Three different groups of Republican senators emerge as possible killers of tax reform

You've got 52 Republicans in the Senate. That's a majority. You should be able to pass an overhaul of the tax code. Ha! You're hilarious.

If there's one thing we've learned about how the Senate works, it's that the Senate doesn't work, at least if "work" means accomplish anything pro-growth and pro-free markets. The Senate's arcane, bizarre budget rules are designed to make that all but impossible. But even if you can somehow get past that, you find out that just because a senator has the R label doesn't mean that senator really believes in limited government or free markets. Most do. In fact, I believe an overwhelming majority of them do. I'll even go so far as to say that I think Mitch McConnell does. But when your majority is this thin, you only need a tiny contingent of holdouts to scuttle real reform, what's emerging is that we don't just one one tiny contingent of holdouts. We appear to have three:

One group, including Ron Johnson (R., Wis.) and Steve Daines (R., Mont.), wants deeper tax cuts for so-called pass-through businesses such as partnerships and S corporations that pay taxes on individual rather than corporate tax returns. Both said they want to prevent large corporations from deducting state and local taxes, freeing up money to drive down rates for pass-through firms. They said they would like to support a tax bill but can’t do so yet. Another group, including Bob Corker (R., Tenn.), Jeff Flake (R., Ariz.) and James Lankford (R., Okla.), is concerned about the $1.4 trillion addition to budget deficits the bill would cause, and these senators are wary that it won’t generate enough economic growth to pay for itself. A third group, including Susan Collins (R., Maine) and John McCain (R., Ariz.), helped kill the Republican health-care bill earlier this year and could pose resistance over a variety of provisions, including plans to repeal the Affordable Care Act’s health-insurance mandate as part of the tax bill. Mr. McCain said Monday that he is still undecided and had “a lot of things” he is concerned about.

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Republican leaders were confident they would get the 50 votes they need to pass the bill. But placating all these groups will be challenging, politically and mathematically. Winning over some lawmakers could make others more resistant. The bill would collapse if any three Republicans vote no, assuming no Democratic support.

Of the three groups, only Johnson and Daines have a legitimate concern. Because the cut in the corporate tax leaves the top individual rate so much higher than the corporate tax, it will penalize small business owners who pay taxes on their business earnings at the "pass-through" or individual rate. (Disclosure: I'm one of them.) There are ways around that, including a restructuring of your business so you don't pay the pass-through rate, but it wouldn't be that complicated to amend the bill to address the issue. Corker, Flake and Lankford appear to have flunked Supply-Side Economics 101 if they're buying the conventional Beltway analysis that the bill will "add $1.4 billion to the budget deficit." The whole point of this tax cut is the reverse eight years in which we averaged less than 2.0 percent annualized GDP growth. That, not marginal tax rates, is the reason the deficit is so high. (Well, that and spending, which is another conversation we very much need to have.) If these three don't understand the dynamic effect of tax rate cuts, someone needs to sit the down and tell them the story of the 1980s. Then again, if they're not already well versed in that history, why exactly are they Republicans? That brings us to our bestest pals McCain and Collins. Collins is simply a liberal who doesn't like tax cuts or reductions in the size of the federal government's reach and influence. She will look for excuses to oppose the tax cut. And McCain? We all know what he's become: A quintessential swamp creature who disdains the Republican governing philosophy he once claimed to champion because it doesn't make him popular and doesn't get him cushy interviews on television. He's also a bitter old man who seems to especially resent other Republicans who succeeded in their pursuits of the presidency while McCain failed in his. He opposed the Bush tax cuts of 2001 and 2003 because he hated George W. Bush for beating him. He hates Donald Trump for other reasons, and there's no reason to think he'll refrain from using public policy to get revenge for the personal slights he feels he's experienced. He never refrained from doing it before.

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The House passes good bills. They die in the insanity of the Senate, which is the way it is because people like John McCain refuse to change it

I don't think there's any chance McCain votes yes on this. I'll cop to the mistake if he proves me wrong, but I think his whole motivation at this point is to screw his own party and screw Trump, while earning attaboys from Democrats and the media. The question is whether McCain's profligacy is enough to kill the bill, or whether 50 Republicans will actually get behind this thing in some form that can be reconciled with the House version. Here's an irony: After the Senate nuked the filibuster on Supreme Court confirmations to get Neil Gorsuch through, McCain fretted that the next step could be getting rid of the filibuster for legislation too, because then the Senate would be no different from the House. Um. Yeah. The House passes good bills. They die in the insanity of the Senate, which is the way it is because people like John McCain refuse to change it.