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Senate Republicans wanted to pass a rapid bill on massive tax cuts. They were at full speed, sounding quite calm, and also hearing from potential dissenters that they will vote yay. Bridging the differences between the House and the Senate would be the next step, but the biggest hurdle seemed to be falling.

However, the deficit hawks are lifting their heads. According to current non-partisan estimates, the tax cuts would not pay for themselves. Factoring potentially higher growth would still result in a higher debt of around 1 trillion USD over ten years.

So, they want to add a “trigger” that would raise rates if the tax revenue does not meet expectations. So, in case the deficit grows, tax hikes would automatically be enacted. Of course, Congress could change this trigger in due time, but this would still leave a lot of room for uncertainty for businesses.

Will the hawks and doves among the Republican Party reach a deal on this delicate detail? The vote has been delayed from Thursday to Friday, signaling it is only a small matter that could be ironed out swiftly.

Voting is expected to resume on Friday at 11:00 EST, which is 16:00 GMT.

A delay could down the dollar on a growing risk of failure

However, if markets open on Monday without a vote in the Senate, things could be rocky for the greenback. A deal on tax cuts is already priced into the dollar and any delay could trigger a sell-off. A failure to pass something would be of course much worse.

The longer that the matter is  delayed, the longer the opposition grows. Opinion polls show that Americans do not favor these tax cuts. Normally, tax cuts are popular and tax hikes are negative. In this case, tax cuts receive worse approval ratings that past tax hikes.

So far, Republican Senators are united on the main cuts and just need to close the small print. But if time passes by, some could jump off the wagon. It takes only 3 out of 52 Republicans to say Nay to prevent Trump’s promised Christmas gift.

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