GOP leaders back away from plan to shrink tax bill

Senate Republican leaders are backing off their pledge to deficit hawks to shrink the size of the tax package by $350 billion to $400 billion.

Senate Republican Whip John Cornyn (R-Texas) told reporters after a meeting Friday morning that is no longer in the bill.

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“It’s not in the bill,” he said.

Instead, GOP leaders worked around deficit-minded Sens. Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.) by securing the support of other holdouts. 

Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.) say they now back the legislation because of concessions to help small businesses.

Leaders won over Johnson and Daines by increasing the deduction for pass-through businesses to 23 percent — up from the 17.4 percent originally set by the legislation.

Daines said the increased deduction will be paid for by increasing the tax rate on repatriated foreign earnings to match the House-passed bill.

Deprived of leverage, Flake announced around noon on Friday that he would vote yes, settling for less than the $350 billion reduction in the total size of the tax package that he and Corker held out for the day before.

Initially, Flake and Corker wanted a trigger that would automatically reduce the size of the tax package if the economy failed to grow as much as projected after six years.

Instead, Flake won a concession to eliminate what he called an “$85 billion expensing budget gimmick.”

He also obtained a promise from Senate GOP leaders to work with him on legislation to protect illegal immigrants who came to the country as children — the so-called Dreamers — from deportation.

“Having secured both of those objectives, I am pleased to announce I will vote in support of the tax reform bill,” he said in a statement.

Sen. Susan Collins (R-Maine), a key moderate, said before the Friday meeting that she is undecided but praised the negotiations as making “good progress.”

Collins said she would announce her position on the bill in a formal statement later Friday.

Lawmakers emerged from the meeting confident they would get a deal.

“We have the votes,” Senate Majority Leader Mitch McConnell (R-Ky.) told reporters as he walked onto the floor after the meeting.

“I feel very good,” said Sen. John Kennedy (R-La.). “Part of politics is drama. I’ve been in this business a long time and drama goes along with it, but don’t read too much into it.

“I think we’re going to have a good day,” he said.

– This report was updated at 12:24 p.m.