WASHINGTON -- A day after House and Senate Republican leaders said they had reached agreement on a merged version of their tax bill, they continued looking for ways to pay for the tax overhaul and faced a Republican senator's threats to oppose it.
Republicans plan to unveil a final bill today, with the aim of voting on the legislation early next week and delivering it to President Donald Trump for signing before Christmas.
But many of the changes made to assuage the concerns of businesses and Republican lawmakers are expected to drive up the reduction of revenue in the bill and will need to be paid for to ensure the legislation does not add more than $1.5 trillion to the deficit over a decade.
On Thursday, Sen. Marco Rubio, R-Fla., indicated he would vote no on the bill unless the expanded version of the child tax credit that he and another senator, Mike Lee, R-Utah, have been pushing was included. That change, which would allow families to claim the child tax credit even if they owe no income taxes, would drive up the cost of the bill even more.
"I think my requests have been pretty reasonable and consistent and direct. Right now the refundability level is $1,100. It needs to be higher," Rubio said. "It's a pretty straightforward ask. If the refundable portion of the child credit is substantially increased beyond the $1,100 it currently is, I'll vote for the bill. If it's not, I won't."
At the White House, Trump said he was confident that Rubio will get onboard.
"He's really been a great guy and very supportive. I think that Sen. Rubio will be there," said Trump, who belittled Rubio during the Republican presidential primaries, calling him "little Marco."
In an online town hall-style meeting Wednesday night, Lee told constituents that negotiations were ongoing to include such an expansion in the conference tax bill.
Among the potential ideas being discussed on Capitol Hill to pay for the bill is allowing the tax cuts for individuals to expire even sooner than the 2025 date already stipulated in the Senate bill. Another idea under consideration, according to Sen. Thom Tillis, R-N.C., is raising the tax rate on profits that companies have parked overseas.
"We're literally trying to squeeze about $2 trillion in tax reform into a $1.5 trillion box, and that's been a problem," Sen. Ron Johnson, R-Wis., who held out on supporting the initial version of the Senate tax bill until it gave more generous tax breaks to "pass-through" businesses.
In an early-morning cheer on Twitter, Trump encouraged Republicans to get the job done.
"Republican Tax Cuts are looking very good. All are working hard. In the meantime, the Stock Market hit another record high!" he wrote.
House and Senate Republicans agreed in principle Wednesday to the framework of a consensus bill. Late changes included a slightly higher corporate tax rate of 21 percent rather than the 20 percent in the legislation that passed both chambers, and a lower top individual tax rate of 37 percent for the wealthiest Americans, who currently pay 39.6 percent. But the bill will still scale back some popular tax breaks, including the state and local tax deduction and the deductibility of mortgage interest.
Breaking from the House bill, the agreement would allow taxpayers to continue to deduct high out-of-pocket medical expenses, and it would retain a provision allowing graduate students who receive tuition waivers to avoid paying taxes on that benefit.
Also included is both the Senate's repeal of the health care law requirement that most Americans have health insurance or pay a penalty and a provision that opens the Arctic National Wildlife Refuge in Alaska to energy exploration.
2 FRAIL REPUBLICANS
Other concerns about the bill are looming, including the health of two Republican senators, 81-year-old John McCain of Arizona and 80-year-old Thad Cochran of Mississippi. Republicans, who hold a narrow 52-48 majority, can only afford to lose two Senate votes, and Sen. Bob Corker of Tennessee has already expressed his opposition to the bill.
McCain is at a Washington-area military hospital being treated for the side effects of brain cancer treatment. Cochran had a nonmelanoma lesion removed from his nose earlier this week.
Both men missed all Senate votes this week, but their presence will be crucial early next week as the GOP tries to pass the tax bill.
"My expectation is he'll be here," Sen. John Cornyn, R-Texas, said of McCain. "He's resting up, and so we hope to see him then."
A Senate Armed Services Committee hearing opened Thursday without McCain in the chairman's seat, and members of the panel were unsure when he'd return to Congress.
Cochran was away from Washington for several weeks this fall recovering from a urinary tract infection. When he returned in October, he appeared frail.
His absence this week is unrelated to his prior illness, according to his office. The outpatient procedure on his nose "ended up being more extensive than what the physician or the senator expected," a spokesman said.
McCain's closest friend on Capitol Hill, Sen. Lindsey Graham, R-S.C., told reporters that he spoke with McCain's wife, Cindy, earlier in the week and was optimistic McCain would be back to work soon. Graham dismissed the idea McCain should rush his recovery to vote on the GOP tax bill even though the margin for Senate passage is expected to be slim.
"John, take a little time, rest up. It's OK to take a day or two off," Graham said.
Vice President Mike Pence decided Thursday to delay a trip to the Middle East that he was planning to take next week so that he can preside over the tax vote in the event he needs to break a tie between Republicans and Democrats in the Senate.
Democrats, all of whom oppose the bill, have been largely sidelined in the final stages of the tax discussions.
A $12 billion tax-equity tool that U.S. wind and solar developers depend on to finance projects appears likely to remain largely intact as part of the tax overhaul.
A tentative compromise would preserve most, but likely not all, of the value of renewable energy tax credits that developers sell to JPMorgan Chase & Co., Bank of America Corp. and other large financial institutions, said Sen. John Thune, R-S.D., the chamber's No. 3 Republican.
Those credits are threatened by a provision in the Senate bill that would impose a minimum tax on foreign transactions, reducing the need for companies to buy credits.
Selling tax credits is a critical funding source for clean energy. The two biggest U.S. solar companies, First Solar Inc. and SunPower Corp., are counting on closing such deals by the end of the year to finance projects, said Jeffrey Osborne, an analyst at Cowen & Co. If left unchanged in the bill, the minimum tax on foreign transactions -- called the Base Erosion Anti-Abuse Tax -- would make that harder.
"It's a fix that I think everybody in the end can live with and will allow the credits that have been used to finance these projects to continue to be used to finance these projects," said Thune, one of the negotiators hammering out the differences between the House and Senate bills, in regard to the compromise. "We were going to make sure the wind industry, for example, wasn't adversely impacted."
Shares of SunPower, which Osborne expects has the most to gain from clarity over the tax provision, rose 4.7 percent to $8.99 at the close in New York.
"The uncertainty over the past few weeks has delayed financial close of many projects," Osborne said in an interview. "Now that there's certainty evolving, we expect a flurry of activity into year end."
The tax bill contains a host of tax changes that are expected to increase revenue reduction in the bill that passed the Senate. Those include repealing the corporate alternative minimum tax and increasing the income threshold at which the individual alternative minimum tax kicks in.
While the late changes to the tax bill were meant to alleviate concerns of skeptical Republicans, it was not clear how they would be paid for while still complying with the strict Senate budget rules that will allow the bill to pass without votes from any Democrats. Republicans can add no more than $1.5 trillion to the deficit if they are to pass the bill along party lines.
The tax package is polling badly among the public, but Republicans say that will turn around after Americans see the benefits.
"The results are going to be what sells this bill, not the confusion before it passes," said House Speaker Paul Ryan, R-Wis.
On Thursday, Republican leaders continued to express confidence that they were getting close to passing the measure.
"I think there's going to be strong support in the House and Senate on this or we wouldn't be moving forward," Rep. Kevin Brady, R-Texas, the chairman of the House Ways and Means Committee, said on CNN.
Brady has scheduled a signing of the signature sheets for the conference report -- which is the deal that's been struck between the House and Senate lawmakers on the congressional conference committee -- between 9 and 11 a.m. today. A majority of the House and Senate lawmakers who are on the conference committee have to sign affirmatively for the bill to move forward.
Information for this article was contributed by Alan Rappeport and Thomas Kaplan of The New York Times; by Stephen Ohlemacher, Marcy Gordon, Kevin Freking, Ken Thomas, Richard Lardner, Andrew Taylor and Matthew Daly of The Associated Press; and by Ari Natter and Christopher Martin of Bloomberg News.
U.S. Sen. John McCain, R-Ariz., right, listens as Republican Senator Thad Cochran responds to a reporter's question at a Cochran for Senate rally at the Mississippi War Memorial in Jackson, Miss., Monday, June 23, 2014.
A Section on 12/15/2017
Print Headline: GOP seeks out tax-cut offsets as Rubio balks