The Senate is expected to vote on the Republican tax reform bill later this week. Until they do, Slate political writer Jim Newell and economics writer Jordan Weissmann will assess the bill’s chances of passage in daily Slack chats. This is the second of those chats. Read Monday’s chat here.
Jordan Weissmann: So, am I crazy, or is this thing just going to sail through the Senate?
Jim Newell: It is getting that way? Ron Johnson has been told to shush and keep voting it along, that he’ll get what he wants eventually. That takes care of him and Steve Daines. Susan Collins got several concessions Tuesday and is happy. Murkowski is happy too. Not “aye” happy yet, but getting there. The deficit hawks have a “framework” for their precious trigger idea. This is moving along pretty neatly.
Weissmann: So, I get the concessions to Collins. Trump gets to kill the individual mandate and pass some other health care–related stuff, which will let him spend the next 7 years claiming he repealed and replaced all of Obamacare. And including the property tax carve-out harmonizes the Senate bill with the House’s.
I kiiiiiiiiind of get the concessions to Johnson and Daines. They just want slightly bigger tax cuts for guys who own car dealerships. (Seriously, a lot of rich pass-through business owners are car dealers.) It’s expensive, but they can make room for it by, like, taxing grad students and such.
What I don’t get is the trigger. [Ed. Note: This is a mechanism in the bill that will “trigger” automatic tax hikes in the unimaginable event that its cuts don’t erupt in economic growth.] Grover Norquist hates it. The Chamber of Commerce hates it. Everybody hates it. Why would anybody agree to it?
Newell: Grad students are where the money is, obviously.
Because they need it to satisfy Corker, Lankford, and (maybe) Flake.
Newell: I saw Corker maybe an hour ago. He said he has specifics of the trigger but isn’t ready to share them. OK, OK. I asked him his thoughts on the trigger-haters, saying this makes lower growth a self-fulfilling prophecy. He assured me that that’s one of his top concerns too, and that the bill is structured in a way that would prevent that. I am ... very interested to see this trigger!
There’s another idea floating around today.
Weissmann: Wait wait … Is the idea behind the trigger that it’s just going to hit the individual tax cuts?
Because that’d be ... well, typical.
Newell: I think Ted Cruz was pushing it. It would make it a double-sided trigger. (I hate my life, by the way.) If the bill produces far more revenue than they expect, then it would trigger further tax cuts. That may just be a fantasy, but it could be enough to get the trigger-haters to calm down.
Weissmann: So ... it’s super pro-cyclical. Economy does awesome, tax rates plummet. Economy does crappy, tax rates leap.
Newell: We don’t know what the trigger would target yet! I’d guess it’s on the individual side, because they’re so worried about giving precious businessmen their precious confidence.
Weissmann: I’m just saying, the next Fed chair has their work fucking cut out for them.
Newell: Well, I don't know how they'll structure it. Like, whether they would make the cuts/increases in the worst cyclical moments.
Weissmann: Good luck dealing with the knuckleheads in Congress, Jerome!
Newell: Broader point is: There’s enough political will for them to figure out something that can work for both sides.
I hate being so bullish on the goddamn Republican Senate's ability to pass a party-line bill, but here I am.
Weissmann: OK. I would just like to note, though, that I think it’s impressive how Ted Cruz manages to consistently come up with awful policy compromises in the clutch. He’s like the Mariano Rivera of shitty-but-expedient legislative design.
I also just really dated myself there.
Newell: He comes up with awful policy compromises in the clutch, and then Chuck Grassley agrees and says they’re necessary. (Grassley just said that basically.)
They could always avoid “triggers” and work within the bounds of conventional macroeconomic thinking in devising the size of their corporate tax cut, but what fun would that be.
Weissmann: This whole bill is just turning into a Rube Goldberg device for transferring wealth upward.
So, do you see anything that might trip it up?
Newell: This pro-/anti-trigger thing is the closest policy issue to a deal-killer, but as I said, I think they’ll resolve that. At this point the closest coalition I can see to killing it is a madcap Flake-Collins-McCain one. On the other hand, some bad news could be coming Wednesday. The Joint Committee on Taxation said it might be able to release its dynamic score, which is probably not going to say nearly what the Club for Growth dudes want it to say, by Wednesday night.
Weissmann: That's true.
Newell: I also don’t see it as out of the question, though, that this gets all 52 Republican votes. Probably won’t! But could.
Weissmann: Also, be real. Republicans could not give a hoot what the JCT says at this point. Especially since the dynamic score is for “informational” purposes only. It's like the extra reading your teacher assigned for enrichment purposes.
Newell: Yeah, it will be a useful thing to point to in calling bullshit on the entire conceit of this bill ... after it passes.
Weissmann: Fun fact: The CBO and JCT also produced analyses in 2003 saying that, nope, tax cuts wouldn’t pay for themselves. And look where that got us.
Newell: That was also sort of in the era of “we have to cut taxes because soon there’ll be no more debt to pay off!”
Anyway, I’ll continue the pre-emptive grieving process for my tax refund.