by John Voskuil and Bloomberg News

The Senate tax bill is headed for a marathon debate this week as Republican leaders plan to hold a floor vote as early as Thursday -- but first, it has to go through the Budget Committee, where key GOP lawmakers are raising objections. Here are the latest developments, updated throughout the day: 

Corker Says He Has an Agreement on Trigger (2:41 p.m. Tuesday)
Republican Senator Bob Corker said before the start of a Senate Budget Committee meeting that he will vote to approve a tax measure because he has reached an agreement with Senate tax writers on a broad outline for a revenue trigger provision that he and other GOP senators are seeking.

He released no other details before the meeting, which was preceded by chants of “kill the bill” from a large crowd as Senator Bernie Sanders, the Vermont independent, entered the room.

The budget panel is scheduled to decide whether to send the tax legislation to the Senate floor. But Corker had said that before the vote, he needed to see a trigger provision that would prevent the bill’s tax cuts from increasing the deficit. -- Kaustuv Basu and Erik Wasson

U.S. Chamber Opposes Revenue-Trigger Idea (12:45 p.m. Tuesday)
The chief economist for the U.S. Chamber of Commerce said a proposal to insert a revenue trigger into the Senate tax bill “is a terrible idea.”

J.D. Foster, who also serves as the business group’s senior vice president for economic policy, questioned in an online article how officials would measure any shortfall that would activate the trigger, how the mechanism would respond to a recession and how it would operate if Congress passes additional tax legislation later.

Republican Senators Bob Corker of Tennessee, James Lankford of Oklahoma and Jeff Flake of Arizona have proposed amending the Senate bill to include a trigger that would raise taxes if the bill’s tax cuts fail to produce enough economic growth to avoid increasing federal deficits. The Senate bill is estimated to reduce federal revenue by $1.4 trillion over 10 years -- before accounting for any larger economic effects.

Lankford said Tuesday afternoon that he and others are still working on the basic design of the provision. He added: “we hope that it would never be used.” -- Sahil Kapur and Laura Davison

GOP Moderate Wants to Keep Property-Tax Break (12:11 p.m. Tuesday)
Republican Senator Susan Collins said she wants to retain an individual income tax deduction for state and local property taxes -- a change that would mirror a provision in legislation that has already passed the House.

Collins, a moderate from Maine, said she’s involved in talks to make changes to the Senate bill today. As written, the Senate legislation would repeal all of the deductions available for state and local income, sales and property taxes. Her proposal would retain the property tax break, but cap the deduction for them at $10,000 a year. The House bill contains the same cap.

Collins also said she would like to retain the existing top individual tax rate, which is 39.6 percent for those making $1 million or more -- another provision that would mirror the House bill. The Senate bill would cut the top rate to 38.5 percent.

Collins said she thinks the Senate bill isn’t popular because it hasn’t been fully explained to the public.

“I think it hasn’t been fully described, and I think some groups against it have mobilized, and they are selectively taking positions,” she said. “But there are also some provisions that need to be fixed.”

Collins has previously said that the Senate bill should drop its repeal of the Obamacare individual mandate -- a provision that’s estimated to save the federal government more than $300 billion over 10 years and lead to 13 million people without health coverage. -- Erik Wasson

GOP Senate Leaders Working on Changes to Bill (10:20 a.m. Tuesday)
Senate Republican leaders met with at least one lawmaker who wants changes to the chamber’s tax bill -- and they’re working out a number of issues in the legislation, Senator John Thune said Tuesday.

GOP leaders hope to have some resolution on various issues -- including a request to add a revenue trigger to the bill that would increase taxes if there’s not enough growth to cover the cost of its tax cuts for businesses and individuals -- by this afternoon, said Thune, the Senate’s third-ranking Republican leader.

Senator Bob Corker, one of three GOP senators seeking the trigger provision, emerged from a meeting in Senate Majority Leader Mitch McConnell’s office saying he was “hopeful” that senators could reach a deal before the Senate Budget Committee meets at 2:30 p.m. Tuesday.

“We’re working through the issue,” he said. He added: “There’s a lot of work to do right now.” -- Erik Wasson and Laura Litvan

Corker Seeks to Add Trigger Before Panel Vote (9:20 a.m. Tuesday)
Republican Senator Bob Corker, who’s seeking to build a revenue trigger into the Senate tax bill, said that projections about the bill’s effects on the larger economy are “sort of made up,” and Congress needs to protect against increasing the national debt.

“We do need to have this trigger issue worked out before the budget vote today,” Corker said Tuesday during an appearance on Fox News’s “Fox & Friends.” The Senate Budget Committee is scheduled to meet this afternoon to consider the tax bill.

The legislation is estimated to increase federal deficits by $1.4 trillion over 10 years before accounting for any growth effects, but its supporters say it would unleash enough growth to cover that cost.

“But what you want to make sure is that these projections are right,” Corker said. “These are all sort of made up, if you will.”

Corker, who plans to retire from representing Tennessee in the Senate after 2018, has asked the chamber’s tax writers to change the bill in order to build in provisions for tax increases if the measure doesn’t yield the growth they’ve promised. GOP Senators James Lankford of Oklahoma and Jeff Flake of Arizona also back the idea of a trigger.

“What I don’t want to do is lose my integrity and actually help hurt our nation and our children when we have $20 trillion in debt,” Corker said Tuesday, adding that he thinks the odds favor overall passage of the tax bill. “I don’t want to on the way out the door support something that I know is going to damage our nation.” -- Toluse Olorunnipa

Senate Bill In Limbo With Budget Panel Drama (4:00 a.m. Tuesday)
The Senate’s tax-cut bill faces a crucial committee vote Tuesday as Republicans try to push it through to full Senate passage by the end of the week.

Normally, the Senate Budget Committee vote on the tax legislation would be a mere formality -- but on Tuesday, at least two dissident Republican senators are trying to use the occasion to push their leaders to change the bill. Each of those votes is crucial; the panel is split between 12 Republicans and 11 Democrats, so a single Republican senator could block the legislation from going to the floor.

Senator Ron Johnson of Wisconsin wants a deeper tax cut for pass-through businesses -- and says he won’t vote for the bill as written. Senator Bob Corker of Tennessee wants a provision that would impose tax increases if the bill doesn’t generate enough economic growth to cover the $1.4 trillion in revenue losses it’s estimated to produce over 10 years.

“I’m not exactly sure what’s going to happen in committee, we’re working diligently to fix the problem,” Johnson told Wisconsin reporters on Monday, according to his office. “If we develop a fix prior to committee, I’ll probably support it but if we don’t, I’ll vote against it.”

As of Monday night, no deal had emerged. “We’re still negotiating, let’s put it that way,” said Senator John Thune, the chamber’s third-ranking Republican leader.

Corker said his potential “no” vote shouldn’t be a surprise. He has said he’d oppose any tax bill that didn’t pay for its tax cuts by creating enough economic growth. Now -- amid various independent findings that the bill would fall short -- he’s asking for a safeguard.

“This is not a threat,” Corker said, adding that he’s sticking to a pledge he made more than a month ago.

The fast-track procedure that GOP leaders are using to try to win passage with as few as 50 senators’ votes allows them to bring a tax bill that would comply with Congress’s 2018 budget to the floor and to protect it from any Democratic attempt to talk the bill to death. The budget instructed the Senate Finance Committee to write a tax bill that would add no more than $1.5 trillion in deficits over 10 years, and it instructed the Energy and Natural Resources Committee to produce a bill cutting deficits by at least $1 billion.

Both committees produced such bills earlier this month, and now the Budget panel is scheduled to meet to formally combine them into a single piece of legislation.

Corker showed during the committee vote on the budget itself that he was willing to use his leverage. He struck a deal limiting the deficit increase to $1.5 trillion in negotiations with fellow committee member Senator Pat Toomey that were brokered by Majority Leader Mitch McConnell and the White House. -- Erik Wasson and Kaustuv Basu

GOP Panel Member Threatens to Bottle Bill Up (5:24 p.m. Monday)
A Republican member of the Senate Budget Committee may not agree to vote the measure out of committee Tuesday, delaying its progress, according to statements he made Monday.

“I’m not exactly sure what’s going to happen in committee; we’re working diligently to fix the problem,” Senator Ron Johnson of Wisconsin told reporters from his home state Monday, according to his office. “If we develop a fix prior to committee, I’ll probably support it but if we don’t, I’ll vote against it.”

The budget panel has 12 GOP members and 11 Democrats -- meaning Johnson’s vote would be needed to advance the measure. Johnson has said he opposes the measure as written because it offers more tax advantages to corporations than to pass-through businesses, such as partnerships and limited liability companies. He’s seeking changes, but it’s not yet clear whether Senate leaders will be able to satisfy his demands.

Senate Finance Chairman Orrin Hatch, the chamber’s chief tax writer, said Monday evening that he’s concerned about the budget panel’s vote. “I’m very concerned about it,” the Utah Republican told reporters Monday. “I think we’ll be fine, but I am concerned, yeah.”

Hatch said he didn’t know if changes would be made before the budget panel’s vote, and wouldn’t comment on what any changes might be.

“It’s not going to be easy. This is going to be a tough, tough time,” Hatch said, adding that the current plan is still to vote a bill out of the Senate this week. -- Sahil Kapur and Erik Wasson

Bill Will Change on Senate Floor, Cornyn Says (4:35 p.m. Monday)
The Senate tax-overhaul bill will change before the chamber votes on the measure -- a vote that’s still planned for this week, Senate Majority Whip John Cornyn of Texas said Monday.

At least some of those changes will come on the Senate floor, said Cornyn, the chamber’s No. 2 Republican leader. It’s unclear precisely how the measure will evolve, said Senate Finance Chairman Orrin Hatch.

“It’s a little early to judge,” said Hatch, a Utah Republican. “It’s a little early to make predictions.”

Senate leaders are grappling with at least two significant demands from Republicans. Senators Ron Johnson of Wisconsin and Steve Daines of Montana have asked for more generous treatment for partnerships, limited liability companies and other so-called “pass-through” entities. Both have said they’d vote against the bill as written.

“We’re going to make them happy but we’re not sure we can do exactly what they want to do,” Hatch said of Johnson and Daines.

Meanwhile, GOP Senator James Lankford of Oklahoma said he’s in talks to create a trigger in the bill that might raise taxes if the cuts that are contemplated have the effect of increasing deficits. The official congressional scorekeeper has said the bill would boost federal deficits by $1.4 trillion over 10 years. Its proponents argue that the tax cuts would spur enough economic growth to make up the difference -- an assertion that various economists question.

Cornyn confirmed Monday that a deficit trigger mechanism is being discussed. “I think we understand their concern and we’re taking it seriously and trying to come up with a solution,” he said of Lankford and others.

Cornyn said he’s confident that Senate leaders will get the 50 votes they need from their 52-member caucus to approve the bill, and that he expects senators will vote to begin their floor debate Wednesday. That would keep them on track to vote on the bill by week’s end. -- Erik Wasson and Laura Litvan

GOP Holdout Seeks Bigger Pass-Through Break (3:08 p.m. Monday)
Republican Senator Ron Johnson of Wisconsin said he’s talking with Senate leaders about revising tax legislation to provide a more generous tax break to partnerships, limited liability companies and other so-called pass-through businesses.

He proposes paying for the change by eliminating corporations’ ability to deduct the state and local taxes they pay, Johnson said.

Johnson has said he’d vote no on the bill as it’s currently written because the measure offers major corporations a more generous tax cut than it offers to pass-throughs. The bill would provide such businesses -- which can range from mom and pop grocers to national law firms -- a 17.4% deduction on their business income. By comparison, the bill would cut the corporate tax rate to 20% from 35% beginning in 2019.

Johnson said he’s talking with Senate leaders about boosting the pass-through deduction to 20%. “I’d like to get to 25%,” he said in an interview.

Senate lawmakers also propose to entirely eliminate individual deductions for state and local taxes -- a measure that’s been controversial among GOP House members in high-tax states. Johnson’s proposal -- to also eliminate those deductions for corporations -- might only increase resistance from those members.

Johnson said the move would do more to “level the playing field” between corporations and pass-throughs. He said he and others are waiting for Congress’s Joint Committee on Taxation, which scores tax proposals, to show whether his proposal would pay for itself.

Meanwhile, President Donald Trump told reporters Monday afternoon that he anticipates a bill that Republicans will be proud of -- though he expects it will receive bipartisan support. Thus far, no Democrats have publicly said they’ll support the bill. -- Erik Wasson

Montana Senator Is Said to Oppose Current Bill (2:26 p.m. Monday)

Republican Senator Steve Daines of Montana opposes the Senate tax bill as written, a member of his legislative staff said Monday. His opposition may complicate its prospects for passage.

Daines is concerned on how the tax cuts in the measure would affect “Main Street” as opposed to big companies, said the staff member, who asked not to be named because of the matter’s sensitivity.

The Senate tax bill would cut the corporate tax rate to 20 percent from 35 percent. It would also offer smaller businesses -- that is, owners of partnerships, limited liability companies and other so-called pass-throughs -- a 17.4 percent deduction on their business income. Republican Senator Ron Johnson of Wisconsin has already said he’d vote no on the current bill because some pass-through entities wouldn’t get nearly as much tax relief as major corporations under the bill.

Senate Republican leaders need to assemble 50 votes from their 52-seat majority in order to pass the legislation. If they can’t win over both Daines and Johnson, they can afford to lose no other votes on the measure. -- Sahil Kapur

McConnell Is Said to Oppose Major Changes (1:05 p.m. Monday)

Senate Majority Leader Mitch McConnell’s aides say fundamental transformations to the tax bill that’s pending in the Senate won’t be considered, according to a person who attended a meeting with the staff members Monday.

Senators who want to see additional tax cuts or to restore particular tax breaks will be allowed to file amendments that contain mechanisms to pay for their plans, said the person, who asked not to be named because the discussion was private. McConnell’s aides met with representatives of various groups interested in the tax legislation, the person said. McConnell’s office didn’t immediately respond to a request for comment. 

At least two Republican senators are seeking substantive changes to the tax legislation. Ron Johnson of Wisconsin wants more generous tax treatment for partnerships, limited liability companies and other so-called pass-through businesses. And James Lankford of Oklahoma says he’s in talks to create a mechanism in the bill that would prevent a boost in U.S. debt -- perhaps by calling for tax increases if the cuts don’t pay for themselves.

The GOP controls only 52 seats in the Senate, and will need at least 50 votes to approve a bill in a vote that could take place as early as Thursday. Should a vote succeed, Senate leaders plan to move immediately to a conference committee with House members to try to reconcile differences in the legislation, the person said. -- Jennifer Jacobs

Senator Seeks Debt Shield That May Mean Hikes (12:09 p.m.)

Senator James Lankford, an Oklahoma Republican who has been withholding support for the Senate’s $1.4 trillion GOP tax-cut plan, says he’s in talks to create a mechanism in the measure that would prevent a boost in U.S. debt.

The mechanism under discussion might boost tax rates if the bill doesn’t result in a sufficient level of economic growth to cover the cuts, Lankford told reporters. The bill’s proponents say they’re confident it would produce additional annual growth of 0.4 percent -- though independent studies have questioned that assertion. 

Lankford, who has cited concerns over the bill’s impact on federal debt, declined to discuss whether he would favor increases in individual or corporate rates, or both, in such a plan.

He said the measure approved earlier this month by the Senate Finance Committee is being changed as it moves toward the Senate floor, adding that he still expects the full Senate to vote on the measure by week’s end. 

“The conversations have all been extremely productive,” he said, adding that he’s been discussing his ideas with other lawmakers over a Thanksgiving recess. “Nobody is pushing back. No one is saying, No we don’t want to do this.”

Lankford also indicated he would support a motion to bring the measure to the floor, a critical vote to begin debate even as some negotiations may continue. -- Laura Litvan

Kentucky’s Paul Gives Senate Another ‘Yes’ (10:56 a.m. Monday) 

Republican Senator Rand Paul of Kentucky threw his support behind the GOP tax-cut plan this morning, giving the effort a small jolt of momentum as party leaders begin the tough task of rounding up a handful of critical holdouts.

“I’m not getting everything I want -- far from it,” Paul wrote in an op-ed posted on the Fox News website. “But I’ve been immersed in this process. I’ve fought for and received major changes for the better -- and I plan to vote for this bill as it stands right now.”

Paul had been withholding support, in part because he wanted tax cuts across the board and he wanted cuts far greater than the $1.4 trillion in the Senate proposal. Yet he said today he’s encouraged by many of its provisions, including a repeal of Obamacare’s mandate that Americans have health insurance or pay a penalty. 

Paul indicated that his backing could be contingent on keeping the mandate repeal in any final bill, which might be a tall order. The House measure doesn’t include the individual mandate repeal, and some Republicans in both chambers object to the provision. That includes Senator Susan Collins of Maine, another GOP senator who has yet to back the Senate bill. 

“Will we keep our word and cut taxes?” Paul said in the op-ed. “Will we do what we campaigned on and repeal the Obamacare mandate? I will fight for both, and I look forward to ending the year keeping these important promises to the American people.” -- Laura Litvan

Senate Plans Tax Vote Amid Trump Sales Pitch (9:17 a.m. Monday)

The Senate may vote on its tax-cut legislation as early as Thursday as President Donald Trump signaled he will be more personally involved in the final push. 

With several Republicans publicly uncommitted to supporting the bill, Trump is scheduled to have lunch Monday at the White House with members of the Senate Finance Committee and Vice President Mike Pence. Attendees will include Republicans Orrin Hatch of Utah, the panel’s chairman; Pat Toomey of Pennsylvania; Rob Portman of Ohio; Tim Scott of South Carolina; and John Cornyn of Texas, according to the White House. 

“Senate Republicans will hopefully come through for all of us. The Tax Cut Bill is getting better and better,” Trump wrote on Twitter Sunday night. The president is also expected to head up to Capitol Hill on Tuesday to press Senate Republicans in person.

The dollar pared losses after Trump’s tweet. The Bloomberg Dollar Spot Index was down less than 0.1% as the euro and Canadian loonie relinquished gains against the greenback.

One potentially significant complication is that senators haven’t yet received an official estimate about the larger effects that the package of tax cuts for businesses and individuals would have on the U.S. economy.

The Congressional Budget Office reported on Sunday that Congress’s chief scorekeeper for tax legislation hasn’t been able to provide a quick-turn “macroeconomic analysis” of the Senate tax bill.

The lack of any official finding complicates arguments by the legislation’s backers, who say its package of tax cuts -- estimated to cost more than $1.4 trillion over a decade -- would actually pay for itself over time by generating economic growth. As Senate leaders hasten to gather and hold 50 votes from their thin, 52-seat majority, some lawmakers have already expressed reservations about the deficit impact. 

The absence of any official “dynamic score” also reflects the unusually rapid pace that GOP leaders have chosen in their push to approve the measure. If they vote Thursday, it will be just 11 days after the actual legislation first appeared -- during a week when both chambers were on recess.

Yet in a year in which Republicans controlled both chambers of Congress and the White House, many party members have said there’s pressure to deliver on at least one major legislative achievement -- the sort that has so far eluded Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.

The bill’s path to passage isn’t clear yet. Three Republicans -- Tennessee’s Bob Corker, Arizona’s Jeff Flake and Oklahoma’s James Lankford -- have raised concerns about the measure’s effects on the nation’s debt, and Corker has said he won’t support legislation that adds to the deficit. He has said he’d allow for “reasonable” estimates of economic growth.

GOP Senator John Thune of South Dakota said on “Fox News Sunday” that even a small uptick in growth “would cover the cost” of the tax bill. But so far, he and other Senate leaders lack official findings to back their assertions.

Lankford said Monday on Fox News that he wants to ensure a “debt backstop” -- “that we have a built-in process to be able to, if the numbers don’t come in correctly, to make sure that we do actually provide a way to guard against debt and deficit.” He said lawmakers are working on such a mechanism and that he thinks the bill will be passed before Christmas. 

On Tuesday, the Senate Budget Committee is scheduled to meet, and it may send the bill to the Senate floor. Two GOP panel members have emerged as potential sticking points. One of them is Corker and the other is Ron Johnson of Wisconsin, who wants more generous tax cuts for partnerships, limited liability companies and other so-called pass-through businesses. Senate leaders have said they want to address Johnson’s concerns.

The budget panel is expected to consider adding to the tax bill a provision that would authorize oil and gas development in the Arctic National Wildlife Refuge. The move -- long expected -- would be a boon for Alaska, the home of Republican Senator Lisa Murkowski.

Murkowski had been seen as a potential “no” vote on the tax legislation because of its proposal to end the “individual mandate” from the Obamacare law that requires people to purchase health insurance or pay a fine. But last week, she wrote in an op-ed for Alaska’s Daily News-Miner newspaper that she would support ending the mandate.

Doing so would raise roughly $318 billion by 2027, according to CBO estimates, because some 13 million people would drop their individual insurance -- and wouldn’t tap federal subsidies to help pay for it. Murkowski’s acceptance of the Obamacare provision in the tax bill may clear the way for her support, though Senator Susan Collins of Maine has also said she has concerns about the health-care provision.

What to Watch This Week:

On Tuesday, the Senate Budget Committee is scheduled to meet on the tax legislation at 2:30 p.m. The panel, which has 12 Republicans and 11 Democrats, could decide to send the tax bill to the Senate floor. Trump is also scheduled to attend the regular policy lunch held by Senate Republicans. If all goes well for GOP leaders, the Senate may begin floor debate, which would culminate perhaps Wednesday or Thursday in a “vote-a-rama”-- a chaotic session in which any senator can offer an amendment to the bill. Democrats would be expected to offer a variety of amendments designed to damage, delay or derail the measure -- which may lead to some political fireworks. The voting would probably take place overnight. If Republicans have the 50 votes they need, Senate leaders may call for a floor vote on Thursday or Friday.

Here’s What Happened Last Week:

The Senate Finance Committee released the text of its bill late on Nov. 20. Murkowski said on Nov. 21 that she won’t oppose the individual mandate provision in the tax bill, improving its chances of passage. The CBO reported that, so far there hasn’t been time to compile a macroeconomic study of the Senate tax legislation.

--With assistance from Toluse Olorunnipa, Laura Litvan, Jennifer Jacobs and Sahil Kapur.

To contact Bloomberg News staff for this story: John Voskuhl in Washington at [email protected]

To contact the editors responsible for this story: John Voskuhl at [email protected]

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