Corker seeks inclusion of ‘backstop’ in Senate tax overhaul; otherwise ‘very possible’ he’ll vote no

U.S. Senate Republican leaders are considering last-minute changes in federal tax overhaul legislation, including a provision pushed by Tennessee’s Bob Corker that could eliminate some tax cuts if the new law winds up adding more to the federal deficit than projected, reports Politico.

Two critical Republican swing votes, Ron Johnson of Wisconsin and Bob Corker of Tennessee, on Monday left open the possibility that they could vote against the tax plan in a key committee vote scheduled for Tuesday if changes weren’t made to their liking. That would tank the bill before it could reach the floor, putting more pressure on leadership to quickly make revisions.

…A handful of deficit hawks — including Corker and Sens. Jeff Flake of Arizona and James Lankford of Oklahoma — are discussing a trigger mechanism that would kick in and potentially change tax rates if the economic growth needed to defray the cost of the tax overhaul doesn’t materialize.

A letter from Republican economists published in The Wall Street Journal projected that the business-side tax changes in the GOP plans could boost gross domestic product about 0.4 percent annually over a decade. Other analyses, however, have cast doubt on that estimate and said even that level of growth would not be enough to pay off the cost of the $1.4 trillion Senate tax cut.

“What if the growth estimates don’t hit the 0.4 percent? What happens?” said Lankford, one of a handful of Senate Republicans worried the bill will be a budget-buster. “What should happen in the tax code to be able to make the adjustments? Every economist is guessing.”

Corker told reporters he had spoken with National Economic Council Director Gary Cohn throughout the weekend about his deficit concerns, and also met with Treasury Secretary Steven Mnuchin earlier on Monday. Mnuchin also made a stop at Daines’ office at the Capitol to discuss his concerns.

“We’re beginning to exchange some things in writing,” said Corker. “[We’re] working very closely with the administration and also some members of the Finance Committee to design a trigger or a backstop that in the event the revenue’s not there, there’s a way to recoup them so you’re in a situation where you’re not creating deficits should the projections that have been laid out not be real.”

Corker added that it was “very possible” he might vote no on Tuesday when the Senate Budget Committee meets to prepare the tax legislation for the floor. Johnson told The Associated Press that he will vote against the measure in the committee unless senators come up with a fix.

Republicans hold just a one-seat majority on the Budget Committee, although budget experts say there are likely ways to bring the measure directly to the Senate floor if it’s voted down in the committee.

But Corker also downplayed his potential opposition, saying his concerns over cutting taxes without measures to prevent increases to the national debt has “been known for some time.” Flake said he was “a bit” encouraged about the direction of those discussions, but added: “We have a ways to go.”

UPDATE/Note: A Tuesday press release from Sen. Corker’s office:

WASHINGTON – In an interview on “Fox & Friends”, U.S. Senator Bob Corker (R-Tenn.), a member of the Senate Budget Committee, today discussed his work to improve the Senate tax reform legislation by putting in place a “trigger” mechanism that would ensure fiscal responsibility should economic growth estimates not be realized.

“I think all of us want to get across the finish line, and we are trying to make this bill one that not only serves our immediate interests as a nation but also our long-term interests,” said Corker. “Everybody is working feverishly right now to try to get to that place.”

“For the last 13 days, Brian, we have been working with the finance committee and over the Thanksgiving holiday… very feverishly with the White House – both [White House National Economic Council Director] Gary Cohn, [Treasury Secretary] Steve Mnuchin, who was in my office yesterday, [White House Chief of Staff] John Kelly, and others – to try to create a backstop, or a trigger mechanism, that to the extent the growth estimates that have been laid out aren’t achieved, we don’t pass on even greater debt to our children,” added Corker. “We are working on that right now and hopefully we’re going to be successful.”

“What you don’t want to do is create uncertainty as businesses are making decisions down the road,” continued Corker. “And you don’t want to do something that stifles growth. We’re working on all of those things right now, again, very constructively with each other to try to resolve it.

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