Rule glitch extends tax drama
House has to vote again before overhaul measure can pass
WASHINGTON – House Republicans passed the most significant overhaul of the tax code in three decades Tuesday, but the bill hit a glitch late in the afternoon when the Senate parliamentarian ruled that three minor provisions in the bill did not comply with strict budget rules and would have to be stripped out.
That forced the Senate to make minor changes before voting on the bill Tuesday night, and the House will have to vote again Wednesday on the tweaked package before Republicans can claim their first major legislative win and de- liver the $1.5 trillion package to President Trump before Christmas, as he requested.
Senate Republicans are using special budget rules to fast-track the tax bill and block a Democratic filibuster. Those rules require that every element of the bill has to have a budgetary impact. Democrats asked the Senate parliamentarian to scour the bill for problematic provisions, and she found three — all relatively minor items.
One provision would allow 529 college savings accounts to be used for home-schooling expenses. Another sets criteria to determine whether private universities’ endowments would be subject to a new excise tax.
The third is even more mundane: The short title of the bill — “The Tax Cuts and Jobs Act” — has no budgetary impact and will have to be nixed.
Tuesday’s 227-203 vote in the House split mostly along party lines and came
after a brief but heated debate, which was interrupted several times by protesters chanting, “Kill the bill! Kill the bill!” before they were escorted from the House gallery.
Republicans touted the bill as an engine for economic growth and a boost for middle-class families. Democrats blasted it as a sop to big corporations and wealthy donors.
Twelve House Republicans joined all the chamber’s Democrats to oppose the legislation.
The measure was likely to squeak through the Senate with a narrow GOP majority Tuesday evening before the House votes again Wednesday.
“This is a once-in-a-generation op-
portunity,” said Senate Majority Leader Mitch McConnell, R-Ky.
It was a years-in-the-making moment for House Speaker Paul Ryan, RWis., who has spent nearly 20 years advocating for tax changes. Ryan took the rare opportunity to preside over the chamber for the vote, banging the gavel and joyfully reading the final vote total as his Republican colleagues erupted in cheers.
“This is profound change, and this is change that is going to put our country on the right path,” Ryan said at a news conference after the House vote. “On Jan. 1, Americans are going to wake up with a new tax code.”
The centerpiece is a permanent 40% tax cut for corporations, a change Republicans said is long overdue and desperately needed to make America more competitive in the global economy. Smaller businesses also would see their tax burden shrink significantly.
Supporters said the cost of reducing tax collections by $1.5 trillion over the next 10 years would be offset by an explosion of economic growth, but economists said that growth would cover onethird of the cost at best. Non-partisan estimates project the bill could add
$1 trillion to the national debt over 10 years. Laws designed to prevent deficit spending could kick in as early as next year, forcing cuts to popular programs, including Medicare.
The bill would lower tax rates for individuals and families temporarily while increasing the standard deduction and the child tax credit. Because the bill would kill or limit key deductions — most notably rolling back the ability of filers to subtract their state and local taxes from their federal tax bill — the effect on individuals would vary.
In a study released Monday, the Tax Policy Center, a non-partisan think tank often cited by Democrats, concluded that the top 1% of taxpayers, those making more than $732,800, would get
20.5% of all the tax benefits next year. The study found that for people in the middle of the national income scale — making $48,600 to $86,100 — 91% would see a tax cut averaging $1,090, while 7% would see a tax increase averaging $910 next year.
“This GOP tax scam is simply theft — monumental, brazen theft from the American middle class and from every person who aspires to reach it,” House Minority Leader Nancy Pelosi, D-Calif., said during the House debate Tuesday.
Republicans dismissed suggestions that the bill was skewed toward the wealthy. “Families at every income level will get a tax cut,” Ryan said. “This is real relief, and people are going to see this in their paycheck before too long.”
Ryan said he had “no concerns whatsoever” that the tax bill could turn into a political liability for the GOP as it heads into the 2018 elections.
A Monmouth University Poll released Monday found that Americans disapprove of the GOP bill: 47% of respondents said they don’t like it, and 26% said they approve of the plan.
Ryan said public opinion will shift once Americans see bigger paychecks and more jobs.
Democrats said the opposite will happen. “This bill will be an anchor around the ankles of every Republican,“Senate Minority Leader Charles Schumer, D-N.Y., said Tuesday. “It so helps the wealthy and the powerful corporations, it does so little, and even hurts many in the middle class, it’s a loser. … Republicans will rue the day that they passed this tax bill.”
The GOP legislation would strike a blow against the 2010 Affordable Care Act. It would repeal that law’s “individual mandate” requiring most Americans to obtain health insurance.
Republicans failed to repeal and replace Obamacare, but that provision would give them a partial success to tout on that long-standing promise.
“This is profound change, and this is change that is going to put our country on the right path. On Jan. 1, Americans are going to wake up with a new tax code.” House Speaker Paul Ryan