Georgia’s two Republican U.S. senators are planning to back their party’s tax overhaul, despite an official analysis showing the proposal would add $1 trillion to federal deficits even after accounting for economic growth they say will occur because of the measure.
Both David Perdue and Johnny Isakson have been viewed as safe “yes” votes for GOP leaders for the duration of the tax debate, and they signaled Friday that they would stick with the plan even after it hit some last-minute snags the previous evening.
Perdue downplayed new estimates from Congress’ nonpartisan tax analyst, the Joint Committee on Taxation, that showed the legislation would fall short of paying for itself, as leaders have promised.
"I know it's a flawed model," he said about the JCT report on Friday, hours before the Senate was expected to tee up final votes on the proposal. "Having lived abroad and having run these multinational companies, I know that what we've just done is going to be extremely stimulative for the economy."
The JCT’s analysis said the GOP tax bill would expand the economy some $458 billion over 10 years but would not cover its full $1.4 trillion price tag. Its estimates caused some of Perdue’s deficit hawk colleagues, including Bob Corker of Tennessee and Jeff Flake of Arizona, to balk Thursday evening.
Perdue, a former Fortune 500 CEO, has spent his nearly three years in the Senate railing about what he sees as the country's debt crisis, and he often falls in line with Corker on issues pertaining to the $20 trillion national debt. But on Friday he said many of the assumptions used by the JCT were faulty and that the Senate should still pass the tax bill as written.
“We always have the opportunity to come back and adjust,” he said. “I believe the time is right for regulatory pullback, and that’s what we’ve done … and a revision, finally, after 30 years of our archaic tax code, and that’s what we’re about to do tonight.”
Perdue was on hand Wednesday evening as Vice President Mike Pence sought to win over a handful of Republican colleagues who were undecided on the proposal, and he eagerly jumped into frenzied last-minute negotiations Thursday evening.
Isakson was also steadfast in his support. The third-term Republican, who is a member of the tax-writing Finance Committee, said supporters and opponents of the plan would read what they wanted into various analyses of the tax bill, but that to him it was “pro-consumer, pro-middle class, pro-business.”
“Tax debates are funny because whoever’s debating makes the rules,” he said in an interview Thursday. “It’s all in the eyes of the beholder. The fact of the matter is that it’s good for average Americans. It’s good for average Georgians.”
Their comments came as GOP leaders worked feverishly to win back Flake and a handful of other wavering senators, and on Friday afternoon it appeared the road had been cleared for a final vote.
Democrats continued to mount a wall of opposition. On Thursday and Friday they pointed to the JCT analysis as proof that the GOP’s effort was ill-advised.
“The independent referee has essentially contradicted the unicorn, magic growth fairy analyses,” U.S. Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, told reporters Thursday.
Both Isakson and Perdue insisted the GOP plan would benefit Georgia's middle class, despite analyses showing the greatest dividends going to the wealthy and business interests. They played down reports about the impact of some corporations, including Atlanta-based Coca-Cola, planning to turn over their financial gains from the tax bill to their shareholders rather than increasing wages for workers or creating jobs.
“Coca-Cola stock is held by most retirement funds in Georgia, most investment funds in Georgia,” Isakson said. “The average American who has a pension, who’s saving on a 401(k) or an (individual retirement account), is probably invested, to a certain extent, in the stock market. Any time dividends go up because companies are paying them, that’s a benefit to every IRA and 401(k).”
The state’s teacher pension system had more than $300 million in Coca-Cola stock as of the end of fiscal 2016. It’s unclear how much it would benefit from the tax bill.
Isakson a few weeks ago put out a press release touting a conservative think tank’s estimate that the bill would mean thousands of new jobs in Georgia, without mentioning the potential stock benefits.
Education groups aren’t crowing about the potential gain in their pension’s value. The Georgia Association of Educators, one of the state’s largest teacher groups, said the tax plan would trigger massive spending cuts to schools that could mean 12,500 jobs cut and overcrowded classrooms.
“It is irresponsible to put funding for public education in Georgia at risk,” said the group’s president, Sid Chapman.
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