A procedural glitch knocked the bill off track, but House expects to clear it Wednesday.
The Senate cleared the Republican tax overhaul early Wednesday, putting the GOP on the cusp of the major legislative victory that has eluded it all year.
The sweeping $1.5 trillion package of tax cuts and tax code revisions will have to go back to the House for another vote later Wednesday after a procedural glitch in the Senate. But that vote is considered a formality, and President Donald Trump is expected to sign the bill before the week is out.
“From a Republican point of view, this is as good as it gets and we’re more than happy to take our argument [for the tax bill] to the American people in an election contest,” Senate Majority Leader Mitch McConnell said in an interview with POLITICO before the chamber's 51-48 vote.
House Republicans were barely done celebrating their initial 227-203 vote Tuesday in favor of the legislation when word started circulating that several provisions of the bill ran afoul of Senate rules. That meant the Senate had to remove those provisions, approve the bill and send it back to the House for another vote.
One offending provision involved using tax-advantaged college savings accounts for home schooling expenses. Another – important to McConnell — would have protected Kentucky’s private Berea College from a proposed excise tax on university endowment earnings.
The stumble was an embarrassment for Republicans. It also played into the hands of Democrats who complain the legislation has been moving so quickly through the Capitol that it’s been poorly vetted.
“The House revote is the latest evidence of just how shoddily written the GOP tax scam really is,” House Minority Leader Nancy Pelosi said in a statement after it was clear the chamber would have to take another vote.
But McConnell called the problem "a couple of little glitches" in an interview with Fox News, and it didn’t appear to slow the bill’s momentum at all.
The Trump administration tentatively has planned an event at the White House at 2 p.m. on Wednesday with Republicans to celebrate the bill’s passage, according to sources familiar with the planning.
The swift pace of final action underscores Republicans’ determination to wrap up the tax bill by their self-imposed year-end deadline and before Democrat Doug Jones is seated as Alabama’s new senator. Republicans also need to turn to other matters this week, notably keeping the government running beyond a Friday deadline.
For House Speaker Paul Ryan, the legislation is the culmination of a career-long pursuit of overhauling the tax code.
“This is a day I have looked forward to for a very long time,” he said on the House floor. “Today is about how much better things can be: More jobs, fairer taxes and bigger paychecks. Faster growth and real upward mobility. A strong economy that makes all of us stronger.”
Democrats scoffed, calling the legislation a giveaway to the rich.
“The bill provides crumbs and tax hikes for middle-class families in this country, and a Christmas gift to major corporations and billionaire investors,” said Senate Minority Leader Chuck Schumer. “How can Republicans defend this? The only people who want it are their very wealthy paymasters.”
House Republicans were largely united on the bill, a departure from the usual drama in the chamber over major legislation, which often gets tripped up by hardline conservatives.
Still, 12 House GOP lawmakers voted against the bill, all but one from high-tax New York, New Jersey and California. They objected to how the legislation scaled back a state and local tax writeoff, which they complained would mean tax hikes for many of their constituents.
The legislation would be the biggest tax rewrite in decades, and would slash the corporate tax rate for the first time in 30 years, overhaul the taxation of both small and large businesses and reduce rates on individuals.
With an eye toward next year’s midterm elections, Republicans are emphasizing the millions – 80 percent of taxpayers, according to the independent Tax Policy Center – who would see a tax cut next year. The average break would total $2,100, the group said Monday, though the benefits would vary widely by income.
Democrats are emphasizing how much of the cuts would accrue to the highest earners along with the minority of taxpayers – about 5 percent, according to the Tax Policy Center – who would pay more next year under the plan.
Americans are broadly skeptical of the tax plan.
One new poll shows low overall public support for the bill, but strong backing among Republicans. Only 33 percent of all respondents to a CNN poll released Tuesday supported the plan, but among just Republican respondents support stood at 76 percent. Democratic opposition was overwhelming: 89 percent.
Republicans got slightly better news from a new POLITICO/Morning Consult poll. The survey shows 42 percent of voters support the legislation and 39 percent oppose it, with another 18 percent undecided.
House Ways and Means Committee Chairman Kevin Brady, one of the architects of the Republican plan, said he wasn’t concerned by polling on the issue.
“I think the narrative and talking points about, against this are just standard fare, an easy narrative to run,” he told reporters. “I frankly think Democrats have overplayed their hand because when people back home and our local businesses see the tax relief, they’re going to know they weren’t really told the truth by the opponents of tax reform.”
Lawmakers are sure to continue battling over the legislation long after Trump inks it into law.
The plan would make the government’s budget outlook substantially worse, adding $1.456 trillion to a debt that’s already nearly doubled over the past decade. Federal red ink is now at the highest levels it’s been since the government was paying down its World War II debts, and that’s sure to stoke calls to rein in the deficit.
Democrats are already accusing Republicans of using the worsening debt as a pretext for controversial cuts in government entitlement programs.
What’s more, much of the Republican plan is only temporary, with many provisions beginning to expire after next year. Most of the individual breaks would be gone by 2026, ensuring ongoing battles over their fate, much like lawmakers wrestled for years over what to do with George W. Bush’s tax cuts or their annual practice of extending dozens of expiring tax breaks.
The plan may also alter Republicans’ relationship with the IRS. For years they’ve beaten up on the tax agency, yet they are now relying on it to implement their proposal. In section after section, their plan delegates authority to the IRS to figure out the details of how the provisions would work, an increased workload that will make it harder for lawmakers to continue pounding on the agency politically and slashing its budget.
For taxpayers, the bill will mean major – and sudden – changes in policy, most of which will take effect on New Year’s Day. The bill would hit urban areas particularly hard through cuts to the mortgage interest deduction, a long-standing break for state and local taxes, subsidies for public transportation, and a key funding method for roads and other public projects.
But because the bill was largely written in secret – a final draft was only released last Friday – tax experts are still poring through the legislation trying to understand the changes.
Crossposted from: https://www.politico.com/story/2017/12/19/congress-tax-bill-votes-304908