Collins, a Maine Republican, told reporters that adding the mandate repeal was a mistake. "This is going to be difficult and I just don't know why we had to complicate it by bringing up the ACA," she said.
Several moderate Republicans including Collins and John McCain have not said if they support the tax plan.
The new Republican plan, Hatch said at a committee meeting, would expand the child tax credit and slightly reduce some middle-class tax rates. Taken together, those changes "will let us channel even more tax relief to the middle class," he said.
But those changes would be temporary, while a deep cut in the corporate tax rate would be permanent under Hatch's plan, which was widely expected to become the main vehicle for Republicans efforts to revamp the tax code before year end.
The effort is seen by Republicans as critical to their prospects of retaining power in Washington in the November 2018 congressional elections. So far, Republicans and President Donald Trump have no major legislative victories from 2017 to show voters despite controlling the White House and Congress.
They are hoping the tax cut will fix that problem and have made progress in recent days while Trump toured Asian capitals. He returned late on Tuesday and was scheduled to meet with lawmakers on Thursday.
The House of Representatives prepared to begin debating its tax bill on Wednesday afternoon, with a vote expected on Thursday. It was approved last week by the House tax committee.
The Senate and House tax plans must eventually be reconciled and merged into a final plan that can pass both chambers before it goes to Trump to sign into law.
Excluding Democrats
By including an effective repeal of Obamacare's individual mandate, Senate Republicans likely ended any possibility of gaining support from Democrats.
"This is not just another garden variety attack on the Affordable Care Act, or ACA. This is repeal of that law," said Senator Ron Wyden, the finance committee's top Democrat. He blasted Republicans for setting a "double standard" by guaranteeing permanent tax cuts only for corporations.
The individual mandate clause of Obamacare requires healthy younger people to buy insurance or pay a federal penalty. The aim is to hold down coverage costs for those sick or older.
By repealing that penalty, Republicans would raise more than $318 billion over a decade to pay for tax cuts, according to the Joint Committee on Taxation, a nonpartisan unit of Congress.
The nonpartisan Congressional Budget Office separately estimated last week that repealing the mandate would increase the number of uninsured Americans by 13 million by 2027.
Trump backed the inclusion of the mandate repeal in the tax bill, as do Republican conservatives in the Senate and House.
U.S. House Speaker Paul Ryan told CNBC on Wednesday that while the House tax plan did not repeal the mandate, Republicans in that chamber would likely approve a final measure hammered out with the Senate that included it.
Hatch's Senate plan would also expand access to deductions for "pass-through" businesses and increase the child tax credit to $2,000 from the earlier proposed $1,650. But those benefits would expire at the end of 2025.
The changes would still allow the measure to comply with a deficit requirement that must be met if Senate Republicans are to pass the legislation with a simple majority. The Senate tax plan is required to add no more than $1.5 trillion over 10 years to the federal deficit and national debt. Otherwise, Senate Republicans would need 60 votes.
This article was provided by Reuters.