McCain gives support to imperfect Senate tax plan

On Wednesday the U.S. Senate moved their proposed tax bill from Committee to a floor debate, along partisan lines, signalling the desire to make the deadline to put tax reform on President Trump’s desk by Christmas; and after reconciliation with the House version, to win a sorely needed legislative win from an administration that has seen only failure in its attempts to craft successful legislation, and that many, including conservatives, especially the ultra-right wing have written off as ineffective.

Hope springs eternal, and one of the more illuminating signs is that Trump who has been mostly disengaged from the process, but now, some observers have noted, he is on more familiar ground, having used a loss of $916 million for a tax break, and that he touted on the 2016 campaign. In fact, to the surprise of some of his staff, they have never seen him so energized.

The Senate version does have many senators nervous about deficits, as we have noted before, so much so that Bob Corker of Tennessee, has asked for a trigger to automatically increase taxes, if the bill fails to both generate and stimulate the economy, and increases the deficit.

This has become wildly unpopular by his fellow senators, with the exception of Sens. Flake of Arizona and Lankford, of Oklahoma. In fact, the consensus of many is that this has the effect of “hobbling the bill’s ability to spur economic growth.”

With a need to get 50 votes, versus 52 with Democratic help, which is nigh to impossible at this point, conservative senators, such as those three, could help push the bill to get the needed votes.

In a surprise move on Thursday, Arizona Sen. John McCain gave his, albeit reserved endorsement, of the Senate plan, and said in a statement: “I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families.”

With the veteran senator giving his even limited imprimatur on the plan, this is a boost to moving it along. Yet, his support on previous tax cuts has been underwhelming, as he did, by dissing them, with President Bush’s considerations in both 2001 and 2003.

Is the old warrior merely tired, after health issues, or has he been persuaded to help push the boat into the water, even if others have to keep it sailing?

Crain’s Chicago Business noted in its coverage, that “The Arizona lawmaker joins Lisa Murkowski of Alaska -- another GOP senator whose support had been in question -- in publicly endorsing the Senate tax bill in recent days. “

A much anticipated report from the Joint Committee on Taxation, came out with its assessment of the plan, but not one to bring joy to the debate. It revealed: “A new analysis released today by the Joint Committee on Taxation found that the Senate tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade. After accounting for interest rates, the growth figure would fall to $407 billion, said the JCT, Congress's official scorekeeper on tax legislation. That would leave a 10-year revenue loss of roughly $1 trillion.”

As mainstream media has noted, “Discussions have centered around a $350 billion tax-increase trigger, far short of the $1 trillion revenue loss the JCT projects.

This is not the first misrepresentation -- on Sunday Kevin Brady, chair of the House Ways and Means Committee, said on FOX-TV that there would be a 70 percent, or better tax savings to families making less than $200,000 --  but as FactCheck.org showed, that this figure would only apply to individuals under tax changes that would only be seen in 2019.

Perhaps the most glaring discovery was that by 2027, 50 percent of the tax relief would go to those making over $200,000, exceeding the markers of what defines a middle-class income in America.

Going even further is that the new tax proposed bracket consolidation, after being adjusted for inflation, will have most people pushed into higher tax brackets.

The Senate bill includes a provision that repeals all the individual tax cuts by 2026, which would tend to crimp economic growth. Senate tax writers included the expirations to make the bill comply with Senate rules against budget legislation increasing long-term deficits.

The new estimate “ends the fantasy about magical growth and claims that tax cuts pay for themselves,” said Senator Ron Wyden, the top Democrat on the tax-writing Senate Finance Committee, who called the finding the “total opposite” of what Republicans have said.

Not to be outdone, the right had its reply and “A  conservative-leaning policy center, the Washington-based Tax Foundation, released a statement saying JCT's findings were “likely underestimating the economic growth spurred by this tax bill.”

“The range of estimates from JCT includes several important assumptions that limit its growth results, particularly, assumptions regarding the Federal Reserve's response to potential inflation and the United States being a closed economy,” the policy group said in a statement. The group is working on its own score for the latest version of the Senate bill.”

Up next is a spirited debate, about 20 hours worth, on the Senate floor, and votes on various amendments that every bill goes through -- a time honored process that has been given the name of “vote-a-rama,” by waggish veterans.

This is a developing story, be sure to come back for updates.