GOP tax bill advances
WASHINGTON — Senate Republicans took a significant step toward passing a sweeping tax overhaul Tuesday, with a key panel giving its approval and several wavering senators indicating they would support the tax package, helping clear the way for full Senate consideration later this week.
Passage of the tax overhaul, which seemed uncertain on Monday, strengthened considerably on Tuesday after the Senate Budget Committee voted along party lines to advance the plan. A flurry of last-minute dealmaking helped garner the support of a few Republican lawmakers who had expressed concerns about the $1.5 trillion package, including its treatment of small businesses and its effect on the deficit.
The rapid turnaround underlines the pressure Republicans face to pass a tax cut and notch a significant legislative victory in their first year controlling both Congress and the White House. To help push the effort forward, President Donald Trump went to Capitol Hill on Tuesday for a lunch meeting with Republican senators, where he made promises to some and admonished others.
“I think we’re going to get it passed,” Trump later said at the White House. “It’s going to have lots of adjustments before it ends, but the end result will be a very, very massive — the largest in the history of our country — tax cut.”
Republicans emerged from the lunch increasingly optimistic about the bill’s fate and playing down the concerns that had threatened to bedevil its passage. Three key Republican holdouts, Sens. Susan Collins of Maine, Bob Corker of Tennessee and Ron Johnson of Wisconsin, sounded positive about the bill Tuesday after gaining assurances from Trump and the Republican leadership that their worries would be addressed.
Several hurdles remain, however, including resolving differences with the House version of the tax bill, which differs in significant ways from that of the Senate. Both bills cut taxes on businesses and individuals, but differ in the scope and timing of those cuts.
The Senate bill would cut the corporate tax rate to 20 percent from a top rate of 35 percent. For individuals, it would make tax cuts temporary and creates seven income tax brackets, with a bottom rate of 10 percent and a top marginal rate of 38.5 percent, down from the current rate of 39.6 percent.
Rep. Kevin Brady, R-Texas, chairman of the Ways and Means Committee, said that he felt encouraged that the two chambers would be able to align their bills, but that the House would not simply pass the Senate legislation.
“For as much common ground as we have, there are some areas where we are taking different approaches that will be worked, and can only be worked out, in a conference,” Brady said.
Lawmakers are also awaiting a report from the Joint Committee on Taxation that would show the effects of the proposed tax cuts on the economy. That analysis is important, since it will indicate the extent to which the cuts will bolster growth and avoid adding to the deficit. Outside analysts expect the assessment to demonstrate that the Senate bill does not create nearly enough growth to generate revenues to offset those lost via tax cuts, essentially undermining Republicans’ claims that the bill would pay for itself.
Corker, who has voiced the loudest concerns about the bill’s effect on the deficit, said Tuesday that he received assurances that the final legislation would include a mechanism to avoid ballooning the debt, which has passed $20 trillion. While the exact details were not specified, the bill is expected to include some type of trigger that would require certain taxes to increase if the package does not generate as much revenue as projected.
Other holdouts, like Johnson, appear to have been swayed by both admonishments and assurances. Johnson objected to the bill on the grounds that it did not do enough to help so-called pass-through businesses, which pass their income on to their owners.