House Freedom Caucus Chair Andy Harris (R-Md.) said Tuesday that the group would be releasing its own plan this week for achieving President Donald Trump’s tax priorities.
The plan, which the hard-right HFC wants to take up after a separate bill addressing border and defense initiatives, is a new speed bump in Speaker Mike Johnson‘s effort to unite fractious House Republicans around leadership’s own plan.
“The big tax bill is what we’re going to propose in our second step, and it’s going to be coupled with enough deficit reduction to make sure that the financial markets realize we’re serious about deficit reduction,” said Harris.
He cautioned that they wouldn’t necessarily be including all of Trump’s ideas, “because it’s unclear the president prioritizes all of them, but the ones that the president wants, plus the extension of the tax cuts, especially the ones that would result in economic growth.”
House leaders are scrambling to get GOP lawmakers to coalesce around their own plan for a single bill that would include border, energy and tax policies. The Freedom Caucus openly defied leadership by releasing its own plan focused on border and defense on Monday.
Harris’ announcement that the caucus would subsequently release a tax plan is similarly a snub to House Ways and Means Chair Jason Smith (R-Mo.), who as head of the tax-writing committee is responsible for compiling Trump’s tax priorities.
Meanwhile, GOP leaders indicated Tuesday morning that their plan could be taken up by the House Budget Committee as soon as Thursday, though significant questions remain about the tax portion of the sweeping agenda.
Specifically, lawmakers expect that Johnson’s new draft plan, outlined by POLITICO on Monday, will include a budget reconciliation instruction for Ways and Means that would dip below $4.7 trillion in deficit spending. That would barely give the committee enough breathing room to extend all the 2017 Trump tax cuts that are expiring at the end of this year, which the Congressional Budget Office estimates will cost around $4.6 trillion — let alone Trump’s other tax priorities.
The House Freedom Caucus plan would include an instruction for Ways and Means that would range between $5 to $5.5 trillion. However, it’s unclear if the spending cuts the group includes in its plan to offset the tax policies’ impact on the deficit would be acceptable to the rest of the conference.
Harris said he hopes to file a complete budget blueprint within the next two weeks, which would call for an extension of the expiring tax cuts and Trump’s other ideas to eliminate taxes on tips and overtime pay.
The GOP agenda needs to include “real deficit reduction,” Harris said, coupled with economic growth assumptions for the tax cuts that aren’t “unrealistic.” Republican leaders argue that their tax plans will stimulate economic growth that would offset a portion of the cost, though fiscal hawks want to be conservative with those estimates.
House Freedom Caucus member Ralph Norman (R-S.C.) added that while the extension of Trump tax cuts would be permanent under the group’s plan, some proposals like ending the federal income tax on tips would likely need to be shorter-term to pare back the cost of the bill.
Pressure is mounting on House GOP leaders to get their agenda together as Senate Budget Committee Chair Lindsey Graham (R-S.C.) prepares to mark-up the Senate’s plan on Wednesday. That bill would not include any of Trump’s tax agenda, saving that for a second measure later in the year.
“The question is, if they can’t come up to a resolution quickly, then again the House Freedom Caucus feels that they should do what the Senate is doing, pass a much smaller bill, get the president the border funds and some of the defense funds that he needs to secure the nation,” Harris said.
Meredith Lee Hill contributed to this report.
