White House threatens to bypass conservatives on tax reform

Fresh off a defeat on US healthcare legislation, the White House warned rebellious conservative lawmakers that they should get behind President Donald Trump's agenda or he may bypass them on future legislative fights, including tax reform.

The threat by White House chief of staff Reince Priebus to build a broad coalition on tax reform that could include moderate Democrats, came as the Republican head of the tax-writing committee in the House of Representatives said he hoped to move a tax Bill through his panel this spring.

House Ways and Means Committee Chairman Kevin Brady said his committee had been working on tax reform in parallel with the failed healthcare reform push.

The draft healthcare Bill would have scrapped the Affordable Care Act of former US President Barack Obama, which was opposed by Trump's Republican party for years. Trump's Bill was withdrawn because objections from members of the conservative House Freedom Caucus and from moderate Republicans left a shortage of votes needed for passage. Democrats were unified in opposition.

"I would say that we will probably start going very, very strong for the big tax cuts and tax reform. That will be next," Trump told reporters at the White House.

However, the tax cuts were supposed to be paid for by savings from the withdrawn healthcare Bill. Without the spending cuts in the failed Bill, any tax cuts will add to the federal budget deficit.

Brady said he wanted the House blueprint to be the basis for Trump's tax reform plan rather than have competing versions from Treasury and the White House.

However, investors on Wall Street worry the healthcare Bill's defeat bodes poorly for tax reform.