Sen. Ron Johnson (Wis.) on Wednesday said he would oppose the Senate GOP’s tax package, becoming the first Republican senator to stand against the top legislative priority for his party.
Johnson said he couldn’t back the bill unless it was changed to help “pass-through” businesses that he said take a backseat to corporations in the measure as written.
“These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind,” he said in a statement. “Unfortunately, neither the House nor Senate bill provide fair treatment, so I do not support either in their current versions.”
Johnson has long argued that pass-through businesses would be treated less favorably than corporations under the GOP tax bills. Pass-through businesses have their income taxed through the individual income tax rates, rather than paying the corporate rate.
A GOP tax framework this fall would have included a maximum 25 percent tax on pass-through businesses, but that was not included in the Senate bill.
Despite Johnson’s statement, Republicans generally appeared to have momentum on the tax bill.
The House seems set to approve its tax-reform measure on Thursday, while Senate Republicans were coalescing around their new bill, which now includes the controversial repeal of ObamaCare’s individual insurance mandate.
Sen. Susan Collins (R-Maine) is the only GOP senator publicly voicing concerns about the individual mandate provision, saying it was a “mistake” to mix the issues of tax reform and health care.
“This is going to be difficult, and I just don’t know why they had to complicate it by bringing up the [Affordable Care Act],” Collins said.
She didn’t say she would vote against the package, however, and even if she does, Republicans could still clear the package through the Senate if they can keep the number of defections to two and have Vice President Pence to break a tie.
Johnson’s support also does not appear unattainable.
The Wisconsin senator previously announced opposition to the GOP’s ObamaCare repeal bill earlier this year before voting with his party in a series of votes, and Senate Majority Whip John Cornyn (R-Texas) appeared confident he could be reeled in.
“Good news: Senator Johnson will work with colleagues with a goal of improving the bill to a form he can support,” he said on Twitter, reacting to Johnson’s statement.
Two other Republicans to watch are Sens. John McCain (Ariz.) and Lisa Murkowski (Alaska), who were both no votes in July on ObamaCare repeal.
“I want to see the whole package before I decide,” McCain said repeatedly on Wednesday.
Murkowski said she was busy with legislation to allow drilling in the Arctic National Wildlife Refuge (ANWR) and has yet to focus on the tax bill.
The Alaskan senator might be less likely to vote against the tax bill given its link to drilling in ANWR, a top priority for Murkowski. The GOP budget asked the Senate Energy and Natural Resources Committee, led by Murkwoski, to find $1 billion in revenue to help pay for tax reform. The Congressional Budget Office says ANWR will bring in $1 billion, so it’s possible it could be added into tax reform to meet the $1 billion mark.
Democrats ripped Republicans over the decision to inject the mandate issue into the tax fight on day three of the Senate Finance Committee markup of the bill.
“This tax bill is now officially a health-care bill,” said Sen. Ron Wyden (Ore.), the panel’s ranking Democrat.
Throughout the markup, Democrats repeatedly cited an analysis from the nonpartisan Congressional Budget Office finding that repealing the mandate would increase the number of people without health insurance by 13 million in 2027 and increase average premiums by about 10 percent in most years compared to baseline projections.
Collins told reporters that she presented data to her GOP colleagues on Wednesday that shows that some middle-income individuals and families would see insurance premium spikes from the mandate’s repeal that would be greater than the value of their tax cuts.