Speaker Mike Johnson's plans to get a bipartisan tax deal through the House this week are teetering on the verge of collapse after an unlikely coalition of House Republicans aired last-minute concerns during a private GOP meeting on Tuesday.
According to members who attended the meeting, Republican leaders are staring down a messy litany of complaints from both incumbents in vulnerable districts demanding state and local tax relief and conservative Freedom Caucus members who are intent on bringing border politics into the tax debate.
Then there are the lawmakers with a third type of complaint: anger that Johnson is relying on Democratic votes to pass a major piece of tax legislation in an election year.
“It’s a problem that we continue to do things under suspension of the rules,” said House Freedom Caucus Chair Bob Good (R-Va.), referring to a House maneuver that allows Johnson to pass the tax deal with a two-thirds majority rather than steer it through the conservative-dominated Rules Committee.
“I’m not going to support something that expands the Child Tax Credit, which is expanding the welfare state massively," Good added. "And I’m not going to support tax credits, Child Tax Credits, going to illegals. I think that’s incentivizing this illegal invasion.”
Rep. Nick LaLota (R-N.Y.), one of several blue-state Republicans adamantly opposed to any tax package that wouldn't boost the state and local tax deduction, told reporters that party leaders have not yet committed to a floor vote on the deal “in its current form." And leadership also indicated, according to LaLota, that the deal is still open to potential changes.
The state and local tax changes sought by LaLota and other so-called SALT Caucus Republicans are otherwise unpalatable to a wide swath of the Republican conference.
The grievances from those blue-state incumbents and Freedom Caucus members complicate Johnson's path to a floor vote. The speaker indicated on Monday that he wants to take up the bipartisan tax package on the floor under the expedited process that suspension of the House rules would afford him.
“I expect that [the vote] will be this week. I expect that it will be in the next couple days,” House Ways and Means Chair Jason Smith (R-Mo.), who brokered the deal with Senate Finance Chair Ron Wyden (D-Ore.), said on NBC Tuesday morning.
But Johnson declined to commit to any concrete timing at a press conference later in the morning. One senior House Republican, granted anonymity to speak candidly, told POLITICO that a decision on when a tax vote would occur is truly up in the air.
“There’s no decision, so we’re going to wait and see right now,” the senior Republican said.
Despite the complaints from ultra-right conservatives and Republicans seeking SALT changes, plenty of moderates also praised Smith, who outlined the bill for members at the Tuesday meeting. The tax chief has shepherded the GOP through bipartisan talks that ended with an agreement to restore three popular business tax breaks, including those that would give larger research and development deductions.
“We can’t get anything that we consider perfect through this slim majority that we have and a Democrat-run Senate and a Biden White House, but it’s strong. It brings back the Trump tax cuts,” said Rep. Daniel Meuser (R-Pa.). “It’s very, very important for small business and families.”
“As far as I’m concerned, as a small business owner and chair of the Small Business Committee, we vote on it. Business needs it,” said Small Business Chair Roger Williams (R-Texas).
With Ways and Means Republicans unanimously behind Smith in their support of the tax package — plus nods of approval from both Johnson and powerful members, such as Rules Committee Chair Tom Cole (R-Okla.) — the bill could still sail through the House with Democratic backing. However, some of LaLota's allies in the SALT cause have suggested they might oppose their own leaders on unrelated rules for other legislation if they don’t get their way.
With the GOP’s slim majority, two Republicans (or less, in the event of absences) could effectively block a piece of legislation considered under a rule for debate by joining Democrats in voting against that rule.
Such a move would have been unthinkable as recently as last Congress, but conservatives have made it a more standard practice recently.
“I haven’t talked to the SALT caucus people, but I think there’s some merit to possibly raising the SALT limit,” Good said of LaLota's concerns. “And I would be willing to consider that in exchange for not expanding the Child Tax Credit, not making it eligible for illegals to receive.”
Rep. Mike Garcia, a California representative in the SALT Caucus who would like to see some form of tax relief included in the package, dismissed the notion of tanking unrelated rules to force changes to the tax deal: “I don’t personally like that tactic. I think that’s a tactic of the Freedom Caucus.”
“As a team we should be passing rules, letting things come to the floor for a vote,” Garcia said.
Undocumented immigrants with U.S.-born children have long been able to get the credit, but other members like Reps. Chip Roy (R-Texas) and Tim Burchett (R-Tenn.) have joined Good in calling on Republicans to further restrict eligibility.
Even if Johnson can placate his frustrated members, delay of the legislation is bound to make things more complicated for the IRS as it starts receiving tax returns for the 2024 filing season. Wyden had originally wanted to enact the tax package by Monday, which was the beginning of the filing season, but now lawmakers are aiming to pass something in the next few weeks.
The sense of urgency surrounding the tax package has grown particularly acute because low-income families tend to file their returns early. That increases the prospect that the agency itself will have to make changes to those returns so that parents can claim a second refund under an expanded version of the child credit.
Jordain Carney and Anthony Adragna contributed to this report.
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