Trump personally pushing GOP leaders to use tax bill to undermine Obamacare
By Mike DeBonis and Damian Paletta November 3
House Republicans grappled Friday with the difficulty of turning their new tax plan into law, making a change that would make the proposal’s tax cuts for individuals less generous and entertaining a controversial proposal from President Trump to use the tax bill to repeal a central element of the Affordable Care Act.
Republicans changed the tax overhaul, which was announced Thursday, to cut $81 billion from the tax breaks it would provide to individual taxpayers. The move was made as lawmakers realized their initial effort would run up against the $1.5 trillion in total borrowing over a decade that Congress had authorized to finance the tax cut plan.
Party leaders also took a preliminary step to study Trump’s proposal to include language in the tax bill that would scrap the Affordable Care Act’s individual mandate, a change nonpartisan analysts say would save the government more than $400 billion over a decade but would also leave 15 million more Americans without health insurance.
Republicans released their proposed overhaul of the personal and corporate tax code on Thursday after months of negotiations, but Friday’s last-minute changes showed how challenging it would be to finalize the law by year’s end.
The decision to reduce benefits for individual taxpayers threatens to reinforce perceptions the bill is tilted toward helping the wealthy and corporation at the expense of middle-class Americans. 2:34 What's in the House GOP tax plan?
House GOP leaders on Nov. 2 proposed legislation that would overhaul the U.S. tax code. (Monica Akhtar/The Washington Post)
Republicans plan to save the $81 billion over a decade by changing the way the bill measures inflation, a shift that would move taxpayers into higher-tax brackets more quickly and probably hit middle-class taxpayers harder than the very wealthy.
Undermining the Affordable Care Act through a tax overhaul, meanwhile, would probably draw the same type of opposition that earlier efforts did in the Senate, dooming several such attempts to repeal what some call Obamacare earlier this year. Many in Congress say such an effort would destroy Republicans’ chance of passing major legislation this year.
Still, under heavy pressure from Trump, House Ways and Means Committee Chairman Kevin Brady (R-Tex.) said he would ask the Congressional Budget Office to assess the implications of repealing the individual mandate as part of the tax overhaul, the first step toward including the proposal in the bill.
“The president feels very strongly about including this at some step before the final process,” Brady said at a Friday event hosted by Politico. “He’s told me that twice by phone and once in person.”
Brady also suggested he was unlikely to ultimately adopt the change Trump had personally pushed him to make, noting the possibility such a change would sink the bill’s hopes in the Senate.
“Importing health care into the tax reform debate has consequences, especially when the Senate has yet to produce 50 votes on anything related to health care that I’m aware of,” Brady said. “Clearly you’re bringing a whole new element into pro-growth tax reform.”
Numerous White House officials believe attaching changes to the Affordable Care Act to the tax package would be a terrible idea, potentially dooming the entire tax bill, according to several people with whom the officials have spoken but who were not permitted to disclose the White House strategy.
Trump remains enamored with the idea, driven by conversations with Sen. Tom Cotton (R-Ark.) and Sen. Rand Paul (R-Ky.), who are aggressively promoting it.
House conservatives are pushing — gently, for the moment — to include the mandate’s repeal in the tax legislation.
“It’s good policy. It’s the right thing to do,” Rep. Jim Jordan (R-Ohio), a leader of the GOP’s hard-right bloc, said Friday. “I don’t know why we wouldn’t.”
Brady said other additional, “more substantive” changes to the bill are coming Monday, when the Ways and Means Committee starts a multiday meeting to debate the bill and potential changes to it.
Broadly, the GOP tax bill would sharply lower the corporate tax rate from 35 percent to 20 percent and cut income tax rates on all levels of income below $1 million. It would also expand some targeted tax benefits, particularly for corporations. To offset the revenue lost because of those cuts, the bill would also eliminate deductions individuals and businesses have relied on for decades — changes that promise to spark both internal tumult in the GOP and intense lobbying pressure from powerful industries and interest groups.
Some changes were immediately controversial, especially a plan to limit a provision in current tax law that allows homeowners to deduct interest payments made on their mortgages.
But there were indications Friday the sharp internal divisions over a separate proposal to scale back an existing break that allows individuals to deduct tax payments made to state and local governments from their federal tax liability could be easing. The bill would still let taxpayers deduct up to $10,000 in property taxes, though it would eliminate the ability to deduct any state income tax paid.
That compromise appears to have appeased many of the initial holdouts. While a handful of Republican members from New York and New Jersey said they would oppose the bill as written, one key member who had negotiated a compromise with leadership declared Friday that he was satisfied.
“There are a number of us in the high-tax states that I’ve talked to that realize, we just a got a huge win,” said Rep. Tom MacArthur (R-N.J.).
Democrats on Friday continued their criticism of the bill, painting it as a giveaway to corporations and the wealthy that would balloon the deficit while providing limited benefits to the middle and working class.
According to an analysis of the original bill from the nonpartisan Joint Committee on Taxation, the initial Tax Cuts and Jobs Act directed about 21 percent of its cuts to individuals of all income levels. Meanwhile, businesses reaped about 68 percent of the benefit, while a planned elimination of the estate tax — which applies only to the wealthy — would make up 11 percent of the overall revenue reduction. The changes Brady proposed Friday would further tilt the bill’s distribution of tax cuts toward corporations.
WASHINGTON — The Federal Communications Commission voted on Thursday to dismantle rules regulating the businesses that connect consumers to the internet, granting broadband companies the power to potentially reshape Americans’ online experiences.
The agency scrapped the so-called net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. The federal government will also no longer regulate high-speed internet delivery as if it were a utility, like phone service.
The action reversed the agency’s 2015 decision, during the Obama administration, to have stronger oversight over broadband providers as Americans have migrated to the internet for most communications. It reflected the view of the Trump administration and the new F.C.C. chairman that unregulated business will eventually yield innovation and help the economy.
It will take weeks for the repeal to go into effect, so consumers will not see any of the potential changes right away. But the political and legal fight started immediately. Numerous Democrats on Capitol Hill called for a bill that would reestablish the rules, and several Democratic state attorneys general, including Eric T. Schneiderman of New York, said they would file a suit to stop the change.
Several public interest groups including Public Knowledge and the National Hispanic Media Coalition also promised to file a suit. The Internet Association, the trade group that represents big tech firms such as Google and Facebook, said it also was considering legal action.
The commission’s chairman, Ajit Pai, vigorously defended the repeal before the vote. He said the rollback of the rules would eventually benefit consumers because broadband providers like AT&T and Comcast could offer them a wider variety of service options. His two fellow Republican commissioners also supported the change, giving them a 3-to-2 majority.
“We are helping consumers and promoting competition,” Mr. Pai said. “Broadband providers will have more incentive to build networks, especially to underserved areas.”
The discarding of the net neutrality regulations is the most significant and controversial action by the F.C.C. under Mr. Pai. In his first 11 months as chairman, he has lifted media ownership limits, eased caps on how much broadband providers can charge business customers and cut back on a low-income broadband program that was slated to be expanded to nationwide carriers.
His plan for the net neutrality rules, first outlined early this year, set off a flurry of opposition. The issue has bubbled up occasionally for more than a decade, with the debate getting more intense over the years as digital services have become more ingrained in everyday life.
Critics of the changes say that consumers will have more difficulty accessing content online and that start-ups will have to pay to reach consumers. In the past week, there have been hundreds of protests across the country, and many websites have encouraged users to speak up against the repeal.
In front of a room packed with reporters and television cameras from the major networks, the two Democratic commissioners warned of consumer harms to come from the changes.
Mignon Clyburn, one of the Democratic commissioners, presented two accordion folders full of letters protesting the changes, and accused the three Republican commissioners of defying the wishes of millions of Americans by ceding their oversight authority.
“I dissent, because I am among the millions outraged,” said Ms. Clyburn. “Outraged, because the F.C.C. pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers.”
Brendan Carr, a Republican commissioner, said it was a “great day” and dismissed critics’ “apocalyptic” warnings.
“I’m proud to end this two-year experiment with heavy-handed regulation,” Mr. Carr said.
During Mr. Pai’s speech before the vote, security guards entered the meeting room at the F.C.C. headquarters and told everyone to evacuate. The commissioners were ushered out a back door. The agency did not say what had caused the evacuation, other than Mr. Pai saying it had been done “on advice of security.” The hearing restarted a short time later.
Despite all the uproar, it is unclear how much will eventually change for internet users. Major telecom companies like AT&T and Comcast, as well as two of the industry’s major trade groups, have promised consumers that their experiences online would not change.
Mr. Pai and his Republican colleagues have echoed the comments of the telecom companies, which have told regulators that because of the limits to their business imposed by the rules, they weren’t expanding and upgrading their networks as quickly as they wanted.
“There is a lot of misinformation that this is the ‘end of the world as we know it’ for the internet,” Comcast’s senior executive vice president, David Cohen, wrote in a blog post this week. “Our internet service is not going to change.”
But with the F.C.C. making clear that it will no longer oversee the behavior of broadband providers, telecom experts said, the companies could feel freer to come up with new offerings, such as faster tiers of service for online businesses willing and able to pay for it. Some of those costs could be passed on to consumers.
Those experts also said that such prioritization could stifle certain political voices or give the telecom conglomerates with media assets an edge over their rivals.
Consumer groups, start-ups and many small businesses said there have already been examples of net neutrality violations by companies, such as when AT&T blocked FaceTime on iPhones using its network.
These critics of Mr. Pai, who was nominated by President Trump, said there isn’t enough competition in the broadband market to trust that the companies will try to offer the best services. The rule changes, they believe, give providers incentive to begin charging websites to reach consumers.
“Let’s remember why we have these rules in the first place,” said Michael Beckerman, president of the Internet Association, the trade group. “There is little competition in the broadband service market.”
Dozens of Democratic lawmakers, and some Republicans, have pushed for Congress to pass a law on the issue.
One Republican commissioner, Mike O’Reilly, said he supported a law created by Congress for net neutrality. But he said any law should be less restrictive than the 2015 rules, protecting the ability of companies to charge for faster lanes, a practice known as “paid prioritization.”
Any legislative action appears to be far off, however, and numerous online companies warned that the changes approved on Thursday should be taken seriously.
“If we don’t have net neutrality protections that enforce tenets of fairness online, you give internet service providers the ability to choose winners and losers,” Steve Huffman, chief executive of Reddit, said in an interview. “This is not hyperbole.”
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