Two key GOP holdouts on Friday announced they plan to support Senate Republicans’ tax overhaul plan, with one saying it looks like the backing will give leaders enough supporters to pass the legislation.
Sens. Ron Johnson of Wisconsin and Steve Daines of Montana, who have been holding out for additional benefits for small businesses in the $1.4 trillion-plus package, now say they plan to support it.
Mr. Johnson told WISN radio that it “looks like” Republicans have 50 votes for the package, which would be enough to pass it with the tie-breaking vote of Vice President Mike Pence.
“I may be flying home to Wisconsin yet tonight,” Mr. Johnson said.
Mr. Johnson and Mr. Daines had initially withheld support for the bill, saying they wanted to see more benefits for “pass-through” companies that file their taxes as individuals.
They said the incentives for those businesses in the legislation might not be enough to compete with big corporations, who are getting their tax rate slashed from 35 percent to 20 percent.
“After weeks of fighting for Main Street businesses including Montana’s farmers and ranchers, I’ve decided to support the Senate tax cut bill which provides significant tax relief for Main Street businesses,” Mr. Daines said.
Mr. Johnson said a deal struck with GOP leaders would boost a deduction for certain small business income from 17.4 percent in the original plan to 23 percent and provide better rules if the smaller businesses want to reclassify as corporations.
He said the effective tax rate for “pass-through” companies would end up being a little less than 30 percent.
The news comes a day after Mr. Johnson, along with Sens. Bob Corker of Tennessee and Jeff Flake of Arizona, had threatened to vote with Senate Democrats to rewrite the bill so it didn’t add to federal deficits.
“That really produced a level of very serious negotiations that went into the night,” Mr. Johnson said.
He also said he was given assurances that he would be “at the table” when House and Senate leaders hammer out differences between the chambers’ versions in a conference committee.
GOP leaders had hit a snag Thursday when they had to abandon a compromise on a “trigger” plan — pushed by deficit hawks like Mr. Corker and Mr. Flake — to reinstate tax hikes if the package doesn’t produce the economic growth Republicans are expecting.
Senators indicated that the provision might not pass muster under Senate rules they’re working with to fast-track the legislation.
Mr. Johnson said the new changes probably don’t fix things for Mr. Corker, but that the lone holdouts could be limited to him and Mr. Flake at this point.
“I think that’s one of the reasons Senate leadership did a deal with me — that they realized that what I was talking about was [an] incredibly legitimate concern,” Mr. Johnson said.
“I was just trying to get back to where the framework was, versus the trigger concern,” he said, saying a lot of members don’t think automatic tax increases make a whole lot of sense.
Republicans control 52 seats of the 100-member chamber, and could still pass a bill without Democratic support if they limit their defections to no more than two.
Sen. John McCain of Arizona, another potential holdout, announced his support for the plan on Thursday.
Sen. Susan Collins of Maine has said she wants agreements tied to a local property tax deduction and health care issues, but has sounded positive about the prospects of her asks.
Sens. Mike Lee of Utah and Marco Rubio of Florida have also been pushing for changes. They want an expanded child tax credit, to be paid for by bumping the corporate tax rate up to 22 percent.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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