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White House Hopes Tax Overhaul Will Give Republicans A Political Win


Chalk up yesterday as a terrible, horrible, no good, very bad day for President Trump and his agenda. Republicans pulled the plug on their latest effort to repeal the Affordable Care Act, which was a key campaign promise of the president's. And then in Alabama, Trump's choice for an open Senate seat lost. It's the other candidate, Roy Moore, who's headed to a general election. Now the White House is looking for a win. And the place they're looking is the next item on the Republican agenda. That would be overhauling the tax code. President Trump is going to outline his proposals later today. And here now for a preview is White House Director of Legislative Affairs Marc Short. He's on the line from the White House.

Good morning.

MARC SHORT: Good morning, Mary Louise. Thanks for having me on.

KELLY: We are glad to have you on. Thanks for taking the time.

Before I get to taxes, I want to ask about health care. At the beginning of this week, you were quoted all over the place, including on this show, saying you were confident this bill would pass, saying it would come to a vote this week. What happened?

SHORT: Well, we're certainly disappointed that right now the American people will not get relief from Obamacare. I think that over the last few years what we've seen are promises that costs would come down, and instead, most states have seen costs increase by a hundred percent or more and some cases even 200 percent or more. There were promises about being able to keep your insurance plan, and yet today, 45 percent of the country, roughly 1,400 counties, have only one insurer left, which means it's in essence a monopoly. We thought a better approach was to push the central planning out of Washington, D.C., that in many cases what we've learned is that the notion that Washington, D.C., knows best is proven wrong, and we wanted states to have more flexibility. And unfortunately, we didn't get there.

KELLY: Let me ask you about something the president is just tweeting this morning. He's tweeting about health care. He's talking about seeing very positive signs and says we're going to have a health care vote but not for Friday. What positive signs are you tracking?

SHORT: I that think there were some senators who were on the fence on the Republican side who grew more accustomed and comfortable with the block-grant approach, in pushing decisions out of Washington to their individual state capitals. But I think that there was ultimately concerns on process, that they felt they needed more time on this, they wanted to get through committees, and they wanted to look at having a vote later on that would bring this - the Graham-Cassidy concept back.

KELLY: So bottom line, you are not giving up on repealing Obamacare. You're just kicking it down the road a little bit.

SHORT: I don't know if it's kicking it down the road. I think the president has never given up. Even after the failed effort this summer, he continued at work with Senator Graham and Senator Cassidy. It's a promise he made to the American people, and he's going to look to deliver on that promise.

KELLY: Let me turn you to taxes. We're going to get this proposal rolled out today. We'll hear some details from the president later today. Can you do everything the president wants to do without blowing up the federal deficit? Can you?

SHORT: We think that we can because in many cases, the tax code has become something that special interests have provided so many deductions, particularly for the highest earners and for corporations, things that the average American doesn't have access to. When you eliminate those deductions, it does raise significant revenue that can be used to help lower the tax rate for the middle-income individuals across our country and to reform the corporate code. We believe that the corporate code is so outdated that many jobs have left America, and we want to bring them back home.

KELLY: But some of the specific elements we are hearing are going to be in this plan are, for example, you mentioned the corporate tax rate, that that is going to come way down. That would mean a lot less revenue coming in.

SHORT: Again, that does mean significantly reduction in federal revenue, but it also means more jobs, which will increase revenue. When there are more Americans paying taxes because they have jobs, more revenue will come in.

KELLY: By the way, one of the sticking points in the negotiations has been reported to be just how low the corporate tax rate should go. The president has been holding out. He wants to push it way down to 15 percent. Did that make it into this proposal?

SHORT: The president has campaigned on a 15 percent. It's what his preference is. I think that right now because of the concerns that you've raised about how far the deficit spending can go, I think that Congress will probably settle at a rate closer to 20 percent. But through the markup process...

KELLY: Can you confirm that that's what we're going to hear today, it's going to land at 20 percent?

SHORT: I'm going to let the president confirm that when he speaks this afternoon. But I think that - I think through the markup process in Congress, we'll continue to push to get it as low as we can.

KELLY: Democrats are already drawing red lines. They say they won't support cutting the individual income tax rate for top earners, saying they won't do anything that's going to add to the deficit. Are you counting on any Democrats backing this plan?

SHORT: We hope we can earn Democrats' support on this plan. As you know, Senator Donnelly from Indiana will be traveling with the president today. And Senator Heitkamp traveled with us to North Dakota a couple of weeks ago. And we believe that they, too, recognize how outdated the corporate tax code is, and we hope that we can earn their support.

KELLY: I want to get one quick question in to you on Alabama and the vote results that came in last night. How much of a setback is that for the president? Does it open the floodgates for other primary challengers?

SHORT: I don't know if it opens other floodgates. I think that there's often too much extrapolated from an individual race. But I think the president's excited to go campaign for Roy Moore. He said that he would do that if Roy Moore won. As you know, Roy Moore did not really campaign against the president. Roy Moore ran a race against more the Washington establishment here than he even did against Luther Strange. So I think we look forward to working with Roy Moore when he gets here.

KELLY: The president erased tweets this morning that he'd written in support of his candidate, Luther Strange. Why?

SHORT: I don't know. I'd have to ask him.

KELLY: You don't know why. Is he trying to erase this kind of from the history books?

SHORT: No. I mean, I think - I think you're overreaching there, Mary Louise. I think he very publicly went down to support Luther Strange, and and he was proud to stand by him. But as I mentioned, we - the president's also looking forward to working with Roy Moore, and he's promised to campaign for him.

KELLY: All right. That's Marc Short, White House director of legislative affairs. Thanks so much for taking the time.

SHORT: Thanks for having me on.

KELLY: All right. Listening in to that was NPR's White House correspondent Tamara Keith, and she is on the line now. And, Tam, let me pose just one quick question to you, which, as we heard, Marc Short there say that the president is not giving up on health care, that this could come to a vote, just not Friday. How is that likely to work?

TAMARA KEITH, BYLINE: It will be more difficult because Friday - actually Saturday is a deadline that ends what's known as the reconciliation process. It's this budget trick that they've been using that meant that they only needed 50 Republican votes plus the vice president. After that, they're going to need 60 votes, and there are only 52 Republicans, so it gets immensely more challenging. And as for taxes - the other thing that they're now moving onto - don't let anyone tell you that taxes are going to be easier than health care was. Yes, Republicans like to cut taxes, but overhauling the tax code is not easy. The last time Congress was able to do it was 1986, and they have tried many times since.

KELLY: NPR's White House correspondent Tamara Keith, thank you.

KEITH: You're welcome. Transcript provided by NPR, Copyright NPR.