Senate Republicans negotiated through early
Saturday morning to pass their sweeping, trillion-dollar tax reform
bill, putting the GOP and President Trump on the threshold of a major
legislative victory this year.
“This is a great day for the
country,” Senate Majority Leader Mitch McConnell said at about 2 a.m.,
after the measure passed by the minimum, 51-vote majority. “We have an
opportunity to make America more competitive and provide relief to the
middle class.”
Tennessee Sen. Bob Corker was the lone Senate
Republican to vote against the bill, joining the 48 Senate Democrats who
voted nay.
The eleventh-hour vote-wrangling and related,
last-minute changes were highlighted by hand-written, barely legible
revisions in the margin of one page of the 478-page document, a
situation that Democrats criticized on social media.
GOP senators will now meet in conference with their
counterparts in the Republican-led House – which last month passed its
tax reform bill – to negotiate a compromise bill for Trump to sign
before year’s end.
"We are one step closer to delivering MASSIVE tax cuts
for working families across America," the president tweeted soon after
the vote. "Special thanks to
@SenateMajLdr Mitch McConnell and Chairman
@SenOrrinHatch for shepherding our bill through the Senate. Look forward to signing a final bill before Christmas!"
Trump is eager to score his first, major legislative
victory after the Senate failed this summer to pass legislation to
repeal and replace ObamaCare.
But both chambers still must agree on a final measure,
which includes compromises on such issues as property tax deductions,
with support for fiscal House conservatives still a challenge.
“I applaud my friends and colleagues in the Senate for
completing step 2 of 3 in the process,” said North Carolina GOP Rep.
Mark Meadows, chairman of the conservative House Freedom Caucus. “This
job is not done. … Now is the moment in which both chambers must come
together, work out our differences, and finish what we’ve begun."
In a second tweet on Saturday morning, Trump acknowledged the final congressional hurdle.
“Biggest Tax Bill and Tax Cuts in history just passed
in the Senate,” he wrote. “Now these great Republicans will be going for
final passage. Thank you to House and Senate Republicans for your hard
work and commitment!”
Trump told reporters before leaving the White House for
New York: "Now we go to conference. Something beautiful is going to
come out of that fix."
The Senate measure focuses its tax reductions on
businesses and higher-earning individuals, gives more modest breaks to
others, and offers the boldest rewrite of the nation's tax system since
1986.
Republicans touted the package as one that would
benefit people of all incomes and ignite the economy. Even an official
projection of a $1 trillion, 10-year flood of deeper budget deficits
couldn't dissuade GOP senators from rallying behind the bill.
The GOP views passage as crucial to retaining its House and Senate majorities in next year's elections.
Democrats derided the bill as Republicans’ gift to its
wealthy and business backers at the expense of lower-earning people.
They contrasted the bill's permanent reduction in corporate income tax
rates from 35 percent to 20 percent to smaller individual tax breaks
that would end in 2026.
Congress' nonpartisan Joint Committee on Taxation has
said the bill's reductions for many families would be modest and said by
2027, families earning under $75,000 would on average face higher, not
lower, taxes.
The bill is "removed from the reality of what the American people need," said Senate Minority Leader Chuck Schumer, D-N.Y.
The New York Democrat also said the last-minute bill changes shows "the Senate is descending to a new low of chicanery."
Still, Democrats won enough GOP support to kill a
provision by Sen. Pat Toomey, R-Pa., that would have bestowed a tax
break on conservative Hillsdale College in Michigan.
The bill hit rough waters after the Joint Taxation
panel concluded it would worsen federal shortfalls by $1 trillion over a
decade, even when factoring in economic growth that lower taxes would
stimulate.
Trump administration officials and many Republicans
have insisted the bill would pay for itself by stimulating the economy.
But the sour projections stiffened resistance from some deficit-averse
Republicans.
But after bargaining that stretched into Friday, GOP
leaders nailed down the support they needed in a chamber they control
52-48. Facing unyielding Democratic opposition, Republicans could lose
no more than two GOP senators and prevail with a tie-breaking vote from
Vice President Mike Pence, but ended up not needing it.
Leaders' changes included helping millions of companies
whose owners pay individual, not corporate, taxes on their profits by
allowing deductions of 23 percent, up from 17.4 percent. That helped win
over Wisconsin's Johnson and Steve Daines of Montana.
People would be allowed to deduct up to $10,000 in
property taxes, a demand of Sen. Susan Collins of Maine. That matched a
House provision that chamber's leaders included to keep some GOP votes
from high-tax states like New York, New Jersey, and California.
The changes added nearly $300 billion to the tax bill's
costs. To pay for that, leaders reduced the number of high-earners who
must pay the alternative minimum tax, rather than completely erasing it.
They also increased a one-time tax on profits U.S.-based corporations
are holding overseas and would require firms to keep paying the business
version of the alternative minimum tax.
Sen. Jeff Flake, R-Ariz. -- who like Corker had been a
holdout and has sharply attacked Trump's capabilities as president --
voted for the bill. He said he'd received commitments from party leaders
and the administration "to work with me" to restore protections,
dismantled by Trump, for young immigrants who arrived in the U.S.
illegally as children. That seemed short of a pledge to actually revive
the safeguards.
The Senate bill would drop the highest personal income
tax rate from 39.6 percent to 38.5 percent. The estate tax levied on a
few thousand of the nation's largest inheritances would be narrowed to
affect even fewer.
Deductions for state and local income taxes, moving
expenses and other items would vanish, the standard deduction -- used by
most Americans -- would nearly double to $12,000 for individuals and
$24,000 for couples, and the per-child tax credit would grow.
The bill would abolish the "Obamacare" requirement that
most people buy health coverage or face tax penalties. Industry experts
say that would weaken the law by easing pressure on healthier people to
buy coverage, and the nonpartisan Congressional Budget Office has said
the move would push premiums higher and leave 13 million additional
people uninsured.
Drilling would be allowed in the Arctic National
Wildlife Refuge. Another provision, knocked out because it violated
Senate budget rules, would have explicitly let parents buy
tax-advantaged 529 college savings accounts for fetuses, a step they can
already take but which anti-abortion forces wanted to inscribe into
law.
There were also breaks for the wine, beer and spirits industries, Alaska Natives and aircraft management firms.
