President Trump will focus on tax reform when he delivers the keynote address at the Heritage Foundation’s annual President’s Club meeting Tuesday evening.
The president will use the speech before the audience of conservatives to make the case that his tax cuts will spur “massive economic growth,” senior administration officials said in a conference call with reporters. While the White House officials said they’re “very confident and excited” the plan will boost the economic fortunes of the middle class, they also acknowledged it has critics on both sides of the aisle and comes with high stakes for the president.
The centerpiece of Trump’s tax reform pitch is “the $4,000 pay raise that our framework would deliver for a typical hard-working American family,” an administration official said. However, that number is itself disputed by tax experts. Trump’s plan calls for slashing the corporate tax rate from 35 percent to 20 percent. While Democrats and other critics argue this will disproportionately benefit the rich, the White House said it will spur overall economic growth and wage increases that will lead to the income gains for those with lower incomes. On the call, senior officials cited figures showing job growth occurred after past tax cuts.
“Take a look back through history of what has happened economically in the United States when tax cuts get passed,” one official said.
The effects of past tax cuts are disputed, however, and there is data showing that job growth also followed tax increases. When asked about this, an official repeatedly noted that Trump was not looking at tax reform “in a vacuum” and was engaged in other efforts, including phasing out regulations in order to “eliminate all barriers to economic growth and job creation.”
“The president’s really taking a holistic approach to the economy and doing everything he can to, in his words, just put rocket fuel into the economy and really spur growth,” the senior administration official said.
Trump’s tax reform push comes on the heels of his failure to repeal Obamacare. That loss meant many congressional Republicans were unable to make good on a promise to their base, which overwhelmingly supports ending former President Barack Obama’s health care law. It also left Trump without a signature legislative achievement since taking office, despite his party controlling both houses of Congress.
“There are a ton of accomplishments that we’ve had over … a very short time in being here that I think that we probably haven’t gotten enough credit for,” an administration official said during Tuesday’s call. Still, the official acknowledged, there was a “certain sense of urgency” to Trump’s tax reform push.
“There is a great deal of urgency we sense from members of Congress who are going back to their districts and hearing … from their constituents who are saying things like, ‘Listen, you guys promised us for seven years that you would replace Obamacare and you haven’t been able to do it. You’ve been promising us if you could just get the House, Senate and the presidency you would do, you know, any number of things for the American people,’” the official said. “I think the American people are expecting that.”
The official added that the need for tax reform isn’t just about approval ratings.
“There’s a real sense of urgency over this, not just because of what it means for us politically or for members of Congress politically, but for what it means for the American people, how this is going to impact them and the idea that a regular American family out there could get a $4,000 pay raise as a result of this,” the official said.
Controlling 52 of the 100 seats in the Senate, Republicans hope to pass tax reform through reconciliation, which would only require a simple majority. That would mean either holding on to all GOP votes or winning over a few Democrats. The senior administration official told reporters the White House has “a lot of optimism” the plan will succeed and said he expected backing from the full spectrum of Republicans.
“If you just look at the dynamic of Congress, folks in the Freedom Caucus to more, you know, middle of the road kind of establishment-type Republicans, whatever you want to call it, everybody’s kind of come together and said, Look, this is something that’s too important for us not to do,” the official said.
The official further predicted that some Democrats might get behind the bill.
“There are some Democrats on Capitol Hill who realize that, you know, this is something that their constituents want a lot,” the official said.
However, Democrats have repeatedly attacked Trump’s tax push as benefiting the wealthy. Ahead of Trump’s speech, Democratic National Committee deputy communications director Adrienne Watson told Yahoo News the president’s pitch was the latest stop on a “tour of tax lies.”
“Americans know better than to believe his false promises about a pay raise that will never materialize for them. We’ve seen repeatedly that tax cuts for wealthy corporations do not result in an increase in wages for workers,” Watson said. “Democrats will hold Trump and Republicans accountable for lying about their tax plan, and we demand that not one penny of tax cuts go to millionaires and wealthy corporations.”
Trump himself has admitted it will be tough to get Democrats to support the plan. After meeting with Republican Senate Majority Leader Mitch McConnell on Monday, Trump said he thought it would be possible that “three or four” Democrats could support his tax cut plan. But he also predicted there could be zero Democratic backing.
“That’s because they are obstructionist and they basically want us to do badly,” Trump said.
Some Republicans have also indicated they might not support Trump’s plan. Earlier this month, Tennessee Republican Bob Corker bluntly declared, “Count me out if it adds a penny to the deficit.” On Tuesday, the senior administration official dismissed the concern that Trump’s tax reform could add to the debt. The official cited the White House’s prediction the plan would spur economic growth as well as Trump’s efforts to curb federal spending.
“The combination of those cuts and then the growth aspect of this is really the way that he’s going to go in there and sell it to this crowd tonight,” the official said.
Republican Maine Sen. Susan Collins has also expressed concern about the president’s plan, echoing the fears held by many Democrats that eliminating the estate tax and bringing down the top income tax rate would disproportionately benefit the wealthy. But the senior administration official said, “The whole argument from some Democrats that this is tailored toward the wealthy is so tired.”
“It’s just nonsense because hard-working Americans are looking at what has happened over the past eight years,” the official said, adding, “They’re saying, ‘Well, the only people who have benefited from the economy and the tax structure as its currently set up are the wealthy and well connected.”
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