×

Sen. Grassley: 'We're going to do a lot better' than a new congressional analysis of tax impact says

  • A new analysis shows that the Senate tax plan won't grow the economy as much as Republicans had hoped, but Sen. Chuck Grassley said those findings are very conservative.
  • Grassley said, "We're going to do a lot better" than the analysis says.
  • He also believes the Senate will get the votes to pass the bill.

A new analysis shows that the Senate tax plan won't grow the economy as much as Republicans had hoped, but Sen. Chuck Grassley, R-Iowa, told CNBC on Thursday that those findings are very conservative.

According to the Joint Committee on Taxation, the plan would add $1.4 trillion to federal deficits over a decade even after economic growth is taken into account. It would modestly increase gross domestic product by 0.8 percent over that period, the JCT projected.

Grassley said there is "long-term opposition to dynamic scoring" on the part of the committee, as well as the Congressional Budget Office.

"It just proves to me that we're going to do a lot better because of their bureaucratic resistance to dynamic scoring," Grassley said in an interview with "Closing Bell."

Republicans have argued that tax cuts would pay for themselves in the form of economic growth.

The JCT report comes just hours before an expected Senate vote on the GOP tax reform bill. The upper chamber needs a simple majority to pass the legislation, but several senators have expressed concerns about the effect on federal deficits.

With 52 Republicans, the party can afford to lose two senators and have Vice President Mike Pence cast the tiebreaking vote.

Earlier Thursday Sen. John McCain, R-Ariz., said he'll vote "yes," boosting the odds of the plan's passage.

Grassley said he believes that accommodations that are being made to bring aboard holdout members and keep long-term supporters will get all 52 Republican votes.

One of those accommodations could wind up being the corporate tax rate. The White House has insisted on a 20 percent rate, down from the current 35 percent. According to The Wall Street Journal, Senate Republicans are considering whether to set the rate slightly above 20 percent to accommodate other changes in the bill.

Grassley told CNBC it would be OK if the corporate tax rate wound up at 22 or 23 percent.

The rest of the industrial world has an average corporate tax rate of 22 percent, he said.

"If we were at that average we'd be a heck of a lot better off than we are now at 35 [percent], but we're going to be more competitive at 20 [percent]."

Earlier Thursday, Republican Sen. Mike Rounds of South Dakota told CNBC he'd be willing to vote for a 22 percent corporate tax rate if necessary to pass the bill.

— CNBC's Jacob Pramuk contributed to this report.