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Senate Dems Spell Out Conditions On Bipartisan Tax Reform

Senate Democrats said they won't support any overhaul that delivers cuts to the top 1 percent or adds to the government's $20 trillion debt.

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Senate Democrats and independents said Tuesday that upcoming legislation to rewrite the nation's tax code should ensure the middle class doesn't pay more and the "top 1 percent" doesn't pay less.

In a letter to Republican leaders, including President Donald Trump, 45 of the 48 Senate Democratic caucus members said they won't support any upcoming GOP effort to overhaul the tax system that delivers cuts to the top 1 percent or adds to the government's $20 trillion debt.

Republicans controlling Congress are gearing up to advance their tax measure this fall, promising to lower rates on businesses and individuals, while clearing out many tax breaks and deductions.

The letter says that Democrats hope to work with Republicans to promote investment and modernize the outdated tax code, but the terms laid out by Democrats are unlikely to tempt Republicans, who are planning to use a filibuster-proof Senate procedure to advance the legislation without their help.

"Any tax reform effort should not benefit the wealthiest individuals, who have already seen outsized benefits from recent economic gains," said the letter, authored by Minority Leader Chuck Schumer, D-N.Y., and others and provided to the media. "Tax reform cannot be a cover story for delivering tax cuts to the wealthiest."

The contours of the GOP tax plan are fuzzy at best, but House Speaker Paul Ryan, R-Wis., says he's not pressing for a large, deficit-financed tax measure. But keeping GOP promises for large rate cuts won't be easy under those conditions, given the difficulty in eliminating popular deductions and tax breaks.

The most recent successful tax reform effort was in 1986 and required a bipartisan push to overcome opposition from powerful interest groups.

Sen. Roy Blunt, R-Mo., a member of the GOP leadership team, said after the collapse on health care, lawmakers need to "see if we can't put some wins on the board and certainly tax reform, infrastructure are the kinds of things we ought to be looking at."

He argued that tax reform would be easier "because it's about revenue but there's nothing wrong with looking at what the options are in terms of a long-term permanent tax cut as opposed to a short term if that's possible."

GOP leaders also intend to reject another Democratic demand: advancing the measure under regular legislative procedures instead of through the planned fast-track path.

Three Democrats from states easily carried by President Donald Trump β€” Joe Manchin of West Virginia, Joe Donnelly of Indiana, and Heidi Heitkamp of North Dakota β€” did not sign the letter. Each of the three is up for re-election.

In Tuesday floor remarks, Schumer said that tax reform should focus on increasing "wages for working families, improving middle class job growth, promoting domestic investment while modernizing our outdated business and international tax system."

Added Schumer: "From what we've heard from the White House so far, their plan wouldn't do any of that."

Separately, Schumer, Treasury Secretary Mnuchin and Majority Leader Mitch McConnell, R-Ky., met on Tuesday morning on Capitol Hill.

"As I've said before tax reform is a major priority of ours and we will be proceeding with it," Mnuchin said after the meeting.

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