GOP on the verge of huge tax overhaul, with one hiccup
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WASHINGTON (AP) — Jubilant Republicans pushed on Tuesday to the verge of the most sweeping rewrite of the nation’s tax laws in more than three decades, a deeply unpopular bill they insist Americans will learn to love when they see their paychecks in the new year. President Donald Trump cheered the lawmakers on, eager to claim his first major legislative victory.
Perhaps emblematic of the stumbles along the way, there was one last hiccup. Speaker Paul Ryan, who has worked years toward the goal of revamping the tax code, gleefully pounded the gavel on the final House vote, but then it turned out it wasn’t final after all.
The Senate still expected to pass the legislation Tuesday night, but the plan to send it on to Trump for his signature had to be scrapped. Democrats noted that three provisions violated Senate rules and had to be removed. So the massive bill will be hauled back across the Capitol for the House to re-vote on Wednesday.
GOP House members roared and applauded as their chamber passed the $1.5 trillion package largely along party lines, 227-203. Ryan declared, “This was a promise made. This is a promise kept,” as he and other GOP leaders convened a victory news conference moments later.
The Senate was still on track to approve the package that will touch every American taxpayer and every corner of the U.S. economy, providing steep tax cuts for businesses and the wealthy, and more modest help for middle- and low-income families. Despite Republican talk of spending discipline, the bill will push the huge national debt ever higher.
After the delay for a second House vote, the measure then heads to Trump who is aching for a win after 11 months of legislative failures and non-starters. The president tweeted his congratulations to GOP leaders and “all great House Republicans who voted in favor of cutting your taxes!”
Congressional Republicans, who faltered badly in trying to dismantle Barack Obama’s Affordable Care Act, see passage of the tax bill as crucial to proving to Americans they can govern — and imperative for holding onto House and Senate majorities in next year’s midterm elections.
They have repeatedly argued the bill will spur economic growth as corporations, flush with cash, increase wages and hire more workers. But they acknowledge they have work to do in convincing everyday Americans. Many voters in surveys see the legislation as a boost to the wealthy, such as Trump and his family, and a minor gain at best for the middle class.
“I don’t think we’ve done a good job messaging,” said Rep. Greg Walden, R-Ore. “Now, you’re able to look at the final product.”
Ryan was positive, even insistent. He declared, “Results are what’s going to make this popular.”
Democrats called the bill a giveaway to corporations and the wealthy, with no likelihood that business owners will use their gains to hire more workers or raise wages. And they mocked the Republicans’ contention that the bill will make taxes so simple that millions can file their returns “on a postcard” — an idea repeated often by the president.
“What happened to the postcard? We’re going to have to carry around a billboard for tax simplification,” declared Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee.
Tax cuts for corporations would be permanent while the cuts for individuals would expire in 2026 in order to comply with Senate budget rules. The tax cuts would take effect in January, and workers would start to see changes in the amount of taxes withheld from their paychecks in February.
For now, Democrats are planning to use the bill in their campaigns next year. Senate Democrats posted poll numbers on the bill on a video screen at their Tuesday luncheon.
“This bill will come back to haunt them, as Frankenstein did,” said House Democratic leader Nancy Pelosi.
The bill would slash the corporate income tax rate from 35 percent to 21 percent. The top tax rate for individuals would be lowered from 39.6 percent to 37 percent.
The legislation repeals an important part of the 2010 health care law — the requirement that all Americans carry health insurance or face a penalty — as the GOP looks to unravel the law it failed to repeal and replace this past summer. It also allows oil drilling in the Arctic National Wildlife Refuge.
The $1,000-per-child tax credit doubles to $2,000, with up to $1,400 available in IRS refunds for families who owe little or no taxes. Parents would have to provide children’s Social Security numbers to receive the child credit, a measure intended to deny the credit to people who are in the U.S. illegally.
Disgruntled Republican lawmakers from high-tax New York, New Jersey and California receded into the background as the tax train rolled. They oppose a new $10,000 limit on the deduction for state and local taxes.
Rep. Rodney Frelinghuysen, R-N.J., was among those who voted against the bill. Frelinghuysen chairs the powerful House Appropriations Committee, and it is rare for committee chairmen to oppose major legislation.
GOP Rep. Peter King conveyed what people in his Long Island, New York, district were telling him about the tax bill: “Nothing good, especially from Republicans. … It’s certainly unpopular in my district.”
The bill is projected to add $1.46 trillion to the nation’s debt over a decade. GOP lawmakers say they expect a future Congress to continue the tax cuts so they won’t expire. That would drive up deficits even further.
The bill would initially provide tax cuts for Americans of all incomes. But if the cuts for individuals expire, most Americans — those making less than $75,000 — would see tax increases in 2027, according to congressional estimates.
Associated Press writers Matthew Daly, Kevin Freking and Alan Fram contributed to this report.