would benefit the wealthiest Americans.

Still, Trump declared: "The rich will not be gaining at all with this plan. We are looking for the middle class, and we are looking for jobs -- jobs being the economy."

Trump reiterated that he hoped to lower the top corporate tax rate from 35 percent to 15 percent, something Ryan has already ruled out as impractical.

The president added that the individual rate would be even lower than that.

The long list of difficulties has led some analysts to conclude that Congress is likelier to settle on straightforward tax cuts than on a full-blown overhaul -- if it passes anything at all.

But Ryan rejected that approach, telling the AP, "It's not just narrow cuts in taxes that will do the job."

Referring to tax cuts signed by President George W. Bush, Ryan said: "You can't just do what Bush did in 2001 and 2003. You have to overhaul the system itself to put American businesses and the American economy in a much more competitive situation."

Earlier Wednesday, Ryan and House Ways and Means Chairman Kevin Brady met privately with GOP lawmakers to lay out a timetable on taxes, pledging a detailed blueprint from top congressional Republicans and administration officials in the final week of September. The goal, which Ryan reiterated Wednesday, is to send Trump a bill to sign before year's end.

Brady told his colleagues at the meeting that they needed to unify or the effort to cut taxes could fail, according to two people in the room.

He warned that "the stakes are higher than ever that we deliver this year," the people said.

But the challenges to uniting on a plan were immediately apparent as House Republicans left the meeting complaining that they still didn't know what was going on. And some conservatives voiced concerns about Trump's newfound fondness for making deals with Democrats, as he did last week on the debt ceiling with House Minority Leader Charles Schumer of New York and House Minority Leader Nancy Pelosi of California.

Schumer and Pelosi were invited to the White House for dinner Wednesday night, with no Republicans present except the president, who was once a Democrat.

"The problem here is we don't have a clue what's in the tax plan," said Rep. Dave Brat, R-Va. "Now Trump is talking about doing bipartisan stuff with Chuck and Nancy on taxes. And I don't want to open the door to that until we see what this tax plan looks like."

Information for this article was contributed by Alan Fram, Richard Lardner, Stephen Ohlemacher and Catherine Lucey of The Associated Press; and by Damian Paletta, Kelsey Snell and Mike DeBonis of The Washington Post.

A Section on 09/14/2017

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