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Democrats send conditions for tax reform to Senate leadership, Trump

Senate Minority Leader Chuck Schumer sent a letter to President Donald Trump, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chair Orrin Hatch on Tuesday, Aug. 1, detailing Democratic priorities for passing tax reform legislation.

The 45 Senate Democrats who signed the letter stressed the importance of passing a tax reform package through regular order — not through a reconciliation process — in part to provide lawmakers the opportunity to "end special interest favoritism that plagues our current tax system."

McConnell told reporters following a Republican Senate luncheon Tuesday afternoon that both the Senate Finance Committee and the House Ways and Means Committee would be going through a markup process, but the Senate would take up tax reform via reconciliation.

"We will need to use reconciliation," McConnell told reporters after being asked about a timeline and method for passing tax reform. "We have been informed by a majority of the Democrats in a letter I just received today that most of the principles that would get the country growing again, they're not interested in addressing."

The letter also states that Democrats will not support a plan that includes tax cuts for the extremely wealthy or deficit-financed cuts that they said could hurt programs such as Medicare, Medicaid and Social Security.

The stock market has rallied as the Trump administration has prioritized deregulation and tax reform, but a report from Compass Point Research & Trading indicates that the administration's timeline for the tax package is unrealistic.

"The White House's pivot to tax reform is a positive signal for the market, but we caution that the goal of enacting legislation by December is mind-bogglingly unrealistic given the inherent complexity of the issue and the plethora of legislative deadlines in the fall," the report reads. "We continue to expect passage of a modest tax package in [the first half of 2018]."

The three Democrats who did not sign the letter — North Dakota's Heidi Heitkamp, Indiana's Joe Donnelly and West Virginia's Joe Manchin — are up for re-election in 2018 in states that Trump won during the presidential election.