How the Trump tax law passed: Dealing with a health care hangover

The Republican Party was in disarray.

It was the summer of 2017 and the GOP’s seven-year quest to repeal ObamaCare had failed spectacularly despite the party having control of the White House and Congress.

{mosads}President Trump blamed GOP leaders, specifically Senate Majority Leader Mitch McConnell (R-Ky.). Trump went so far as to suggest that McConnell should step aside if tax reform also faltered. McConnell countered that Trump’s frustration was due to “excessive expectations.”

Under the initial GOP legislative timetable, health care would be done in the spring, tax reform by August and then Republicans would look to pass an infrastructure bill. Speaker Paul Ryan (R-Wis.) went so far as to say this could be the “most productive presidency and Congress in our lifetime.”

This is part two of a seven-part series on how President Trump’s tax law passed Congress and how it is playing out in the battle for Congress in the 2018 midterm elections.

Perhaps no moment played a bigger role in Republicans’ successful effort to pass a tax-cut bill than Sen. John McCain’s (R-Ariz.) thumbs-down that doomed the ObamaCare repeal efforts.

“When health care failed in the Senate so publicly, several times, I think that those were the toughest days because it appeared to the rest of the world that Republicans couldn’t unite behind our agenda. Those were tough days,” House Ways and Means Committee Chairman Kevin Brady (R-Texas) said.

Headlines that ran at the time battered the GOP: “Why Republicans Can’t Govern,” “Donald Trump is a Lame-Duck President,” “Why Republicans Can’t Get Anything Done.”

“But in looking back,” Brady said, “those were probably the days that contributed the most to tax reform’s success, because the White House, the House and Senate just became determined that we would not fail in tax reform. And so, what was one of the toughest periods turns out to be one of the best driving forces to get this done.”

Some Republicans claimed the party made a mistake by moving on health care before taxes.

Treasury Secretary Steven Mnuchin disagrees.

“In hindsight, we wouldn’t have been ready,” Mnuchin told The Hill, citing the myriad of complicated issues that had to be dealt with and pointing out that tax reform had been 30-plus years in the making.

 

A different approach

The House and Senate worked separately on health care, with Trump sometimes clashing with leading Republicans on how to pass the bill. On tax reform, the White House, House and Senate formed a group called the “Big Six” to get broadly on the same page ahead of the release of legislation. The Big Six, which started meeting in spring 2017, consisted of Mnuchin, Ryan, Brady, McConnell, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Gary Cohn, who was then the White House’s top economic adviser.

Republican lawmakers were often at odds with each other during the health-care process. But with taxes, lawmakers tried to be more constructive than destructive.

The day that the Big Six released its framework in September 2017, House Republicans held a retreat at the National Defense University. Brady and Rep. Peter Roskam (R-Ill.) walked lawmakers through the proposals. Republican members then had a chance to speak on open microphones and leading Republicans braced for criticism.

“Open mics among House Republicans, they tend to be a disaster. It’s some version of finger-pointing and admonition and somebody says, ‘You guys,’ and so forth. It just never ends well,” said Roskam, who headed the Ways and Means tax subcommittee last year.

“By contrast … this was terrific. People came to the microphones with thoughtful comments, real critique, legitimate concerns, issues that they were raising,” he added.

Roskam felt that the constructive nature of the comments indicated that lawmakers really wanted to vote for a tax bill.

“That’s when I was convinced this was a likelihood,” Roskam said.

Former Rep. Pat Tiberi (R-Ohio), who served on the Ways and Means Committee at the time, said the failure on ObamaCare repeal contributed to tax cuts being a partisan endeavor.

“If we would have done, in my opinion, an infrastructure bill at the beginning of last year that would have been likely bipartisan, we could have probably got a different type of health-care bill and a different type of tax bill,” he said. “At that point in time, when we failed to repeal and replace ObamaCare, it couldn’t pass the Senate, the tax bill was going to be partisan. It just was at that point.”

 

Health care foes, tax allies

Many conservative groups had been against congressional Republicans’ proposals for replacing ObamaCare. They would have preferred for Congress to quickly pass a bill repealing it, with a delayed effective date, and figure out a replacement at a later time.

But they still wanted to work with Republican leaders on tax cuts.

When the initial House GOP health-care bill was pulled from the floor in March 2017, FreedomWorks vice president of legislative affairs, Jason Pye, bought a Diet Coke from a vending machine in the Longworth House Office Building. He left it for Brady, a big fan of the soda, with a note.

“I had a FreedomWorks postcard with me and I just wrote on it, ‘We’re all in for tax reform’ and signed my name, left my card, left him the Diet Coke,” Pye said.

After the ObamaCare repeal efforts failed, representatives of the Club for Growth found it easier to talk to House and Senate leadership.

“I think they realized that they can’t do what they did with ObamaCare and expect to succeed,” said Andy Roth, vice president of government affairs with the Club for Growth.

Leadership wanted to ensure that they had buy-in from conservatives before the bill came out.

“It was almost surreal … how friendly they were,” Roth said.

The day before the House bill was originally scheduled to be released, Ryan met with conservative groups and let them ask questions about the bill.

In the Senate, all Republicans ended up voting for the final measure, including the three Republicans — Sens. McCain, Susan Collins (Maine) and Lisa Murkowski (Alaska) — who had voted “no” on the ObamaCare repeal. McCain died last month at the age of 81.

The House-passed health-care measure was rejected by 20 Republicans, but only five of the 20 also rejected the tax-cuts bill. The ObamaCare bill cleared the lower chamber 217-213 while the final tax bill cleared by a more comfortable margin — 224-201.

Rep. Ryan Costello (R-Pa.) said GOP leadership did a better job of communicating and addressing concerns on tax reform.

“To be honest with you — because I was knee-deep in the health care stuff — and they didn’t do a bad job on health care, but there were there were lessons learned,” he said.  

“And I think more attention was paid to each individual member throughout the process,” he said. “I don’t want to say there was handholding, but any member that had stuff that they needed to address, there was individual time taken.”

Costello voted against the ObamaCare bill, but ultimately backed the tax-cut measure.

Members of The Hill’s staff who have worked on this tax reform series over the past several months are Alexander Bolton, Juliegrace Brufke, Timothy Cama, Jordain Carney, Bob Cusack, Niv Elis, Naomi Jagoda, Mike Lillis, Peter Sullivan, Megan R. Wilson and Melanie Zanona.