Today's Paper Latest stories 2018 election city/county races Most commented Obits Traffic Newsletters Weather Puzzles + games
ADVERTISEMENT
ADVERTISEMENT
story.lead_photo.caption Kevin Brady, chairman of the House Ways and Means Committee, said Friday he was “confident” the Senate would back the compromise tax bill.

WASHINGTON -- Republican lawmakers Friday said they had secured the votes of two high-profile holdouts for their tax overhaul plan, putting them closer to their first significant legislative victory this year.

GOP leaders hope to pass their $1.5 trillion tax cut along party lines and send it to President Donald Trump by Christmas.

On Thursday, the bill's fate seemed uncertain, when Sen. Marco Rubio of Florida objected to the size of the bill's child tax credits, and Sen. Bob Corker of Tennessee expressed concern about the plan's effect on the U.S. deficit.

But on Friday, Rubio said a revised, more generous child tax credit had won his support, and Corker said he would vote for the legislation despite the cost of the tax cuts.

"This is happening. Tax reform under Republican control of Washington is happening," House Speaker Paul Ryan of Wisconsin told rank-and-file members in a conference call. "Most critics out there didn't think it could happen. ... And now we're on the doorstep of something truly historic."

On Friday, Republicans released details about the overhaul plan and later unveiled the 1,097-page bill. The compromise measure provides deep and long-standing tax cuts for businesses, while providing slightly more generous tax breaks for low- and middle-income Americans by reducing some benefits for higher earners.

New details show that lawmakers offset last-minute changes to the bill -- such as eliminating the corporate alternative minimum tax and lowering the top individual tax rate to 37 percent from the current 39.6 percent -- through slight adjustments, not big changes.

It was still unclear how Republicans plan to pay for the entire package, which must add no more than $1.5 trillion to the deficit if it is to pass without Democratic support.

Despite the bill's $1.5 trillion price tag, Corker, a longtime deficit hawk, said he was swayed to support the bill after "many conversations over the past several days with individuals from both sides of the aisle across Tennessee and around the country."

Corker deemed the bill far from perfect but said it was a once-in-a-generation opportunity.

"I realize this is a bet on our country's enterprising spirit, and that is a bet I am willing to make," Corker said.

A preliminary deficit estimate for the final version of the GOP tax bill indicated it would add $1.46 trillion to the budget deficit over the next 10 years. The Joint Committee on Taxation's analysis combines revenue losses from rate cuts with tax increases from repeal of deductions and other preferences.

Rubio relented in his opposition after negotiators expanded the child tax credit, and a spokesman for Rubio said the senator will vote yes on the legislation.

Rubio had been holding out for a bigger child tax credit for low-income families. After he got it, he tweeted that the change was "a solid step toward broader reforms which are both Pro-Growth and Pro-Worker."

The tax package would double the basic per-child tax credit from $1,000 to $2,000. The bill makes a smaller amount available to families even if they owe no income tax. That amount was increased to $1,400 from the $1,100 level of an earlier version of the bill.

Low-income taxpayers would receive the money in the form of a tax refund, which is why it's called a "refundable" tax credit.

The bill's text, which was signed by Republican negotiators from the chambers' conference committee Friday, includes few major changes from the version that passed in the Senate earlier this month. The 2025 expiration date for the individual tax cuts remains, as does the estate tax, which would apply to fewer Americans in the future.

At the center of the $1.5 trillion bill are large tax cuts for corporations and other businesses, which Republican lawmakers say will create jobs, investment and economic growth.

Compared with the Senate bill, the revised legislation would lower some thresholds for entering a higher individual marginal tax bracket. For example, the top bracket for a married couple filing jointly would begin at $600,000 a year, down from $1 million in the Senate bill.

Owners of pass-through businesses, who pay taxes on their profits at the owners' individual tax rate, would receive a slightly less generous tax break than the original bills called for, allowing a 20 percent deduction on profits they earn. That deduction would phase out -- with some exceptions -- starting at $315,000 of income for couples. The Senate bill included a larger deduction, 23 percent, and a higher phaseout point, $500,000 for couples.

Two newly revealed changes on the business side would help offset revenue losses: a provision that would allow corporations to deduct 80 percent of their net operating losses in the future, down from 90 percent in the Senate bill, and one that would effectively reduce the annual value of research and development tax breaks starting in 2022.

In changes revealed earlier this week, the bill would reduce the corporate tax rate to 21 percent from the current 35 percent; the Senate and House bills had lowered the rate to 20 percent. It also allows taxpayers to deduct up to $10,000 a year in state and local taxes -- a mix of property taxes and either income or sales taxes paid -- in a bid to blunt tax increases on higher-earning workers in high-tax states such as New York and California.

Additionally, the bill repeals the Patient Protection and Affordable Care Act's mandate that most Americans have health insurance or face paying penalties.

The House and Senate plan to vote on the tax bill next week. Many of the bill's changes -- lower tax rates and fewer deductions -- will go into effect in January.

Rep. Kevin Brady, chairman of the tax-writing Ways and Means Committee, predicted that the Senate would not end up being a roadblock for the tax overhaul.

"I'm confident, at the end of the day, the Senate will approve this conference committee report," the Texas Republican said.

Still 3 GOP holdouts

While the bill appeared to be heading toward the finish line, at least three other Republican senators remained publicly undecided on it Friday. Republicans hold a slim 52-48 majority in the Senate.

Those undecided include Mike Lee of Utah, who has allied with Rubio in pressing for an expanded child credit, and Jeff Flake of Arizona, who has been trying to extract commitments from Republican leadership related to the Deferred Action for Childhood Arrivals program for now-illegal aliens who were brought to the U.S. as children.

Sen. Susan Collins of Maine also has expressed reservations about the bill's reduction in the top individual tax rate and pushed for party leaders to support measures to bolster individual health care markets as a condition for her vote. Collins' office said Friday afternoon that she had not yet seen the final bill.

A spokesman for Flake said the senator remains undecided.

Lee, in a statement, sounded upbeat about the bill, saying Rubio and other senators "have done a tremendous job fighting for working families this week, and they have secured a big win." He added: "I look forward to reading the full text of the bill and, hopefully, supporting it."

Meanwhile, two ailing senators have missed votes this week.

John McCain of Arizona, who is 81, is in a Washington-area military hospital being treated for the side effects of brain cancer treatment, and 80-year-old Thad Cochran of Mississippi had a nonmelanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available to vote next week.

Trump, when asked about Lee and Rubio on Friday, said he had no concerns about their support.

"I think they'll be great," he said. "They're great people. They want to see it done. I know them very well. I know how they feel. These are great people, and they want to see it done, and they want to see it done properly."

Trump also told reporters that he had seen the bill, and he liked it.

"I have seen it," Trump said in brief remarks at the White House. "I think it's going to do very, very well. I think that we are going to be in a position to pass something as early as next week, which will be monumental."

Democrats, meanwhile, are expected to unanimously oppose the legislation.

"Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits," said Senate Minority Leader Charles Schumer of New York. "It is just the opposite of what America needs, and Republicans will rue the day they pass this."

Information for this article was contributed by Jim Tankersley and Thomas Kaplan of The New York Times; by Damian Paletta, Erica Werner, Jeff Stein, Mike DeBonis and Heather Long of The Washington Post; and by Stephen Ohlemacher and Marcy Gordon of The Associated Press.

Photo by AP/J. SCOTT APPLEWHITE
Michael Evans, chief counsel for the Senate Democratic tax conferees, waits outside the office of House Ways and Means Committee Chairman Kevin Brady of Texas on Friday in hopes of monitoring the Republicans’ process on a conference report to advance their tax overhaul plan, but he was turned away.
Tax plan details

A Section on 12/16/2017

Print Headline: GOP tweaks tax bill, wins over 2 senators

Sponsor Content

Comments

You must be signed in to post comments
  • RBear
    December 16, 2017 at 8:08 a.m.

    The bill has softened quite a bit through the reconciliation process, but I think we're still waiting to see how it's scored to make sure it comes in under the $1.5 trillion cap under the rules of reconciliation. Preliminary scoring shows it barely comes in under the wire. However, adding that much to the debt is pure hypocrisy for Republicans.
    ...
    For all those who believe that the Laffer Curve will solve the problem, you're smoking funny stuff. I did some research to validate some claims about Laffer effect. Yes, it was used during the Kennedy and Reagan era but those days are gone. Under those two presidencies, the top marginal tax rate was out of this world. Under Kennedy the rate was 91% and under Reagan it was 70%. Currently, it's at 39.6% and will drop by about 2% under this bill.
    ...
    But the thing to remember is that the Laffer Curve is just that, a bell curve that has a lower side equitable to the upper side. Many economists feel we are in the lower side of the curve where cuts in rates result in declining tax revenues instead of increasing revenues. In other words, we've passed the optimal point of the curve. That means these cuts will not pay for themselves and instead would actually deepen the debt.
    ...
    Furthermore, looking at the current economy unless these cuts are passed along in the form of increased wages there is no way to expect the cuts will grow the economy. It is going to take increased consumer spending to grow this economy and with wages stagnant as they have been that's not going to happen. In other words, this is snake oil being sold to pay back campaign contribution favors to big donors.

  • BoudinMan
    December 16, 2017 at 8:37 a.m.

    Job creation is not a function of taxes. It is a function of the demand for goods and services. Stop this farce of a reason for doing this. As for adding resources for corporations to hire more people, the corporations in this country are sitting on an estimated 2 trillion dollars. And that's a low ball estimate. They have all the capital they need now to hire more workers. So here come the republicans, the so-called fiscal responsibility party, digging in with at least 1.5 trillion in debt, but we really don't know how high that figure will grow, in order to satisfy the hunger of the donor class. And wait until they discover, to their horror, that the debt is way out of hand, and they decide to start chipping away at popular programs. There will have to be some sort of reckoning to account for all this. Hopefully, it will be sooner rather than later.

  • notbot
    December 16, 2017 at 10:28 a.m.

    I’m glad our elite’s representatives, Crawford, Hill, Womack and Western signed their name in the Guest Writer column today. The donors are laughing all the way to the banks and real estate companies they own..

  • GeneralMac
    December 16, 2017 at 10:33 a.m.

    RBear............how many people were making over $400,000 during the Kennedy years?

    I guess we could impose a 91% tax rate on incomes over $1BILLION today and slap ourselves on the back for sticking it to the rich.

  • GeneralMac
    December 16, 2017 at 10:48 a.m.

    Will this tax cut be like the Bush tax cuts?

    Every Democrat denounced the Bush tax cuts as favoring only the wealthy but no Democrat favored repealing it and reverting back to tax rates under Clinton ( D )

    Even President Barack HUSSEIN Obama refused to get rid of the Bush tax cuts saying doing so would HURT low income people.

  • RBear
    December 16, 2017 at 12:12 p.m.

    GM, sometimes I wonder if you even understand what you write. What does the $400K figure mean? What I was stating that many economists have pointed out is that during the Kennedy and Reagan eras the top marginal tax rate was in the prohibitive range of the Laffer Curve. After the Reagan and Bush cuts, the rate moved into the normative range. But if you look at the curve, you see that continually cutting taxes does NOT create enough growth to compensate for the cuts.
    ...
    That is what happened with the Bush cuts which were estimated to add $1.5 trillion to the debt over their time. When they were extended under the Obama era, it was at a time when our economy was in deep recession and the need for stimulus was greater. Those cuts are estimated to add $3.3 trillion to the debt. So, for all the gripes about Obama raising the debt it was really the cuts that added the most to the debt. As we all know, those cuts and other economic stimulus plans helped move our economy from the tank to the robust one that Trump inherited.
    ...
    Now, when we look at these cuts they are designed to dig even deeper into the marginal rates at a time when they are not needed. These cuts will not stimulate economic growth due to the state the economy is in now. We have close to full employment and any cuts will haven minute effect on the economy. Corporations are shifting their emphasis to greater automation in both the manufacturing and service sectors due to innovations in AI.
    ...
    What does this all mean? We have a bunch of tax cuts that will not impact the economy and help the average American, but will put our country into deeper debt just to give money to the wealthy who have benefited from the prior growth. If this was truly trickle down, we would have seen a raise in the federal minimum wage attached to the corporate cuts to help those who need it the most.
    ...
    A lot for you to digest, but I'm not expecting a rational thoughtful response.

  • PopMom
    December 16, 2017 at 1:17 p.m.

    Rbear,

    Many, many people are getting a tax increase. If you are in the top bracket and have all of your state and local income tax deductions (over $10,000), you are getting a nice big tax increase while the extreme wealthy who can qualify as "corporations" get lower taxes. Of course, the poor are going to get hit in January with the cuts to services. The economy will probably go haywire over the out of control deficit. Many Republicans are going to be on the chopping block in November.

  • Packman
    December 16, 2017 at 1:43 p.m.

    YEEEEHAAAAAA! Thank you President Trump!
    .
    Will never truly understand why bed wetting libs so viciously oppose letting good people keep more of their hard earned money
    .
    For all you bed wetters (RBear, Pop, etc.) here's a novel idea. Figure your taxes (assuming you pay federal income taxes) and donate the savings from these tax cuts to the Treasury. Hell, show some leadership and double the amount. Otherwise you're just a typical lib f'ing hypocrite.

  • RBear
    December 16, 2017 at 3:19 p.m.

    Pack, did you oppose deficits and increases in the debt when Obama was president? Answer honestly now. If you're one of the right wing "bed wetters" as you like to call others, then you are a big lying hypocrite now. Idiot.
    ...
    I know my explanation required some brain cells to read, but you could have at least figured out the stupidity of your response against it.

  • RBear
    December 16, 2017 at 3:47 p.m.

    Since the D-G hasn't picked the story up, here's more stupidity coming from the Trump administration. a directive from HHS now bans the following words, "diversity," "fetus," "transgender," "vulnerable," "entitlement," "science-based" and "evidence-based", from budget documents in 2018. It shows how idiotic this administration is and how it can't seem to deal with reality. Trump's "best and brightest" folks are more moronic than anything.

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT