- The Washington Times - Monday, July 31, 2017

The White House signaled Monday that President Trump would rather have a big tax cut that increases economic growth — even if it means having to accept temporary changes that would expire after a decade.

“We are most interested in making sure the economy is growing,” Marc Short, the White House’s chief legislative liaison, told reporters after a tax event at the Newseum.

Mr. Short also laid out an “aggressive” timetable for congressional action, saying he anticipated that legislation would be moving through the House in October and the Senate in November.

“So that, I think, is an aggressive schedule, but that is our timetable,” Mr. Short said during the event.

Congressional Republicans have said they want to pass comprehensive tax reform in 2017, but Mr. Short’s proposed time frame on Monday now gives them informal benchmarks to hit — or blow through.

As they move on from a failed push to overturn Obamacare to an overhaul of the tax code, Republicans are increasingly trapped by the budget math, with their desire for big across-the-board tax rate cuts constrained by lawmakers’ inability to pay for them.

Some deficit hawks are saying a balanced package that doesn’t increase the government’s debt is the most important factor, but the White House is less focused on that. Mr. Trump’s top aides have been hesitant to outline specific policies, afraid of angering important constituencies early in the debate.

That’s what happened to House GOP leaders, who floated the idea of a border adjustment tax that would have been slapped on imports. Republicans said the additional revenue could be pumped back into the budget, creating space for major tax rate cuts.

But retailers and importers mounted a major public relations offensive and made the border tax idea poisonous, forcing House Speaker Paul D. Ryan and Ways and Means Committee Chairman Kevin Brady to nix the idea last week.

Republicans have said they’ll try to cut other loopholes and deductions in order to find money to lower rates, but even there they’ve already taken off the table two of the biggest deductions — mortgage interest and charitable giving.

House GOP leaders have proposed axing the deduction for state and local income taxes paid, but have run into opposition from Republicans from higher-tax blue states such as New York and New Jersey.

Mr. Short said that carve-outs for retirement income are also part of the conversation, though the White House said earlier this year that retirement savings would be protected under their plan.

Mr. Short also said Monday that President Trump will continue to push for a 15 percent corporate tax rate, down from the current level of 35 percent. The lower rate would also apply to small businesses currently taxed as individuals, which often face a top rate of close to 50 percent.

But Senate Finance Committee Chairman Orrin G. Hatch, a key tax-writer, told Reuters on Monday that Mr. Trump’s 15 percent rate is “very unlikely” and that it would be “kind of miraculous” to get the rate down to even 25 percent or less.

The Joint Committee on Taxation has estimated that a 1 percent across-the-board increase in the corporate tax rate alone translates to about $100 billion in revenue over a 10-year period.

Mr. Short ruled out raising anyone’s tax rates.

“Raising taxes is not a formula for growth, so I don’t think that you will see us looking to raise rates on any particular individual or level,” he told reporters.

Under fast-track budget rules Republicans plan to use, they must make a choice: If their reforms are to be permanent, they cannot add to the deficit over the next decade. If they do add to the deficit, they must expire at the end of 10 years.

A joint statement last week from House, Senate and White House leaders called for a plan that places a “priority” on permanence, leaving them a bit of wiggle room they could very well need as the costs of what they want to do add up.

Mr. Short, along with Treasury Secretary Steven T. Mnuchin, had appeared at an event hosted by Americans for Prosperity and Freedom Partners, two advocacy groups that are part of the Koch brothers’ political network.

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