U.S. House speaker says tax plan entering most difficult phase: Reuters interview

By David Morgan

WASHINGTON (Reuters) – U.S. House of Representatives Speaker Paul Ryan said on Wednesday that Republican plans to enact sweeping tax cuts are entering their choppiest waters as corporate lobbyists try to pressure lawmakers to protect tax breaks.

In an interview with Reuters, Ryan urged Congress to move quickly to enact tax legislation, saying the country needs faster economic growth soon and the overhaul effort will begin to face its toughest challenges.

Lobbyists, often referred to as “K Street” after the downtown Washington street that houses many lobbying firms, will soon swarm Capitol Hill to defend tax breaks for special interest groups, said Ryan, who is the highest-ranking Republican in Congress.

“When the details come, that is when you’re going to see K Street coming to Congress. And that’s why this hasn’t been done for 31 years,” said Ryan, looking back to the country’s last major tax changes under President Ronald Reagan in 1986.

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While the broad parameters of the tax proposal have been made public, detailed legislation is not expected to be revealed until next week.

Securing passage by Congress of the tax plan would give President Donald Trump his first major legislative win since he took office in January. Republicans control the White House and both chambers of Congress and are under pressure to deliver on their election campaign promises.

A key element of the Trump plan is to slash the corporate income tax rate to 20 percent from 35 percent.

Democrats have painted the tax plan as a gift to the rich and to corporate America that would cause the federal deficit to balloon and add to the $20 trillion U.S. national debt.

CHOPPY WATERS

Ryan referred to white-water rafting to describe how the tax overhaul effort is entering its toughest phase, which he compared to fast-flowing Class 5 rapids on a river.

“We’ve been going through Class 3 rapids, which is a pleasant ride. It’s nice. Everybody pretty much stays in the boat and it’s pretty good. But we’re about to go through Class 5 rapids, which is the biggest rapid you can go through,” he said.

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He called on Republican lawmakers to stand firm as details of the legislation are hammered out.

“We’ve got to make sure that everybody stays in the boat and we get the boat down the river,” Ryan said.

He urged Congress to pass tax legislation quickly to ensure what he said would be the resulting economic growth, and dismissed concerns that tax cuts could expand the federal deficit.

“We do have a sense of urgency. We want the economic growth to apply to everybody, we want middle income taxpayers to finally get a break,” he said.

“We believe that we’ll get faster economic growth,” Ryan said. “We don’t anticipate a big deficit effect from this tax reform because we will broaden the base and lower the rates, plug loopholes and get faster economic growth.”

Ryan has previously said he wants the House to pass the tax bill by the Nov. 23 U.S. Thanksgiving holiday. He predicted on Wednesday that some Democratic lawmakers would eventually back the tax plan.

“At the end of the day, I do believe some Democrats will end up voting for this thing,” Ryan said. “It’s hard for me to see why – no matter what party you’re from – you’d want to vote against this.”

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At least some Democratic support could end up being needed in the Senate, where Republicans hold only a 52-48 majority. Party dissent in the Senate led to Republicans’ failure this summer to push through an overhaul of the healthcare system that Trump and the party leadership had pushed for.

(Reporting by David Morgan, Amanda Becker and Doina Chiacu; Writing by Susan Heavey and Alistair Bell; Editing by Kevin Drawbaugh, Will Dunham and Frances Kerry)

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