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'We have the votes': Senate Republicans set to pass sweeping overhaul of US tax code 'We have the votes': Senate Republicans set to pass sweeping overhaul of US tax code
(about 1 hour later)
Senate Republicans are on the brink of passing a sweeping overhaul of the US tax code, after a night of high-stakes negotiations that left the party’s leadership scrambling for votes.Senate Republicans are on the brink of passing a sweeping overhaul of the US tax code, after a night of high-stakes negotiations that left the party’s leadership scrambling for votes.
Mitch McConnell emerged, smiling, from a meeting with colleagues on Friday morning, to announce that his party had secured the votes necessary to pass the legislation, which bestows massive tax cuts for US corporations and the wealthiest Americans. Mitch McConnell emerged, smiling, from a meeting with colleagues on Friday morning, to announce that his party had secured the votes necessary to pass the legislation, which bestows huge tax cuts on US corporations and the wealthiest Americans.
“We have the votes,” McConnell told reporters on his way to the Senate floor. He said a final vote was expected later in the day.“We have the votes,” McConnell told reporters on his way to the Senate floor. He said a final vote was expected later in the day.
The House of Representatives passed its own tax reform legislation earlier this month. When the Senate passes its version, the two bills will be reconciled, presenting further hurdles in the coming weeks.
The achievement marked a significant milestone for Republicans, who suffered a series of embarrassing blows earlier this year by failing on multiple occasions to repeal and replace the Affordable Care Act amid opposition within their own party.The achievement marked a significant milestone for Republicans, who suffered a series of embarrassing blows earlier this year by failing on multiple occasions to repeal and replace the Affordable Care Act amid opposition within their own party.
Trump and Republicans in Washington subsequently staked their political fortunes on the hope that tax reform would not suffer the same fate as healthcare repeal.Trump and Republicans in Washington subsequently staked their political fortunes on the hope that tax reform would not suffer the same fate as healthcare repeal.
The plan, a $1.4tn package of tax cuts, had been heading smoothly toward a vote on Thursday until the nonpartisan Joint Committee on Taxation projected that the plan would add $1tn to the federal deficit over the next decade – even after factoring in the economic growth the bill is projected to generate. Republicans had contended the massive tax cuts enclosed in their plan would effectively pay for themselves through growth. The plan, a $1.4tn package of tax cuts, had been heading smoothly toward a vote on Thursday until the nonpartisan Joint Committee on Taxation projected that the plan would add $1tn to the federal deficit over the next decade – even after factoring in the economic growth the bill is projected to generate. Republicans had contended the tax cuts enclosed in their plan would in effect pay for themselves through growth.
But after a round of late-night negotiations, Senate Republicans began to regain momentum. On Friday morning, three key senators who were still holding out announced their support for the tax overhaul in exchange for a series of changes to the legislation. Senate Republicans are using a vehicle known as “budget reconciliation” to pass the tax plan using a simple-majority vote, leaving them room for only two defections. Faced with competing concerns, leadership spent the night locked in negotiations with members over the legislation’s impact on the federal deficit, healthcare and certain businesses.
Key to winning over Republican senators Ron Johnson of Wisconsin and Steve Daines of Montana was an agreement to expand tax cuts for millions of businesses known as “pass-through entities”. The plan will now allow owners of these companies to deduct 23% of their business income, up 17.4%. On Friday morning, Senate Republicans regained momentum after three key holdouts announced their support for the tax overhaul in exchange for a series of changes to the legislation. Senator Susan Collins, a Republican of Maine, said she would vote in favor of the legislation, ensuring that Vice-President Mike Pence would not be needed to break a tie.
Senators Jeff Flake and Bob Corker had sought to extract an agreement that would scale back some of the tax cuts in the event the economic growth projections were not met. On Thursday, they unexpectedly held court on the Senate floor, after learning that a mechanism they created to limit the impact on the national debt was not compliant with the Senate’s budget rules. The tense show-down led Republicans scrambling to find a way to offset the deficit by hundreds of billions of dollars. Republican senators Jeff Flake and Bob Corker had sought to extract an agreement that would scale back some of the tax cuts in the event the economic growth projections were not met. On Thursday, they unexpectedly held court on the Senate floor, after learning that a mechanism they created to limit the impact on the national debt was not compliant with the Senate’s budget rules. The tense show-down led Republicans scrambling to find a way to offset the deficit by hundreds of billions of dollars.
But ultimately, the plans were abandoned. Senator Ted Cruz told reporters that Corker’s idea to “lard the bill up with additional taxes” to offset the deficit was rejected by leadership after he and a number of other senators stridently objected. But ultimately, the plans were rejected by Senate leadership, Senator Ted Cruz told reporters, after he and a number of other senators stridently objected.
Flake on Friday announced that he would support the bill, saying in a statement that he had secured a “firm commitment” from leadership and the White House to enact permanent protections for immigrants brought to the country illegally as children. “That proposal did not carry the day,” Cruz said. “Those $350bn in tax increases are not in the bill ... and larding the bill up with new tax increases would have been going the wrong direction.”
Corker will vote against the bill, claiming he was disappointed, had wanted to bvote yes, but could not set aside his concerns about the US debt burden. Flake on Friday announced that he would support the bill despite his concerns, saying in a statement that he had secured two priorities: the elimination of an $85bn “expensing budget gimmick” and a “firm commitment” from the leadership and administration that Congress would enact permanent protections for immigrants brought to the country illegally as children.
Leaders were meanwhile working to draft the changes to the legislation as the hours ticked by on Friday. Among them, Senator Susan Collins had secured agreements to allow Americans to deduct up to $10,000 in property taxes from their federal taxable income. Corker will vote against the bill, claiming he was disappointed and had wanted to vote yes, but could not set aside his concerns about the US debt burden.
The House of Representatives passed their own tax reform legislation earlier this month. When the Senate passes its version, the two bills will be reconciled, presenting further hurdles in the coming weeks. “This is yet another tough vote,” Corker said in a statement.
“But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” he added.
Key to winning over the Republican senators Ron Johnson of Wisconsin and Steve Daines of Montana was an agreement to expand tax cuts for millions of businesses known as “pass-through entities”. The plan will now allow owners of these companies to deduct 23% of their business income, up 17.4%.
Democrats, who were excluded from the process of drafting the tax plan, have remained united in their opposition, attacking the legislation as a giveaway to corporate America and the wealthy.
“In the waning hours, this bill is tilting further towards businesses and away from families,” said Chuck Schumer, the Senate minority leader, in a floor speech on Friday. “Every time the choice is between corporations and families, the Republicans choose corporations.”
Republican Senate leaders were meanwhile working to draft the changes to the legislation as the hours ticked by on Friday.
Trump has called for a tax bill to reach his desk by the end of the year, vowing to deliver a “big, beautiful Christmas present” to Americans.Trump has called for a tax bill to reach his desk by the end of the year, vowing to deliver a “big, beautiful Christmas present” to Americans.
“A vote to cut taxes is a vote to put America first again. We want to do that,” Trump said on Wednesday.“A vote to cut taxes is a vote to put America first again. We want to do that,” Trump said on Wednesday.