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"Dead-On-Arrival"-er? Cruz Says He's A 'No' On Tax Reform

Remember when we declared the Trump tax reform effort officially "dead on arrival" yesterday after Senator John McCain affirmed that he would vote against anything that resembles the House bill in its current form? McCain’s opposition, by our count, brought the number of ‘no’ votes to three: Aside from McCain, Maine Senator Susan Collins said she would vote against the bill, as did Tennessee Senator Bob Corker.

Well, as of now, the odds of tax reform’s passage have plunged from low to infinitesimal following a Hill report that Senator Ted Cruz has added his voice to the chorus of nays. The news comes as Senate Republicans have struggled with the timeline for unveiling their version of the tax reform package. The bill was initially expected to be introduced on Thursday, but earlier today, GOP leaders said the bill wouldn’t be ready until next week. Then they walked that back. As of now, it looks like the bill is set to be introduced on Thursday.

Cruz is opposing the bill because he’s against eliminating deductions for state and local taxes that critics say would disproportionally raise taxes on residents of blue states. He explained that raising taxes in these states would be “a mistake.”

“There are some taxpayers who are losing exemptions, particularly in some high-tax states like New York or California that could conceivably be paying higher taxes. I think that is a mistake. I think tax reform needs to cut taxes for everybody,” Cruz told reporters at a press conference Tuesday.

Cruz announced his opposition shortly after the New York Times will raise taxes on one third of middle class families.

Senator Ted Cruz of Texas is pushing to keep alive the idea of including a repeal of Obamacare’s individual mandate in the tax overhaul plan,

At a news conference Tuesday, Cruz said it’s vital to use the tax legislation to end the mandate that all Americans have health insurance or pay a penalty. If nothing else, he said, doing so will in effect be a tax cut for the 6.5 million Americans who now pay a penalty because they don’t have health insurance coverage, according to Bloomberg.

Trump has advocated for including a repeal of the individual mandate in the bill, while House Speaker Paul Ryan said over the weekend that lawmakers were considering it.

“I think it’s critical to make this end,” he said of the mandate.

Fellow conservative Sens. Tom Cotton and Rand Paul have joined Cruz in calling for the individual mandate repeal.

Cruz has said repealing the individual mandate would result in another $400 billion or so in revenue that could be used to offset tax cuts in other areas.

However, a senior Senate GOP source familiar with the tax bill the Senate Finance Committee plans to unveil Thursday said it likely won’t include language to repeal the mandate.

“We’re not going in that direction,” the source said.

As it stands now, even if the House passes their version of the bill, it probably would stall in the senate. And if the Senate passes a version with significant deviations from the House version, the bill might never make it past reconciliation.

Still, stocks barely reacted to the news about Cruz and McCain announcing their opposition to the legislation, as investors cling to the hope that Trump will succeed in passing at least one of his legislative priorities before the midterms. Meanwhile, in what appears to be a desperate attempt to circumvent obstinate Republicans, Axios reported yesterday that Gary Cohn and Marc Short - Trump's legislative director - will be meeting with senate Democrats to discuss the bill.