Senate grapples with tax cut plan’s impact on U.S. deficit

WASHINGTON (Reuters) – U.S. Senate Republicans will grapple on Friday with the possibility of adding a tax increase to sweeping legislation meant to cut taxes on businesses and individuals, aiming to win support from fiscal conservatives worried about the bill’s impact on the federal deficit.

With a mandatory 20 hours of Senate debate nearing expiration, the Republican lawmakers, who control the chamber, could move to a final vote late in the day after a procedural vote starting at 11 a.m. EST (1600 GMT) and a potentially chaotic “vote-a-rama” on amendments offered by both Republicans and Democrats.

Republicans were still wrangling behind the scenes over how to raise $350 billion or more in taxes over 10 years to prevent their legislation from ballooning the federal deficit if the proposed cuts fail to generate the expected economic growth.

Senate Republican leader Mitch McConnell and others were also working on deals to win support from party members who want larger tax breaks for non-corporate pass-through businesses, a bigger child tax credit for families, and a $10,000 deduction for state and local property taxes.

Despite the hurdles, rank-and-file Republicans were still optimistic that they could approve the bill this week and agree this month to final legislation with the House of Representatives, which their party also controls.

“This is the big enchilada,” said Senator Johnny Isakson of Georgia. “We’ve still got a chance to do something good, and I‘m going to try and do it.”

Since taking office in January, President Donald Trump and his fellow Republicans in Congress have passed no major legislation. Their bill would be the biggest overhaul of the U.S. tax system since the 1980s.

Success is crucial to Republican political prospects in the November 2018 elections, when the party will fight to keep control of the Senate and the House of Representatives.

But the effort stumbled on Thursday when Republicans acknowledged that Senate rules would not permit them to add a mechanism to trigger tax increases in coming years if the bill fails to boost the economy enough to generate sufficient revenues to pay for tax cuts.

Senator Bob Corker and other Republicans concerned about the deficit impact had demanded the trigger in exchange for their support. On Thursday, the nonpartisan Joint Committee on Taxation released a report saying the legislation would add $1 trillion to the deficit over the next 10 years, even with tax-driven…

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