Northwest Arkansas Democrat-Gazette
On to biggest tax cuts ever, Trump declares
WASHINGTON — President Donald Trump promised tax cuts Friday that “will be the biggest in the history of our country,” a day after the Senate passed a $4 trillion budget that lays the groundwork for Republicans’ promised tax legislation.
Republicans hope to push the first tax overhaul in three decades through Congress by year’s end, a goal that would fulfill multiple campaign promises but could run aground over any number of disputes. Failure could cost the GOP in next year’s midterm elections.
The budget plan, which passed on a near party-line vote late Thursday, includes rules that will allow Republicans to get tax legislation through the Senate without Democratic votes and without fear of a Democratic filibuster. Nonetheless, the GOP’s narrow 52-48 majority in the Senate will be difficult for leadership to navigate, as illustrated by the Republicans’ multiple failures to pass legislation repealing and replacing the Patient Protection and Affordable Care Act.
The final vote on the budget was 51-49, with deficit hawk Sen. Rand Paul of Kentucky the lone opposing GOP vote.
Trump suggested Friday on Twitter that Paul would be with him in the end on taxes, even though the senator has
been critical of the tax package as it’s emerged thus far.
Trump wrote, “The Budget passed late last night, 51 to 49. We got ZERO Democrat votes with only Rand Paul (he will vote for Tax Cuts) voting against…….. This now allows for the passage of large scale Tax Cuts (and Reform), which will be the biggest in the history of our country!”
It remains to be seen whether the overhaul will add up to the biggest tax cuts ever. Trump and Republicans have only produced a nine-page framework, leaving plenty of blanks that Congress needs to fill in over the coming months on income-tax brackets and the elimination of some favored deductions.
The budget bill, thus the promised tax plan, was not received warmly by the Democrats.
Sen. Bernie Sanders, I-Vt., the ranking member of the Budget Committee, declared the budget to be “extremely cruel,” and Sen. Charles Schumer of New York, the Democratic leader, said it would burden the middle class.
“This nasty and backwards budget greenlights cuts to Medicare and Medicaid in order to give a tax break to big corporations and the wealthiest Americans,” Schumer said.
On Friday, House Speaker Paul Ryan, R-Wis., said the GOP will add a fourth tax bracket for high-income people to the three originally proposed so that top earners “do not see a big rate cut,” but he didn’t say what the tax rate would be for that bracket. Speaking on CBS This Morning, Ryan said Republicans are working on the tax rate for “the fourth bracket that the president and others are talking about that we’re going to do.”
The House has passed a different budget, but House Republicans signaled they would simply accept the Senate plan to avoid any potential of delaying the tax measure. Additionally, Republicans tacked on an amendment to the Senate plan that will enable the House to adopt it without the need for a conference committee before the legislating can begin, a House GOP leadership aide said. That means the budget bill could be passed as soon as next week.
“I look forward to swift
passage and to working with the president on tax reform,” House Budget Committee Chairman Diane Black, R-Tenn., said Friday.
REPUBLICANS SPLIT
Republicans are looking for accomplishments after a drought of legislative achievements despite controlling both chambers of Congress and the White House. Republican lawmakers publicly admit that failure on taxes would be politically devastating, with control of the House and Senate at stake in next year’s midterm elections.
“It would be a complete disaster,” Sen. Lindsey Graham, R-S.C., said after the final budget vote.
But Republicans are split on taxes. A restive group of House Republicans from high-tax states such as New York, New Jersey, Illinois and California staunchly oppose the tax plan’s proposed elimination of the federal deduction for state and local taxes. They maintain it would hurt low- to middle-income taxpayers and subject them to being taxed twice.
Paul, representing another angle of opposition, has insisted that no middle-class taxes rise as a result of the tax bill.
“Rather than bicker over raising tax on some people and lowering taxes on other people, we should cut everyone’s taxes,” he said.
The White House and GOP leaders have refrained from categorically promising that no middle-class Americans will see a tax increase, arguing that there may be exceptions to the broad tax cuts they aim to provide.
Meanwhile, the White House is making overtures to moderate Democrats in the House and Democratic senators from states that Trump won in the 2016 election. Most heavily courted have been Sens. Claire McCaskill of Missouri, Joe Manchin of West Virginia and Heidi Heitkamp of North Dakota. The trio dined this week at the home of president’s daughter
Ivanka Trump and her husband, Jared Kushner, both top advisers to the president.
But Manchin said after Thursday’s vote, “I fear that passage of this budget today will make it difficult to pass bipartisan tax reform in the coming weeks.”
In his conversations with Trump, Manchin said, “we have discussed our shared goal of ensuring any tax-reform package passes with both Republican and Democratic votes, and focuses on providing tax relief for working Americans. The current tax-reform proposal … does not reflect my conversations with the president.”
The Democrats were excluded from the drafting of the tax blueprint, and they continue to demand that any tax-cutting plan not add to the mounting $20 trillion national debt. The newly adopted Senate budget plan provides for $1.5 trillion over 10 years in debt-financed tax cuts, busting earlier Republican pledges of strict fiscal discipline.
The government said Friday that the budget deficit rose to $666 billion in the just-completed fiscal year.
The money would be used for the tax plan’s cut in the corporate tax rate from 36 percent to 20 percent, reduced taxes for most individuals, and the repeal of inheritance taxes on multimillion-dollar estates. The standard deduction would be doubled, to $12,000 for individuals and $24,000 for families, the number of tax brackets would shrink from seven, and the child tax credit would be increased.
Trump and the Republicans pitch the plan as a boon to the middle class and a spark to economic growth and jobs. Democrats say it mainly would benefit wealthy individuals — like Trump — and big corporations.
Anti-tax crusader Grover Norquist, president of Americans for Tax Reform, said on CNBC that the budget debate shows that enough senators support a new tax law that there won’t be a repeat of the failed Affordable Care Act repeal attempt.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said on CNBC that the decision to allow tax cuts that add up to $1.5 trillion to the deficit was a “massive shift” for the Republican
party.
“People who don’t care about the deficit and debt are probably cheering about this,” she said.
ARCTIC DRILLING
The budget resolution also allows Congress to pursue legislation allowing oil and gas exploration in the Arctic National Wildlife Refuge in Alaska with only Republican votes.
An amendment that would have deleted language that could allow for drilling legislation failed, 48-52. The Trump administration and congressional Republicans have cast drilling permissions as a way to help pay for the proposed tax cuts.
Republican Sens. Lisa Murkowski and Dan Sullivan of Alaska said Congress can create jobs and enhance energy security by opening a small section of the 19.6 million-acre site to drilling.
“More energy production means more American jobs, more American economic growth, more American national security … and a more sustainable global environment, because no one in the world produces energy more responsibly than Americans, especially Alaskans,” Sullivan said.
But Sen. Maria Cantwell of Washington, the top Democrat on the Energy and Natural Resources Committee, said drilling was not worth the risks to a fragile ecosystem that serves as important habitat for polar bears, caribou and migratory birds.
“The Arctic National Wildlife Refuge is one of the most pristine areas of the United States, and we have been protecting it for decades for a reason,” Cantwell said, criticizing the idea of sacrificing biologically important areas “for oil that we don’t need. It’s not worth it.”
The wildlife refuge has been the focus of a political fight for more than three decades. President Bill Clinton vetoed a GOP plan to allow drilling in the refuge in 1995, and Cantwell-led Democrats defeated a similar GOP plan in 2005.
Information for this article was contributed by Marcy Gordon, Andrew Taylor and Matthew Daly of The Associated Press; by Erik Wasson and Sahil Kapur of Bloomberg News; and by Thomas Kaplan of The New York Times.