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With border adjustment gone, Republicans are finally united around tax reform. The price for the consensus, though, is that the ultimate tax reform package is bound to be less ambitious than what the GOP originally envisioned.

"Unfortunately we're not going to have fundamental reform and it will make it hard to get the rates down low," Republican California Rep. Devin Nunes told the Washington Examiner Friday. "There are still opportunities out there, they're going to be hard to achieve, but we're going to try and get there."

Nunes was the original author of legislation, later picked up by Ryan and the House Ways and Means Committee, on which Nunes sits, to throw out the corporate income tax altogether and replace it with a cash-flow tax.

Thursday's joint statement from Republicans didn't include many details, but it did explicitly rule out a cash-flow tax along the lines envisioned by Nunes.

Instead, the statement made clear, congressional Republicans will seek to lower tax rates as much as possible by paying for them by eliminating tax breaks. The tax base will stay the same, but will simply be broader.

The statement was enough to bring business on board.

On Friday, the Business Roundtable, a group of big business CEOs, announced a multimillion-dollar effort to help the tax reform effort through cable TV and radio ads.

Previously, business had been split. Retail groups fought the border adjustment out of fear that it could result in higher taxes for imported goods.

Also on Friday, the Koch network of political nonprofits threw its full weight behind tax reform, after working for months to kill border adjustment. Americans for Prosperity and Freedom Partners, two Koch-affiliated free-market groups, announced that they would hold an event Monday promoting tax reform with Treasury Secretary Steven Mnuchin and White House legislative director Marc Short. The group's volunteers also will make calls throughout the summer to lawmakers to push them to pass tax legislation.

Tim Phillips, the president of Americans for Prosperity, said that his group favors lowering tax rates for all businesses.

Yet, without a border-adjusted cash-flow tax, rates cannot go as low.

In a cash-flow system, companies would no longer have to perform hideously complex accounting to determine what their taxable income was each year. Instead, they would simply tally up money in minus money out a totally different tax base.

And when that tax is based on the destination of sales, using border adjustment, the base is larger than the current U.S. corporate tax base, to the tune of about $1 trillion more in tax revenue a year. With that revenue, House Republicans envisioned lowering the corporate tax rate to 20 percent, down from 35 percent now.

Republicans don't have a stated goal for the corporate tax rate, but several experts told the Washington Examiner that a target in the mid-20s would be a good outcome. Originally, Trump had set a goal of 15 percent.

"I think that's the central debate: How big is the tax reform going to be? How big are the tax reductions going to be?" Office of Management and Budget Director Mick Mulvaney said Friday in an interview with CNBC.

Without border adjustment, "it becomes more complicated," said David Schweikert, a member of the Ways and Means Committee. Without the revenue raised by border adjustment, the target corporate tax would be about 31 percent rather than 25 percent, he suggested.

Opponents who killed border adjustment "have an ethical obligation to step up" and propose ways to replace the lost revenue, he said just off the House floor Friday.

There won't be any easy replacements, however. Any break that lawmakers target for elimination would be fiercely defended by the industry or group that it benefits, the same way that retailers fought border adjustment.

"There's not some easy honey pot of money to go after," said Jon Traub, managing principal of Deloitte's Tax Policy Group and a former staff director of the Ways and Means Committee.

Any money lawmakers are able to raise to dedicate to rate cuts, he said, will involve "hand to hand combat, provision after provision."

But even getting to that outcome will be difficult.

And even harder will be including some of the bolder ideas, advanced by Ryan, meant to spur economic growth. Those include ensuring that reform is permanent, so that businesses can plan along 10- or 20-year timelines, and allowing companies to immediately write off all new investments.

The advantage of the vague joint statement is that "it leaves the experts and the taxwriters significant flexibility," said Jeff Kupfer, an adviser to Beacon Global Strategies and a former Bush Treasury official.

That flexibility, however, could undermine momentum for a comprehensive, permanent rewrite of the tax code.

Especially with their failure to pass legislation to repeal Obamacare, Republicans are "under tremendous pressure to get something done on taxes," said Marc Gerson, chairman of the law firm Miller & Chevalier and a former Ways and Means tax counsel. If they start to struggle to do the hard work of comprehensive tax reform, "you could see a pivot to more of a tax cut or a tax relief package."

That would be a letdown, from the perspective of Ryan and other House Republicans who have said that permanence is the goal.

In that sense, it's noteworthy that Thursday's statement said that Republicans would "place a priority" on permanence, but stopped short of saying that a permanent rewrite of the code would be a do-or-die goal.

Using the legislative process known as reconciliation, Republicans can pass a tax bill without Democrats. But under the procedure, a permanent change to taxes could not add to long-term deficits. Some Republicans would rather cut taxes deeply, even if that meant that the changes to the code would have to be temporary.

The statement also stopped short of endorsing "full expensing," or allowing companies to deduct all new investments from their taxable income in the year they are made. Under the current code, companies must depreciate investments over a course of years, according to a complicated schedule.

Ways and Means Committee Chairman Kevin Brady said Thursday that the goal remained full expensing. But he will face pushback on that priority, even with the new consensus.

Phillips said his group would be advocating rate cuts, as opposed to full expensing, both of which cost revenue. "We do think full expensing is not the right way to go, as it chooses a certain kind of economic activity to reward," Phillips said. He noted that start-ups and established companies make differing levels of new investments.

David Drucker contributed to this article.

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Republican tax reform: Less ambitious, more realistic - Washington Examiner

All eyes were on Sen. John McCain, R-Ariz., during the razor-thin skinny repeal vote, with eagle-eyed CSPAN watchers reading the tea leaves of his motions across the Senate floor.

But he wasnt the only star of the show.

Sens. Susan Collins, R-Maine, and Lisa Murkowski, R-Alaska, had adamantly opposed the bill repeatedly during the past month of debate on the issue.

And their "no" votes came before McCain's now-famous thumbs-down motion, officially sinking the bill.

It would be hard for the trio's home states to be farther apart, but they came together on the vote in a devastating way for the Republican Party at large in the wee hours of Friday morning.

Collins and Murkowski have been outspoken in their opposition to the Medicaid cuts, and Collins has come to the defense of Planned Parenthood as well.

In her statement following the vote, Collins stressed the importance of a bipartisan approach for a solution, writing that rather than engaging in partisan exercises, Republicans and Democrats should work together and address these vert serious problems.

And Murkowski posted a tweet, saying, This isnt about winning. This is about service to our state and service to our country.

McCain had not been as vocal about his opposition in the weeks leading up to the vote, having been away from Washington, D.C., for part of the debate. He underwent surgery to remove a blood clot near his eye on July 14 and doctors subsequently discovered a brain tumor, which was announced on July 19.

He returned to Washington on July 25 to cast the decision-making vote in a procedural motion that allowed Thursday night's debate on health care to continue.

In a statement released following his vote early this morning, McCain said that "from the beginning" he has believed that Obamacare should be repealed and replaced in order to lower costs, improve care and increase competition, he said "the so-called 'skinny repeal' amendment the Senate voted on today would not accomplish those goals.

While there was a round of applause -- largely from the Democrats in the Senate -- after McCain made that fatal vote early this morning, all three GOP senators have earned the ire of President Donald Trump.

This morning, he looped the three with the Democrats on Twitter, writing "3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let ObamaCare implode, then deal. Watch!"

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The 3 senators who sank the Republican health care push - ABC News

Protest against U.S. President Donald Trump in New York. Credit: Caitlin Ochs/Sputnik via AP

For me, and I imagine most Americans, the election of Donald Trump raised a host of disturbing questions. Now, six months into this new political era, all the questions but one have been answered: How are we going to rebuild ourpolitical system?

To say that I have been an outspoken Trump opponent would be an understatement. As a Republican candidate for the U.S. Senate, I came out against him early on. Still, immediately after the election I did say that I was willing to give him a chance.

By early February, however, any hope that Trump would become presidential had lapsed. Trump meant every word he said during the campaign. He is a protectionist, an isolationist and a nativist. He has the instincts of an authoritarian who would silence the mainstream media with new libel laws if he could.

I urged Republicans to directly oppose Trump, but to little avail. Today, there are two types of Republican politicians: enthusiastic Trump supporters, and those who submit through their silence. If you dare oppose Trump you are attackedand threatened with a primary opponent.

Republicans have abandoned traditional Reaganite policies such as free trade because their base voters agree with Trump. I have come to accept that I am now the one out of step with Republican voters. It truly is Trumps party now.

Even my hopes that Washington state Republicans could maintain their traditional moderate identity and work with Democrats to get big things done have largely been dashed.

To be sure, the gridlock and dysfunction in Olympia is not nearly as bad as it is in Washington, D.C. Significant bills were passed this year, including bills on paid family leave and greater protections for victims of sexual assault. But by Olympia standards, the 2017 session was a disaster. After three special sessions, the longest legislative meeting in state history, Olympia melted down in partisan rancor.

Republicans demanded that Democrats pass a bill on water rights in rural areas. When Democrats refused, Republicans retaliated by not passing the capital construction budget for the first time in state history. Republicans and Democrats had six months to make a deal on water rights. Because they failed, rural residents face the loss of their property values, and $4 billion in needed projects, including $1 billion in school construction projects, are now on hold.

And what about the agreement they reached on school funding in response to the McCleary case? The legislature did deal with one of the major issues by capping school levies, thus eliminating the inequity between rich school districts and poor school districts. But they failed to fund the salaries of thousands of school staff, and instead gave districts the authority to continue to use levy dollars to pay staff. This is a clear violation of the Supreme Courts 2012 order in this case.

Everywhere you look, our political system is breaking down. No major legislation has passed in Washington, D.C. The debt is still rising. Social Security and Medicare are still going broke. The government will run out of cash in October. Every year sees interminable special sessions in Olympia and vicious mudslinging campaigns.

A recent poll showed that only half of Americans have faith in American democracy. Horrifying as this is, its no great surprise: Why should anyone have faith in a system that is clearly failing to produce results?

But there are glimmers of hope. Not long ago I received an email from a respected, bipartisan national group thatis working to create an offshoot to focus on the brokenness of our political system one which will examine and elevate a discussion as to the causes of, and possible solutions to address, the deteriorating state of our politics.

And there are efforts afoot to reclaim the political center.For the past 160 years, the Republican and Democratic parties have monopolized political power because one was a center-right coalition, and the other was center-left. Third parties espoused fringe ideas and attracted little support. Today it is the major parties that are pushing fringe ideas, and that creates an opportunity.

In Washington, D.C., recently,a new group promoting the election of Centrist Independents met with the national media. The Centrist Projectaims to appeal to the voters Rs and Ds have left behind: fiscally conservative, but socially moderate.

Where does this all lead? Frankly, I dont know. Perhaps one or both parties will regain their sanity and move back toward the center, although that seems increasingly unlikely. Perhaps a centrist third party will form. Perhaps one of our two major parties will fade away as the Federalist and Whig parties did in the 1800s. Perhaps more and more candidates will choose to run as independents.

Whatever happens, I believe we are at one of those moments in American history when our political system is beginning to go through major realignment.

Like the shifting of tectonic plates, these changes happen gradually. It took elevenyears of British abuses before our founders finally agreed on independence. It took 14 years of agitation over slavery to finally cause the creation of the Republican Party. It took several elections for the South to go from solidly Democratic to solidly Republican.

New political movements take time to mature, so dont expect the end of the current party system to happen overnight. But something is stirring. The last six months were just the beginning: 2018 and 2020 are going to be transformational.

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I'm not sure I'm a Republican anymore - Crosscut

Many Republicans on Capitol Hill are praying President Trump doesn't brashly fire Attorney General Jeff Sessions or special counsel Robert Mueller, who's heading up the Trump campaign-Russia investigation.

The House is set to leave Washington Friday for a month-long August recess, while the Senate is slated to take off two weeks later. There's fear that while the nation's lawmakers are away, the president will do more than mess around on Twitter: They're worried he may take advantage of their absence to reshuffle the decks at the Justice Department in an attempt to kill the Russia probe that has enveloped his presidency from day one.

The president's repeated interviews and continued, petty tweets lambasting the attorney general for recusing himself from the Russia investigation have angered Democrats including many who despise Sessions but especially Sessions' former Republican Senate colleagues who say he did the right thing.

"Under the guidelines, the attorney general really had no other choice" than to recuse, Republican Sen. Susan Collins recently told reporters. "His job as chief law enforcement officer of the country is to abide by the guidelines of the Department of Justice when it comes to cases where he may have a real or perceived conflict of interest, and that's what the attorney general did."

If the president did fire Sessions which would be legal, but would strongly suggest the president is trying to bury the investigation the Senate would have to confirm whoever the president picks to replace him. Democrats would cry bloody murder, fearing the president would only tap a loyalist who would try to end the Russia probe altogether.

Democrats opposed Sessions' nomination, citing his history of racism and how he lied under oath, and arguing that he's out of touch for trying to revive the tough-on-crime stance that has American's prisons bursting at the seams and his desire to crack down on marijuana business owners. But now some prominent Democrats are defending him against Trump's attacks.

"All Americans should be wondering: Why is the president publicly publicly demeaning and humiliating such a close friend and supporter, a member of his own cabinet? They should wonder if the president is trying to pry open the office of attorney general to appoint someone during the August recess who will fire special counsel Mueller and shut down the Russia investigation," Minority Leader Chuck Schumer said in a Senate floor speech this week. "Let me say, if such a situation arises, Democrats would use every tool in our toolbox to stymie such a recess appointment."

But even for most Republicans, there doesn't seem to be any appetite to approve a new attorney general. The chair of the Senate Judiciary Committee, Chuck Grassley, told rreporters he's got enough on his plate with the plethora of judicial nominations before his committee and that he has no plans to hold hearings this fall on a new AG. He said Sessions has his full support and that it's odd the president is tormenting one of his closest ideological allies in his cabinet.

"I've been very clear ... that Sessions is probably the one person in the cabinet who is doing more of the president's agenda than anyone else, and one of the big things that the president wants to accomplish is getting strict constructionists on the courts in the United States and I don't need to spend any more time doing nominations," a gruff Grassley said.

While the president tweets, Republicans on Capitol Hill usually send out gentle nudges to try to keep him in line with his own agenda. But they're becoming blunt as they recognize the immediate political consequences that would likely overwhelm this sporadic freshman president.

"Well it's the president's prerogative, but he is then going to jeopardize, potentially, his ability to get anything else done here," the Senate's number-two Republican, John Cornyn, told reporters. "I don't think that should be his desire or preference."

Republican Sen. Lindsey Graham is going a step further than his colleagues. He said there will be "holy hell to pay" if Trump cans Sessions. He's preparing legislation that he plans to introduce next week to protect Mueller from being fired by the very president he's investigating, unless there's a judicial review that finds good cause.

"Any effort to go after Mueller could be the beginning of the end of the Trump presidency, unless Mueller did something wrong," Sen. Lindsey Graham told reporters on Capitol Hill. "This is not draining the swamp. What he's interjecting is turning democracy upside down."

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Republicans Are Not Thrilled Trump's Toying With Firing Jeff Sessions - RollingStone.com

We are dealing with one-sixth of the economy, said Senator Chris Van Hollen, a Maryland Democrat who has worked on many budget blueprints. We are dealing with something that impacts the lives of millions of Americans. Its a totally inappropriate use of the budget reconciliation process.

On Tuesday night, the Republicans broadest plan to repeal and replace the Affordable Care Act was defeated after Democrats protested that the Congressional Budget Office had not formally assessed the measure; therefore consideration violated budget rules.

Key provisions on abortion and Planned Parenthood funding and efforts to persuade people to maintain insurance coverage could also slip away because they violate the rules that Republicans chose to operate under.

The expedited procedures were first used in 1980. Since then, Congress has completed action on 24 budget reconciliation bills. Twenty became law. Four were vetoed.

Reconciliation is probably the most potent budget enforcement tool available to Congress for a large portion of the budget, the Congressional Research Service, a nonpartisan arm of Congress, has said.

Democrats used the reconciliation process to adopt a very small piece of Obamacare in a separate bill enacted one week after President Barack Obama signed the original 905-page measure in March 2010.

Reconciliation has never, ever been abused to the extent that it is today, Representative Paul D. Ryan of Wisconsin, then the senior Republican on the House Budget Committee, said at the time. The goal of the fast-track procedure, he said then, was to control the government, not expand it.

To be sure, Democrats used procedural shortcuts to clean up the Affordable Care Act in 2010. But those changes are dwarfed by the repeal bill being debated in the Senate this week and by the one passed by the House in May.

The nonpartisan Congressional Budget Office says those bills would erase the gains in insurance coverage made in the seven years since the Affordable Care Act was adopted.

The Senate parliamentarian has challenged at least 11 provisions of the Republican health care bill, including one that would prevent consumers from using tax credits to help pay for insurance that includes coverage for abortions.

And so far, Republicans have not pushed back. Ms. MacDonough grew up in the Washington area and graduated from George Washington University. She knows the guts of the Senate firsthand. She served as a legislative reference assistant in the Senate Library and as an assistant executive clerk for the Senate, keeping track of treaties and nominations. She was also an assistant editor of the Congressional Record.

Seeking wider opportunities, she obtained a law degree from Vermont Law School in 1998.

She worked for the Justice Department, then took a job as an assistant Senate parliamentarian in 1999 and became the first woman to head the office in 2012.

J. Keith Kennedy, who worked for Republican senators for 28 years, said: Elizabeth diligently worked her way up through the ranks. Shes a very smart woman, has a wonderful sense of humor, enjoys life.

Being caught in the political crossfire between Republicans and Democrats is an occupational hazard that Ms. MacDonough has so far managed to avoid.

She is performing a very important institutional duty, is under enormous pressure and is handling it very well, Mr. Kennedy said.

Muftiah M. McCartin, who worked in the office of the House parliamentarian from 1976 to 2005, said Ms. MacDonough is stellar, 100 percent professional.

Under the procedure that Republicans are using to speed passage of their health care bill, senators can object to a provision if its budgetary effects are merely incidental to some policy goal.

There was talk in recent days that Republicans could try to overturn key decisions of the parliamentarian, through a strong-armed majority vote the same way Senate Democrats ended the filibuster for most judges and presidential appointees, and Republicans then ended it for Supreme Court justices.

But at least for now, Ms. MacDonoughs judgments have not been overturned or overruled.

The merely incidental test is inherently subjective, Ms. McCartin said. But Elizabeth has fidelity to Senate precedents and to advice given over the years by the Senate parliamentarians office. Thats what shes striving for: consistency.

A version of this article appears in print on July 27, 2017, on Page A17 of the New York edition with the headline: Republican Gamble on Fast-Track Rules for Health Care Hits Wall.

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Republican Gamble on Fast-Track Rules for Health Care Hits Wall - New York Times