White House looks past conservatives on
tax reform - to Democrats
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[March 27, 2017]
By Lindsay Dunsmuir and Doina Chiacu
WASHINGTON (Reuters) - Fresh off a defeat
on U.S. healthcare legislation, the White House warned rebellious
conservative lawmakers that they should get behind President Donald
Trump's agenda or he may bypass them on future legislative fights,
including tax reform.
The threat by White House chief of staff Reince Priebus to build a broad
coalition on tax reform that could include moderate Democrats came as
the Republican head of the tax-writing committee in the House of
Representatives said he hoped to move a tax bill through his panel this
House Ways and Means Committee Chairman Kevin Brady said his committee
had been working on tax reform in parallel with the failed healthcare
"We've never stopped working," Brady told Fox News' "Sunday Morning
Futures with Maria Bartiromo." "We will continue to make improvements."
Brady said the committee planned to move on the bill in the spring. He
said he wanted the House blueprint to be the basis for Trump's tax
reform plan rather than have competing versions from Treasury and the
Investors on Wall Street worry the healthcare bill's defeat bodes poorly
for tax reform. Equities have rallied since Trump's election partly on
expectations of tax cuts. Economic growth would be more modest without
fiscal stimulus and U.S. equity index futures fell to a six-week low on
Both Trump and Priebus have scolded hardline conservatives who rejected
legislation backed by the White House to replace the 2010 Affordable
Care Act, known as Obamacare.
Speaking on "Fox News Sunday," Priebus held out the possibility of
working with moderate Democrats as well as Republicans to pass other
aspects of Trump's agenda, such as his proposed budget, the revamp of
the tax code and a renewed effort at healthcare reform.
"If we can come up with a bill that accomplishes the goals of the
president with Republicans alone, we'll take it and we'll move forward
with it," Priebus said.
But he added: "I think it's more or less a warning shot that we're
willing to talk to anyone. We always have been and I think more so now
In an embarrassment for Trump, who had campaigned for the White House on
what he said were his skills as a dealmaker, the healthcare bill was
pulled from the floor of the House of Representatives on Friday because
it failed to draw enough support from within Trump's Republican Party.
Objections from members of the conservative House Freedom Caucus and
from moderate Republicans left leaders short of the votes needed for
passage, with Democrats unified in opposition.
Trump failed to win over the Freedom Caucus lawmakers despite courting
them intensively. Outside conservative groups such as the Club for
Growth and Heritage Action for America that are closely aligned with the
Freedom Caucus had strongly opposed the Republican healthcare bill and
urged lawmakers to reject it.
In a tweet on Sunday morning, Trump lashed out at both the Freedom
Caucus and the conservative groups, saying their actions had left
"Democrats smiling in D.C."
Priebus said it was a "real shame" that conservative lawmakers decided
not to get behind the healthcare bill.
"And I think the president is disappointed in the number of people he
thought were loyal to him that weren't," he said.
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President Trump leaves after a dinner at Trump International Hotel
in Washington. REUTERS/Yuri Gripas
MIDDLE-CLASS TAX CUT
Trump has put tax reform at the top of his legislative agenda now
that the healthcare bill has failed.
Priebus said Trump was not backing off his view that the tax reform
bill needed a border tax. He also said that the measure would
include a middle-class tax cut that he said might help to attract
votes from moderate Democrats.
In a sign that not everyone in the Freedom Caucus was in line with
its approach and a positive signal for Trump as he looked ahead to
tax reform, U.S. Representative Ted Poe, a Texas Republican, said he
had resigned from the group.
"In order to deliver on the conservative agenda we have promised the
American people for eight years, we must come together to find
solutions to move this country forward," Poe said in a brief
statement. "Saying no is easy, leading is hard."
Senate Democratic leader Chuck Schumer criticized Trump over his
handling of the healthcare bill and said Republicans would face
roadblocks from conservatives on other issues.
"They're going to repeat the same mistake they made on Trumpcare
with tax reform," Schumer told ABC's "This Week."
He urged Trump to go a different path: Reject the Freedom Caucus and
work with Democrats.
"If he changes, he could have a different presidency," Schumer said.
"He's going to have to tell them he can't work with them and we'll
certainly look at his proposals. But it's going to be guided on our
Republican Representative Mark Meadows, chairman of the Freedom
Caucus, said on Sunday he was optimistic on tax reform and that his
group could support a plan that is not revenue neutral.
"So, tax reform and lowering taxes, you know, will create and
generate more income," he said. "And so we're looking at those,
where the fine balance is. But does it have to be fully offset? My
personal response is 'no.'"
Another Freedom Caucus congressman, Jim Jordan, rejected
fingerpointing over the collapse of the health bill.
"Instead of doing the blame game, let's get to work," he said on
"Fox News Sunday."
(Additional reporting by Jessica Toonkel and Jennifer Ablan in New
York; Writing by Caren Bohan; Editing by Andrew Hay and Peter
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