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Delay in corporate tax cut: ‘Fuggedaboutit,’ says strategist

Key Points
  • Republican senators may be proposing to delay cutting the corporate tax rate until 2019, but political strategist Terry Haines told CNBC on Thursday that he doubts that will happen.
  • He believes the House and the president will "insist" on an immediate corporate tax cut.
  • James Pethokoukis thinks the real risk to the corporate tax cut is that it ends up being temporary.
Corporate tax rate delay? 'Fuggedaboutit': Evercore ISI's Terry Haines

Republican senators may be proposing to delay cutting the corporate tax rate until 2019, but one political strategist told CNBC on Thursday that he doubts that will happen.

"The idea that the corporate tax rate cut will be delayed by a year — fuggedaboutit. Not going to happen," said Terry Haines, senior political strategist at Evercore ISI.

"The House will insist upon that. More importantly, the president will insist upon it."

Senate Republicans unveiled their plan Thursday, which contains key differences from the bill currently working its way through the House.

Notably, it slashes the corporate rate from 35 percent to 20 percent, but delays the change until 2019, a source told CNBC. In the House bill, the new rate would take effect next year.

Haines told "Closing Bell " lawmakers actually want an imperfect bill as opposed to a "perfect" bill that can "run into all kinds of problems" like what was seen in the GOP's attempt to repeal Obamacare.

"You want something to pass. You get the votes. You move it through. This bill is going to be written in a House-Senate conference. Everybody understands that. It's going to take a little bit of time," he said.

"What's going to end up happening, I think, is that you get an immediate tax cut to 20 percent."

James Pethokoukis, economic policy analyst at the American Enterprise Institute, doesn't think a potential one-year delay is the real risk to the corporate tax cut.

"The risk is … that it ends up being temporary and then they're doing a riverboat gamble that Democrats won't want to raise it in 10 years. Or is it phased in or does that final rate be something to 30 percent than 20 percent?" he told "Closing Bell."

Sen. Maria Cantwell, D-Wash., slammed the GOP plan, saying it will actually raise taxes on middle-class families.

Included in both the House and Senate bills is the elimination of federal deductions for state and local taxes. However, the Senate bill doesn't change the mortgage interest deduction, which allows deductions on interest for up to $1 million in mortgage debt. The House bill caps the figure at $500,000.

Cantwell told "Closing Bell" that Republicans want so much change instantaneously, and that doesn't usually work out.

"Instead of trying to swing for the fences and change the entire tax code over a one week period of time without really input and insight as to the effect, let's take our time and get a couple of base hits underway," she said.

The Senate Finance Committee is aiming to start marking up, or amending and debating, a bill next week. Meanwhile, House GOP leaders hope the full chamber will vote on its proposal next week.

— CNBC's Jacob Pramuk contributed to this report.