Ted Cruz Says Tax Reform May Not Happen Until 2018

Tax reform is at risk of becoming another Trump administration will-o’-wisp, a mysterious shining object forever just out of reach.

Like the promised wall along the southern border and the replacement of Obamacare, tax reform was supposed to be one of the major accomplishments of the first year of the Trump administration. Now it is looking like it might slip into next year.

Senator Ted Cruz told CNBC this morning that it would take “at least a couple of months” for the Republicans to come to an agreement on tax reform. Since the GOP majority is so narrow in the U.S. Senate and the Democratic Party is in #resist everything mode, Republicans cannot afford to lose more than a vote or two to get anything passed.

Although every Republican lawmaker on Capitol Hill says he or she supports tax reform, the details divide the party. The leadership in the House and the Senate has signed off on the framework it agreed with the Trump administration but some more conservative members worry that it could raise taxes too much. Senator Bob Corker has taken the role of leader of the deficit hawks, expressing his intention to vote against any bill that would expand the deficit, as any serious tax cut is bound to do. Lawmakers from high-tax states like New York and Connecticut are pressuring the administration to drop proposals to end the deduction for state and local taxes.

Most Republicans on Capitol Hill remain hopeful that a deal can be worked out. Instead of ending the deduction for state and local taxes, this could be capped so that only the wealthiest taxpayers would be impacted. Deficit hawks might be placated by promises to take up spending cuts or entitlement reforms next year. Raising the child tax credit could alleviate concerns that tax reform could inadvertently raise taxes on middle-class Americans.

“I do think every Republican wants to get to yes,” Cruz said on CNBC.

But that will take time. And with Congress always eager to close up shop for an extended holiday recess, there are not that many weeks left to hammer out a deal that satisfies the fractious Republican caucus.

Cruz said he expects tax reform to be done by “late this year or early next year.”

That is not what Republican voters were promised. It is not what the Trump administration aimed for. But it is probably the best that can be done so late in 2017.