Politics

How Marco Rubio forced the GOP’s hand on the child tax credit

U.S. Sen. Marco Rubio
U.S. Sen. Marco Rubio Getty Images

When Sen. Marco Rubio told reporters on Thursday that he would vote “no” on a tax overhaul bill without an expanded child tax credit, many congressional staffers, political observers and lawmakers from both parties thought the Florida Republican was blowing hot air, looking to appear as though he had leverage when he did not.

There was also speculation that Rubio had, by the time he started making noise, already received assurances that his problems would be addressed.

But behind the scenes, Senate Majority Leader Mitch McConnell was worried.

An aide to a Senate Republican member of the tax conference committee told McClatchy that earlier in the week, days before Rubio publicly said he was on the fence about the legislation, Florida’s junior senator paid a visit to McConnell, a Kentucky Republican. Sen. Tim Scott, a Republican from South Carolina and a point person on final negotiations, accompanied them.

In that meeting with McConnell and Scott, Rubio made his position clear. He would vote against the tax bill unless there was an expanded child tax credit that would net low-earners using the child tax credit a larger IRS refund if they owe little or no taxes.

“If you don’t fix this, I’m ‘no,’” the aide said Rubio told McConnell. “And it was a very hard ‘no.’”

Rubio’s threats to vote against the tax bill were very real, and leadership took them seriously.

A second source involved in the negotiations confirmed the meeting and Rubio’s position.

Still, House and Senate negotiators were reluctant to address Rubio’s demands. They had already agreed to a final deal on all elements of the tax overhaul legislation, in principle, and didn’t want to reopen negotiations.

Scott, who had helped secure an initial expansion of the child tax credit from $1,000 to $2,000 while the bill was still being debated by the Senate Finance Committee, lobbied on Rubio’s behalf inside the conference committee. An aide confirmed that Scott pushed conferees to continue negotiating throughout the day Thursday, culminating in the deal announced Friday.

Rubio had his own leverage to exert. Senate Republicans can only afford to lose three members and still pass their bill. Rubio and Sen. Mike Lee, a Republican from Utah, were both making their opinions known about the importance of expanding the child tax credit two weeks ago when the Senate was voting to advance its tax overhaul bill out of the chamber.

The two lawmakers even co-authored an amendment that would have expanded the child tax credit to $2,000 and made it fully refundable. It failed after other Republicans chafed at expanding the corporate tax rate from 20 percent to 20.94 percent to pay for the plan, but Rubio and Lee still played nice and voted in favor of the larger bill, giving leaders a sense that they would not take their fight further.

But then House and Senate negotiators proposed a 21 percent corporate tax rate to pay for a lower tax rate for high-earners, a higher corporate rate than Rubio proposed in his plan to give more money to lower- and middle-class families. And Rubio wasn’t happy.

“20.94% Corp. rate to pay for tax cut for working family making $40k was anti-growth but 21% to cut tax for couples making $1million is fine?” Rubio tweeted on Tuesday.

While Lee never said he would vote “no,” his dissatisfaction was also worrisome to leadership. Rubio made his opposition public on Thursday, and the prospect of failure in the Senate caused the negotiators to act. The $2,000 child tax credit’s refundable portion was raised from $1,100 to $1,400.

The tradeoff was enough to get Rubio’s support.

By Friday afternoon, Rubio was thanking Scott for his help. Scott, in turn, thanked Rubio for fighting.

For months, Rubio said that an expanded child tax credit was an important part of any effort to overhaul the nation’s tax code. Without it, he said detractors could credibly argue that the Republican-led House and Senate drafted the overhaul without lower- and middle-class families in mind.

“I’m not going to vote for an increase on the middle class,” Rubio said in October. “But we’re not going to get to that point. We’re not that crazy around here.”

Democrats are still expected to vote en masse against the Republican-led tax plan, but the last-ditch effort by McConnell and Scott to get Rubio’s support puts the bill back on track to be signed into law by President Donald Trump before Christmas.

“I think that we are going to be in a position to pass something as early as next week, which will be monumental,” Trump said on Friday.

Alex Daugherty: 202-383-6049, @alextdaugherty

Emma Dumain: 202-383-6126, @emma_dumain

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