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Chance of GOP failure on Reagan-like tax reform '100 percent,' says former Obama advisor

  • Republicans may occupy the White House and have control of Congress, but it still won't be enough to pass comprehensive tax reform, Austan Goolsbee said.
  • He put the chances of failure on tax reform, "like what Ronald Reagan did where we broadened the base and lowered the rates," at "100 percent."
  • The GOP has given up on trying to pay for the tax cuts and are just trying to figure out what size they could pass, he said.

Republicans may have the majority in the House and Senate, as well as occupy the White House, but that still won't be enough to pass comprehensive tax reform, former Council of Economic Advisers Chair Austan Goolsbee told CNBC on Wednesday.

He put the chances of failure on tax reform, "like what Ronald Reagan did where we broadened the base and lowered the rates," at "100 percent."

Republicans have "basically just given up on trying to pay for the tax cuts that they're going to do. They're now just trying to figure out what size of tax cut could they pass and how could they put together a coalition of 50 percent plus one," Goolsbee, who served on the council under President Barack Obama, said in an interview with "Power Lunch."

The Trump administration and GOP leaders released the framework for their tax reform plan two weeks ago. It calls for lowering the corporate rate from 35 percent to 20 percent and collapses the current seven personal tax brackets to just three. There was no indication of how the tax cuts would be paid for.

Meanwhile, there are concerns that the political infighting between President Donald Trump and Republicans may jeopardize the success of the tax plan.

Earlier this week, Trump sparred with Sen. Bob Corker after the Tennessee Republican criticized Trump in a New York Times interview for tweeting things "that are not true." Trump then mocked the senator's physical stature and said Corker was "made to sound like a fool" in the interview.

Trump also has taken jabs at Sen. Majority Leader Mitch McConnell, among others.

Alan Tonelson, founder of the public policy blog RealityChek, said on "Power Lunch" that he believes there is an "excellent" chance Trump won't see his agenda passed thanks to the rift in the party.

As for whether Republicans will agree to tax cuts instead of sweeping tax reform, as Trump promised during the campaign, he's not convinced.

"Will watered-down victories, weak victories, will that satisfy the kinds of Republican voters in particular who put President Trump over the top? I think there's reason for real doubt about that."

— CNBC's Ylan Mui and John Harwood contributed to this report.