The Trump White House is quietly courting a few dozen House Democrats on tax reform — eager to avoid the fate of the GOP’s straight party-line attempt to jam through a repeal of Obamacare.
Even as congressional GOP leaders largely embrace a partisan path on taxes, White House officials have been wooing 15 to 20 centrist House Democrats since early summer. The Trump administration is all too aware of congressional Republicans’ struggles to come together on a range of hot-button issues — from health care to government spending — and tax reform is littered with political minefields for the party.
So the president and his staff are opening a line of communication with moderate Democrats in case a Plan B is needed. At a mid-June dinner at the White House with four centrist House Democrats, President Donald Trump expressed interest in a bipartisan package combining tax reform with infrastructure spending, multiple sources said.
Since then, Treasury Secretary Steven Mnuchin, chief economic adviser Gary Cohn and top White House staff have huddled with conservative Democrats in the Blue Dog Coalition and the bipartisan Problem Solvers Caucus.
“We’d prefer bipartisan support for the tax plan,” Marc Short, White House director of legislative affairs, said in an interview. “We still think we can earn the support of [Democrats] on the tax package.” Short acknowledged, however, that Hill Republicans “will choose the path that they want.”
Indeed, Senate Majority Leader Mitch McConnell (R-Ky.) made clear just last week that Republicans will pursue a partisan bill. The sweeping bipartisan tax overhaul of 1986 is unlikely to be repeated this go-round, McConnell said as he announced plans to use the simple-majority budget reconciliation process to overcome a likely Democratic filibuster.
McConnell and Senate Finance Chairman Orrin Hatch (R-Utah) have argued that Democrats could still get on board, but multiple GOP insiders say the plan for now is to proceed along party lines.
Nonetheless, the White House isn’t giving up on Democratic buy-in. Short and his staff have kept in touch with Problem Solvers Caucus leaders, including New Jersey Rep. Josh Gottheimer, the top Democrat in the group who also attended the June meeting with Trump. And White House officials have made a pointed effort to gauge centrists’ priorities for tax reform.
“I think there are a lot of practical folks in the House, Senate and the administration who are looking at health care and saying, ‘That didn’t work. Maybe we should have a backup Plan B — a coalition of Democrats and Republicans,’” said New York Rep. Tom Reed, the top Republican in the Problem Solvers Caucus.
So far, the White House courtship has centered on moderate House Democrats because tax reform will be initiated in the lower chamber. Short said he will begin additional outreach to Senate Democrats soon. In multiple interviews, Blue Dog Democrats sounded eager to work with the White House on a tax bill.
“The door is open, and this should be a bipartisan issue,” said Rep. Kurt Schrader (D-Ore.). “I hope they consider us.”
More than most other minority members, “centrist Democrats are more focused on doing what can be done to lower the corporate rates and the rates for [small businesses],” said Rep. Dan Lipinski (D-Ill.), who is working on a list of Blue Dog tax priorities and red lines to be delivered to the White House.
In the Senate, three of 48 members of the Democratic caucus declined to endorse a letter outlining their opposition to any bill that would add to the deficit or cut taxes for the top 1 percent of earners. One of those three, West Virginia Sen. Joe Manchin, said he hasn’t heard from the White House recently, but has expressed openness to a tax reform deal.
“I’ve said, ‘I’m happy to work with you all,’” Manchin said of his discussions with McConnell. But he also warned the Republican leader against racking up more debt, and said using the option-limiting reconciliation maneuver is a mistake.
And other Senate Democrats are hoping that McConnell’s members can dissuade him from using reconciliation to exclude them from the process, a tactic that backfired with Obamacare repeal.
“I’ve heard lots of my Republican colleagues say consistently that, after the health care experience, they’d like to see us try to work bipartisan on tax reform,” Virginia Sen. Mark Warner, a fiscally moderate Democrat on the tax-writing Finance panel.
Asked whether Republicans could win Democratic votes for a tax bill using a fast-track procedure to pass the bill on 51-votes, Warner scoffed: “No. No.”
Going the bipartisan route is hardly a guarantee of success, given the disincentive for leaders on both sides of the aisle to work together ahead of next year’s midterm elections.
Republicans and Democrats also fundamentally disagree on whose taxes to cut and how any plan would affect the middle class. Republicans prefer reductions for top earners and business owners, which they believe will grow the economy and promote job creation. Democrats, on the other hand, have dubbed that kind of supply-side approach “voodoo economics” and are more interested in ensuring that wealthier Americans carry a heavier tax burden than the poor and the middle class.
In the House, centrist Democrats have asked the White House that any bipartisan tax agreement include an infrastructure package. While Trump and Cohn are said to be receptive to that idea, it’s on the back-burner for now. Senior Hill Republicans are wary of pairing the two, and some administration officials worry it’s too heavy a lift to clear by year’s end.
Even so, some White House and congressional sources fear that a GOP tax bill could get muddled in the ongoing intra-conference war between conservatives and moderates. Should that happen, Republicans will need to find more votes — and centrist Democrats could be their only hope for passage.
Recent precedent gives Republican some cause for optimism that Democrats will get behind tax cuts, even if they resort to reconciliation. President George W. Bush’s tax cuts passed under reconciliation with Democratic votes in 2001 and 2003, with a dozen Senate Democrats supporting the individual rate reductions and two backing corporate cuts.
That’s why Senate Republicans like Hatch aren’t giving up on red-state Democrats, who are more inclined to work across the aisle. Hatch reminded Democrats last week that “nothing in the rules requires reconciliation to be partisan.”
Indeed, more administration and Capitol Hill officials are starting to express that sentiment. A repeat of the Bush-era scenario, in which Republicans win the support of just a handful of Democrats, could make all the difference in whether a tax bill becomes law.
In the Senate — the chamber known for more bipartisanship — talks between the two parties on tax reform have been all but nonexistent so far. McConnell’s early embrace of a tax bill that needs 50 rather than 60 votes alienated some moderate Democrats who might have been inclined to engage, such as Sen. Jon Tester of Montana.
Tester, a top target for Republicans in next year’s midterms, dismissed McConnell’s claim that Democrats drove him to employ reconciliation as “so much crap.”
“He did the same thing with health care,” Tester said in an interview. “We offered to help and he said, ‘No, I’m going to run it down your throat.’ He’s going to do the same thing with taxes, and it’s bad public policy when you don’t bring people together to have a debate.”