Bob Corker will oppose Senate tax bill, but it has the support to pass

Key Points
  • Senate Republican leaders appear to have the votes to pass their tax overhaul.
  • Changes to the plan won over at least four GOP senators on Friday.
  • Sen. Bob Corker will oppose the bill.
  • The GOP can lose only two votes and still pass the legislation.
Corker a 'no' on tax bill
Corker a 'no' on tax bill

Senate Republicans were confident they had the support needed to pass their tax overhaul Friday as last-minute changes brought more GOP lawmakers on board.

"We have the votes," Senate Majority Leader Mitch McConnell told reporters after GOP senators emerged from a meeting.

By passing the bill, the Republican Party would step closer to its goal of overhauling the American tax code under a unified government. As McConnell spoke, the GOP still had not released the final text of the bill it wants to push through later Friday.

Sens. Steve Daines, R-Mont., and Ron Johnson, R-Wis., earlier Friday said they would back the bill after securing further tax relief for pass-through businesses. Then, holdout Sens. James Lankford, R-Okla., Jeff Flake, R-Ariz., and Susan Collins, R-Maine, committed to supporting the plan, leaving Republican leaders confident that they had the support.

Sen. Bob Corker, R-Tenn., will oppose the plan over deficit concerns, the only Republican to say he would vote against it as of Friday evening.

"While I support a number of the provisions included in this legislation and continue to believe it would have been fairly easy to alter the bill in a way that would have been more fiscally sound without harming the pro-growth policies, unfortunately, it is clear that the caucus is in a different place," Corker said in a statement.

The support Friday from the other senators, among the last Senate GOP holdouts, all but guarantees that Senate Republicans can pass their plan. The GOP scrambled to rework the bill after a last-minute setback Thursday night.

Mitch McConnell: We have the votes to pass tax bill
Mitch McConnell: We have the votes to pass tax bill

The GOP had already secured support from two other key votes: Sens. John McCain, R-Ariz., and Lisa Murkowski, R-Alaska.

Daines reached an agreement with leadership to raise the amount of pass-through income business owners can deduct. The deduction will go to 23 percent from 17.4 percent in the original Senate bill. Pass-through income would still get taxed at individual tax rates, but those business owners would have the deduction. The net effect would drop the rate on pass-through entities below 30 percent, The Wall Street Journal reported.

To offset the cost of those changes, senators are expected to raise the tax rates for businesses repatriating assets.

Collins secured concessions from GOP leaders on Friday. The bill will add up to $10,000 in state and local property tax deductions, matching the plan that passed the House. It previously eliminated those deductions.

It will also include expanding a deduction for medical expenses. Collins, who voted against a GOP plan to repeal Obamacare in September, explained why she is supporting a bill which eliminates the law's individual mandate. Doing so is expected to make Obamacare premiums rise.

She said she got assurances from McConnell that the Senate would pass two pieces of bipartisan legislation to control health-care costs.

As of Thursday, Republican leaders were scrambling to win over Corker, who is concerned about budget deficits generated by tax cuts. A mechanism designed to win his vote was ruled unworkable under Senate rules on Thursday.

The current bill is not expected to include a tool to substitute for the fiscal "trigger" sought by Corker.

The nonpartisan Joint Committee on Taxation estimated Thursday that the plan would fall $1 trillion short of paying for itself, even after economic growth is taken into account. While GOP Senate leaders like Majority Whip John Cornyn, R-Texas, and John Thune, R-S.D., downplayed the findings, Corker pushed for a way to make up for the budget hole.

Senators are also weighing whether to add back the alternative minimum tax, which the chamber's initial plan scrapped.

In a statement Friday, Flake said he advocated for a package "that is both fiscally responsible and promotes economic growth." He said he sought assurances about eliminating the "$85 billion expensing budget gimmick" and obtaining a "firm commitment" about a legislative solution for protections for young immigrants protected by the Deferred Action for Childhood Arrivals program, which President Donald Trump ended.

He did not address the JCT's deficit estimate in his statement.

Republicans, who hold 52 seats, can only lose two votes and pass the bill if all Democrats and independents oppose it. They only need a simple majority, including a tiebreaking vote from Vice President Mike Pence, under special budget rules.

— CNBC's Ylan Mui contributed to this report