How the Trump tax law passed: GOP adds sweeteners

All along, GOP Sen. Lisa Murkowski knew she was going to get what she wanted.

The Alaska Republican had been trying to for more than 15 years to open up the Arctic National Wildlife Refuge (ANWR) to drilling. And at some point, the provision was going to be added to the tax-cut bill.

{mosads}“Well,” she said in an interview when asked if she was trying to hide ANWR, “let’s just put it this way. I didn’t want to start off the year with a t-shirt that says, ‘My goal this year is to open up ANWR. Watch me.’ That’s bringing unnecessary, undue attention, and it’s not what you want to do.”

Environmental groups had successfully blocked prior ANWR bills, but this time they were caught flat-footed.

“A lot of this boils down to the fact that proponents of drilling in the refuge were intentionally quiet about it,” said Drew McConville, senior managing director for government affairs at the Wilderness Society.

This is part five 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 election.

(Part One: Breaking the gridlock)

The success of the Alaskan delegation means a portion of the largest protected wilderness area in the United States will soon be open to drilling, despite decades-long opposition from environmental groups who argued it would put wildlife and pristine habitat at risk and exacerbate climate change. Proponents say the opening will allow billions of barrels of oil and natural gas to be recovered, further lowering U.S. dependence on foreign sources and creating thousands of jobs.

Murkowski, who heads the Senate Energy and Natural Resources Committee, was one of three Republicans who had killed the GOP effort to repeal and replace ObamaCare in the summer of 2017.

But on taxes and drilling she was all in and devised a “methodical” game plan. It included meeting, alongside Sen. Dan Sullivan (R-Alaska), with President Trump in March 2017 to get him on board.

Trump later said, “I never appreciated ANWR. I really didn’t care about it,” until an oil industry friend called him. In campaign-style speeches, Trump routinely notes that Republicans had repeatedly failed to pass ANWR before he was sworn into office.

Another facet of the strategy was conferring with Senate Majority Leader Mitch McConnell (R-Ky.) to make sure ANWR drilling could get attached to a budget reconciliation bill so it would only need 51 votes.

But it definitely didn’t include making a big, public showing of the process.

ANWR critics cried foul, claiming Republicans weren’t transparent. But to supporters, it was shrewd legislating.

 

‘It just causes me to clench my teeth’

Murkowski also takes issue with framing her strategy as sneaky or saying that she “slipped” the measure into the larger tax bill. For one thing, there were only two titles to the bill: one for the tax overhaul and one to mandate drilling rights lease sales.

“It just causes me to clench my teeth,” she said. “ ‘Slip in.’… We went through the full committee process: introduction of a bill, hearing before the Energy Committee, full markup before the Energy Committee, having it on the floor. There was a motion to strike, where it was discussed, debated, voted on. And they lost, we won.

“So, the suggestion that I ‘slipped it in,’ to this day, stuns me.”

For Sullivan, the focus was on lobbying his fellow senators and making sure that the 51 votes were there to pass the provision.

“I was just doing what I call relentless advocacy, on the floor, in meetings, with my Senate colleagues,” he said. It included a short PowerPoint presentation, often printed on paper that he carried around, and could often be spotted on the Senate floor or elsewhere.

(Part Two: Dealing with a health care hangover)

The presentation made the case that drilling in ANWR is minimally disruptive, drillers have experience elsewhere in the state with similar restrictions and more oil production would be good for national security, among other arguments.

“I was in charge of all this in Alaska, so I kind of know what I’m talking about,” said Sullivan, who previously was Alaska’s commissioner of natural resources and its attorney general.

“We had been able to get certain senators who had been either wobbly or opposed to ANWR previously to vote with us every time,” he said, naming the late Sen. John McCain (R-Ariz.), a previous opponent of ANWR drilling, and Sen. Joe Manchin (D-W.Va.) as victories. Manchin didn’t vote for the final tax bill, but he did vote with the GOP against Democrats’ attempts to remove the ANWR provision.

On the House side, Rep. Don Young (R-Alaska) led vote-wrangling efforts, but he said it wasn’t much more difficult than it had been before.

“I knew I had the votes to pass it,” he said. “I passed this out of the House actually 14 times, so it’s not a new issue.”

Young said he knew the harder effort would always be in the Senate, due to the filibuster rules.

ANWR has been central to Murkowski’s time in the Senate since arriving in 2002. And before that, her father, Frank, consistently fought to permit oil drilling there. He left to be the Last Frontier’s governor in 2002 and then immediately appointed his daughter to his seat.

Majorities of Alaskans have supported allowing drilling in the relatively small Coastal Plain area of ANWR — slightly smaller than Delaware at 1.5 million acres — for four decades, since Congress first raised the specter of oil production there but left it an open question that only legislators could answer.

 

Optimism on the left

Even with the larger tax bill fight at hand, environmentalists had guarded optimism that they would be able to block ANWR drilling, either by getting it stripped from the legislation or by tanking the entire bill.

Multiple times in the past — most notably in 1995 and 2005 — greens and Democrats were able to rally enough Republican support to stop drilling in the Coastal Plain, which, in addition to being highly sought after for oil and gas, hosts vital wildlife ecosystems.

Democrats were nearly united against ANWR drilling and Republicans in both the House and the Senate had publicly stated misgivings, including a letter that a dozen moderate House Republicans signed asking congressional leaders to remove the provision.

That came in addition to shaky support for the tax bill itself in the GOP, particularly from coastal-state lawmakers who fought against proposals to reduce certain deductions.

And polling consistently showed that, on a national scale, ANWR drilling was unpopular.

“We did have hope that common sense would prevail and this would get removed if the tax bill moved forward, or that the tax bill wouldn’t move forward, in part because this was adding to the controversy surrounding the bill,” said McConville, of the Wilderness Society.

But they were wrong.

“That said, we do recognize both in hindsight that the deck was stacked politically against this effort,” McConville added.

(Part Three: Obstacles quickly emerge)

Perhaps thanks to Murkowski’s strategy, congressional Democrats also had trouble getting the public to focus on ANWR amid the tax-bill fight and other major headlines involving Trump, environmental policy and more.

“It was such a small part of this huge fight over taxes. It got lost in the bigger issues,” said Rep. Jared Huffman (D-Calif.), one of the leading opponents of ANWR drilling in the House. “It was very hard for the wilderness and environmental advocates to even be heard on an issue like this.”

 

Finger-pointing

Behind the scenes, Democrats blamed activists for dropping the ball.

“There were a lot of hard feelings among staff and principals,” a Democratic aide said of outside groups. “This has been their life’s work to some extent.”

The green groups had a multi-pronged strategy against the ANWR provision, including hundreds of thousands of dollars of advertising in moderate Republicans’ districts, opinion polling and rallies.

In the end, however, environmentalists had banked on a small handful of Republicans to put the bill in jeopardy, including Sen. Susan Collins (Maine) and a group of about a dozen in the House led by Reps. Ryan Costello (Pa.) and Dave Reichert (Wash.).

“In both the House and the Senate, if we were going to get this out of there, we needed Republicans to do it,” McConville said. GOP leaders “were moving the tax bill knowing they didn’t need the votes of Democrats and they were not listening to Democrats.”

Key to the strategy was a letter greens pushed in November, in which a group of House Republicans asked leadership to exclude ANWR from the bill.

“Candidly, I think we thought we had more chance in the House than we did in the Senate. And so we were hoping for more of the so-called moderate Republicans to stand up, just because we thought that the margins would have been a little tighter potentially in the House, given some of the other items in the tax bill, like with the state and local tax issues,” said Alex Taurel, deputy legislative director at the League of Conservation Voters and another leading figure in the fight against ANWR drilling.

“We thought there were some dynamics there to make passage a little more dicey, and if we could pull over a few more based on opposition to the Arctic Refuge, that was something we were trying to do,” Taurel said.

Twelve Republicans ended up signing the letter.

Half of them voted for the House’s original version of the tax bill — which didn’t have ANWR drilling — and half voted against. When the Senate sent the bill back to the House for a final vote with the ANWR provisions included, those dozen lawmakers voted the same exact way.

The lawmakers who voted for the bill said they do feel strongly about stopping ANWR drilling, and are open to voting for later legislation to drop it, but the tax bill’s benefits outweighed ANWR.

“There’s plenty of bills you vote for where you don’t like one provision,” Costello said. “You’ve got to measure the sum of all the parts, not just one piece of it.”

 

Addressing ObamaCare in the tax bill

Many Republicans initially didn’t like the idea of addressing ObamaCare in the tax bill.

The GOP had failed to repeal ObamaCare earlier in the year and now some in the party wanted to revisit health care by seeking to repeal the program’s individual mandate as part of the pending tax-cut package.

When Sen. John Thune (R-S.D.) would bring up the idea in GOP leadership meetings, he said it received “a pretty lukewarm reception.”

But eventually, he said, the proposal was discussed with enough members that lawmakers realized inclusion would not derail the bill and could instead bring needed savings.

“The pushback at least initially to it had to do more with just we don’t want to do anything that adversely affects the prospects for tax reform, and so it took a lot of convincing that this in fact was something that was additive,” Thune said.

The House did not include mandate repeal in its tax bill but Freedom Caucus Rep. Mark Meadows (R-N.C.) said he always sensed mandate repeal would be added later.

“Including it in the House version would put forth another political dynamic too early that didn’t need to happen and so it was a conscious choice to not put it in the House version,” Meadows said.

Sen. Rob Portman (R-Ohio) was initially skeptical of including repeal of the mandate, Thune said. But as he became convinced, he played a key role in bringing along Collins, the most moderate Republican who had help torpedo ObamaCare repeal.

“I think he started out in kind of the same place they were, sort of reluctant initially to get on board with that particular idea, and I think when he did then it was like the others [came around, too],” Thune said. 

(Part Four: Bipartisanship wasn’t an ingredient)

In late October, Sen. Tom Cotton (R-Ark.), a leading proponent of including mandate repeal, spoke with President Trump by phone about the idea. A few days later, Trump tweeted his support.

In mid-November, Thune and Sen. Pat Toomey (R-Pa.) pitched mandate repeal to a meeting of GOP senators on the Senate Finance Committee on a Monday night. The next day, after the idea was discussed among all GOP senators at their lunch, lawmakers announced the decision to include it.

Toomey said getting the repeal language in the bill was a heavy lift.

“The idea that we’re going to go back and revisit something that was central to that failure and import it into the tax bill was something that got a lot of resistance,” Toomey said.

But Toomey said he and Cotton quickly realized that Republicans weren’t opposed to the policy change. 

“We had done a lot of one-on-one discussion with members and hadn’t gotten any pushback,” Toomey said. “Tom made a very strong and persuasive pitch about how this is an important element of delivering on our promise that we have just failed on. This is how we redeem ourselves, to a significant degree, on a very important promise we made to the American people.”

Toomey said Collins needed extra persuading.

“I had many conversations with her. I know Sen. Portman probably had more conversations with her,” he added.

Still, complications loomed.

 

A bad score for the GOP

A low point, Thune said, came when the Joint Committee on Taxation (JCT) released a score that counted mandate repeal as a tax increase — because if people dropped coverage they would no longer get tax credits to afford insurance. The new score came on the morning of the tax bill’s markup in the Finance Committee, and senators met that morning to debate how to proceed.

Eventually, they decided simply to power through, and point out that scoring was essentially an illusion, since anyone who wanted to keep the credit could.

Toomey acknowledged that adding the individual mandate repeal created “a lot of drama on the day of the markup” because of the JCT score.

“That created considerable consternation because the optics are terrible,” he added. “We knew the Democrats were going to say, ‘Look at this massive tax increase on the poorest Americans.’ ”

Some members of the GOP conference floated the idea of creating rebates for lower-income Americans to counter what on paper looked to be a tax increase for them.

Attempting to solve this problem with the government writing checks and sending money in the mail horrified Toomey.

“I almost had a heart attack,” he said.

Toomey said he and the majority of his colleagues instead decided to confront Democrats head-on over the issue at the markup.

“My argument was simple: ‘Guys, we all know this is not a tax increase. We’re not going to burn through tens of billions of dollars on some new giveaway program to solve a problem that’s not a problem. Let’s just confront it and call it what it is, and let’s take on the Democrats and let them make the case that a payment not going to an insurance company is a tax increase. Good luck with that,” he said.

Saturday: The lobbying frenzy

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.