(Bloomberg) -- GOP tax writers in the House and Senatescoured the U.S. tax code Thursday and shook the couch cushions forloose change, as one member put it, in an all-day struggle to findways to pay for the deep tax cuts their leadersand President Donald Trump have promised.

By day’s end, the House Ways and Means Committee had hammeredtogether a bill and sent it toward the House floor for a votepromised next week, while the Senate Finance Committee revealed aproposal it intends to mark up on Monday.

But there’s an elephant in the room. Both plans contain nearly$1.5 trillion in red ink in the first 10 years.

Unless they eliminate the red ink beyond that -- a tall orderthat would require major changes -- the legislation will be subjectto a 60-vote threshold under Senate rules, which could doom it tofailure.

An alternative is to sunset some of the provisions after adecade, but congressional leaders don’t want that.

“One of the challenges we have is there’s a limit to how muchrevenue we can forgo in the budget window, so it’s a matter ofputting these pieces together,” Senator Pat Toomey, a PennsylvaniaRepublican, said in a Bloomberg TV interview on Friday.

As written, the Senate proposal “blows a massive hole in thedebt,” said Maya MacGuineas, president of the nonpartisan Committeefor a Responsible Federal Budget, in a Twitter message Thursdaynight.

A GOP aide to the Finance panel said everything in the proposalthat Senate Finance Chairman Orrin Hatch released Thursday isdesigned to be permanent -- and that any issues related to deficiteffects will be fixed.

The aide didn’t specify how. The committee is scheduled to beginmarking up the bill on Monday, Hatch said.

Compensation plans

Hatch’s plan seeks to shore up revenue by departing from theHouse bill in a number of ways -- including its proposal to fullyrepeal state and local tax deductions that benefit individuals inhigh-tax states.

That measure will alienate GOP House members in New York, NewJersey and California.

It would lower the price tag by about $100 billion with aone-year delay on the corporate tax cut that Trump has sold as akey to faster economic growth. White House Budget Director MickMulvaney downplayed the harm of a delay Thursday. But a dayearlier, Treasury Secretary Steven Mnuchin said, “The longer wewait, the worse it is for the economy and making companiescompetitive.”

The Senate plan preserves the estate tax -- though limiting itto fewer multimillion-dollar estates. The House bill wouldeliminate that levy in time.

Still, Hatch’s plan would give corporations a bigger break ontaxes associated with trillions of dollars in earnings that theyhold offshore than the House bill would.

And it would set a lower top individual tax rate than the Houseenvisions -- 38.5 percent for million-dollar earners as opposed to39.6 percent.

In at least one case Thursday, the Senate plan seized on aprovision that the House dropped on the same day. Hatch proposedaccelerating the taxation of salary and other awards put into“non-qualified deferred compensation plans,” which function assuper-sized 401(k) plans for high-earningworkers.

The provision, which would also change how stock options andsimilar securities are taxed, would probably lead to hundreds ofcompanies eliminating such plans, experts say.

In the Senate plan, the measure is credited with producing $13.4billion over 10 years, according to Congress’s Joint Committee onTaxation.

How to fill the hole

If those differences sound difficult, just wait. Jonathan Traub,who oversees tax policy for Deloitte Tax LLP, said the biggeststicking points will emerge as the Senate Finance panel beginsrehabbing its bill to comply with Senate rules.

“That’s a hole that Hatch and the other Senate Republicans aregoing to have to fill,” Traub said. “And how they fill it may notbe very attractive to House Republicans. It’s an unenviablechallenge they face.”

On the House side, last-minute changes to the bill before itcleared the Ways and Means Committee on Thursday pulled its pricetag under the $1.5 trillion allowed in the first decade under thebudget resolution.

“Today, the first and oldest Committee in Congress passedtransformational tax reform legislation that charts a new coursefor the country,” Ways and Means Chairman Kevin Brady said afterhis panel approved his tax bill.

Deficit concerns

To get there, the panel appears to have employed a touch offiscal finesse: The single biggest source of new revenue in Brady’schanges stems from a revision that wouldn’t take effect until 2023-- raising questions about whether Republicans in Congress wouldever really let it happen.

The measure would require companies to write off their spendingon research and experimentation over five years. Currently, theycan deduct such spending immediately. That change raises a nice bitof revenue: $108.6 billion from 2023 through 2027, according to aJCT estimate.

Three senators have already raised concerns about tax cuts thatincrease the deficit, including Senator Bob Corker of Tennessee,Senator James Lankford of Oklahoma and Senator Jeff Flake ofArizona.

“I remain concerned over how the current tax reform proposalswill grow the already staggering national debt,” Flake saidThursday, calling for a “fiscally responsible” bill.

ACA individual mandate

A wildcard in the debate is the Obamacare individual mandate,which many Republicans in both chambers are pushing to repeal aspart of a tax bill.

Doing so would save $338 billion in government subsidies over adecade to help offset the tax cuts.

But it’s a political hand-grenade that party leaders worry couldcost them crucial votes and potentially sink the tax effort, asit’s also estimated to lead to 13 million people losing theirinsurance coverage in 2027.

Senate Majority Whip John Cornyn said Thursday that GOP leadersare “taking a hard look at” adding repeal of the mandate to the taxbill. Senator Jerry Moran of Kansas suggested that repealing of themandate could help initiate a corporate tax cut immediately.

“Those two things are connected,” he said.

Going forward, the next few weeks will determine whetherthe tax overhaul succeeds. The House is on track now to hold a votebefore Thanksgiving, and the Senate perhaps soon after.

But it’s far from clear either measure can pass in the opposingchamber, let alone be combined into one bill that can clear bothand land on Trump’s desk.

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