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Democrats Demand Bipartisanship on Tax Reform

Democrats are demanding that the restructuring of the country’s tax code move forward on a bipartisan basis but GOP leaders indicate that they will go it alone.
U.S. Senate Minority Leader Chuck Schumer speaks about the Senate Republican's healthcare bill at the U.S. Capitol on June 27.Saul Loeb / AFP - Getty Images

WASHINGTON — Still stinging from last week's health care defeat in the Senate, congressional Republicans are looking to move forward on another one of their major legislative goals — tax reform. And emboldened Democrats Tuesday made clear their demands that any effort to restructure the nation's tax code be conducted on a bipartisan basis.

“As long as both Donald Trump and our Republican colleagues try to go it alone, they’re going to have a very rough time,” Senate Minority Leader Chuck Schumer said.

All but three of the Senate Democrats sent a letter to Majority Leader Mitch McConnell laying out Democratic conditions for tax reform, including an insistence that Republicans drop plans to advance the legislation through reconciliation — a process that would eliminate the need for Democratic votes.

“There’s a lot to work with here if you want to reject the ‘my way or highway’ politics,” said Sen. Ron Wyden, D-Ore., and ranking member of the Senate Finance Committee.

The demands also include no tax cuts for the nation's top one percent of wage earners and an insistence that any reform not raise the federal debt.

McConnell responded that Republicans will go it alone in order to get their own priorities passed.

“We will need to use reconciliation because we have been informed by the majority of Democrats, in the letter I just received today, that most of the principles that would get the country growing again, they’re not interested in addressing,” McConnell said.

Republican goals for individual tax reform include making the tax code simpler and lowering rates. They also want to reduce corporate taxes, which they say will provide incentives for job creation and investment.

Reconciliation, which requires only a simple majority instead of the usual 60-vote threshold to pass legislation, was also the process used during the recent health care push. It was supposed to make it easier to repeal the Affordable Care Act, but 50 Republicans couldn’t agree on the details.

“Ramming tax cuts through under reconciliation — the very same partisan process that failed for health care — is the wrong way to do the business of the country,” Schumer said Tuesday.

Despite McConnell's pronouncement, some Republicans said they still have hopes that tax reform is not strictly partisan.

“I’m not going to give up on anything,” said Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, which oversees tax reform.

Sen. John Thune, R-S.D., another Finance Committee member and part of the GOP leadership team, said he’s also open to working with Democrats.

“I would like to see us at least attempt to work with the Democrats to see if there are any of them … who are willing to work with us on tax reform that we think truly is pro-growth,” Thune told reporters.

The key word, however, is pro-growth" and Republicans' strict definition of it. The party outlined last week the broad measures of a plan they’ve been working on for more than two months. “We have always been in agreement that tax relief for American families should be at the heart of our plan,” the plan says, indicating that Republicans want to lower rates for even the wealthy, something Democrats don’t want to do.

Three Democrats didn't sign Schumer's letter: Sens. Joe Manchin D-W. Va., Joe Donnelly, D-Ind., and Heidi Heitkamp, D-N.D. All three are centrists who are up for re-election in 2018 and could be members Republicans reach out to for possible Democratic support.

Schumer insisted on Tuesday that bipartisanship is necessary.

“We’re not going to get it all our way. There will be compromises. That’s what it’s all about; that's what the Founding Fathers created in this country," Schumer said. "We’re urging our Republican colleagues not to go it alone but to work with us. Now that might mean their dream of huge tax cuts on the rich and almost crumbs or nothing for the middle class won’t happen."

Key Republican leaders — McConnell, Hatch, House Speaker Paul Ryan, and House Ways and Means Committee Chair Kevin Brady — have been meeting with Treasury Secretary Steve Mnuchin and White House chief economic adviser Gary Cohn for more than two months, working on the broad points of tax reform.

Republicans say that the committees will write the legislation over the next month and hold hearings in September where Democrats can offer amendments and vote throughout the process.