Senate Democrats offer Republicans help on tax reform - with conditions

[August 01, 2017]  By David Morgan

WASHINGTON (Reuters) - U.S. Senate Democrats offered to work with Republicans on a bipartisan tax reform package on Tuesday but only if it does not cut taxes for the wealthy, add to the federal deficit or allow Republicans to enact legislation on their own.

The conditional offer may not attract immediate response from Republicans. But it adds to growing signs of interest in bipartisan cooperation since the collapse of Republican healthcare legislation in the Senate last week.

In an Aug 1 letter to President Donald Trump and Republican leaders in the Senate, 45 lawmakers led by Senate Democratic leader Chuck Schumer said a bipartisan effort would raise wages for workers, grow jobs, promote investment and modernize the tax system for U.S. businesses.

"We are writing to express our interest in working with you on bipartisan tax reform," said the letter, which then cited "prerequisites" for Democratic participation that Republicans would likely find hard to swallow.

Trump, along with Republicans in the Senate and House of Representatives, has called for major tax cuts for businesses and individuals, saying that lower tax rates would drive the economy and grow jobs.

Senator Orrin Hatch, Republican chairman of the tax-writing Senate Finance Committee, told Reuters on Monday that bipartisanship may be necessary to ensure that tax reform succeeds but blamed Democrats for slowing down the legislative process.

In Tuesday's letter, Democrats said bipartisan tax reform should offer no relief for the wealthy, citing Treasury Secretary Steven Mnuchin's assertion last November that there would be no absolute tax cut for the upper class.

The United States Capitol is seen prior to an all night round of health care votes on Capitol Hill in Washington, U.S., July 27, 2017. REUTERS/Aaron P. Bernstein -

"We hope you agree. Tax reform cannot be a cover story for delivering tax cuts to the wealthiest," the Democrats said.

The Democrats also demanded that Republicans abandon their strategy of passing tax legislation in the Senate with a simple majority under a parliamentary procedure called reconciliation.

Republicans control the Senate by a slim 52-48 margin and say they need reconciliation to avoid a Democratic filibuster. They were unable to pass healthcare legislation last week, even with a simple majority.

Democrats also said they would not support deficit-financed tax cuts, which some Republicans view as a viable option.

Forty-three Senate Democrats and two independents signed the letter. Absent were the names of three Democrats facing reelection next year: Heidi Heitkamp of North Dakota, Joe Donnelly of Indiana and Joe Manchin of West Virginia.

(Reporting by David Morgan; Editing by Cynthia Osterman)

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