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National Govt & Politics
With flurry of late changes, Senate passes GOP tax reform bill

With flurry of late changes, Senate passes GOP tax reform bill

With flurry of late changes, Senate passes GOP tax reform bill
Photo Credit: Jamie Dupree

With flurry of late changes, Senate passes GOP tax reform bill

In another big step forward for Congressional leaders and President Donald Trump, Republicans muscled a sweeping tax reform bill through the Senate early on Saturday morning, setting up House-Senate negotiations starting next week, as the White House pressed lawmakers to strike a final GOP deal in coming weeks, with a goal of getting the bill to the President's desk by Christmas.

"This tax bill is going to ignite our economy," said Sen. David Perdue (R-GA). "We delivered on an historic opportunity to cut taxes and fix the archaic tax code."

"The vast majority of middle class families are going to get a tax cut," said Sen. Rob Portman (R-OH). "I don't know what's wrong with that."

"The bill also helps small and large businesses by reducing the rates and encouraging businesses to buy new equipment and hire more workers," said Sen. James Lankford (R-OK).

The vote in the Senate came after several days of closed door negotiations among Republicans, as they made a number of changes to the bill, making sure there were enough GOP votes.

"Over the past 24 hours, I think we've made a really great bill even better, with more middle class tax relief, and more relief for small businesses," said Sen. John Thune (R-SD).

The final tally, which took place just before 2 am, was 51-49. Only Sen. Bob Corker (R-TN) broke ranks, as he joined all Democrats in voting against the GOP bill. Corker argued it would add too much to the federal deficit.

The bill now goes to House-Senate negotiations, which are expected to begin next week. The GOP goal is to work out a final deal by the holiday break.

With no summary of the new provisions available, observers were scrambling their way through the revised bill, to figure out what changes had been tucked into the GOP measure. Among the changes proposed in the Senate bill:

+ The Senate plan modifies the current seven income tax brackets, creating rates of 10%, 12%, 22%, 24%, 32%, 35% and 38.5%. Unlike the House bill, the tax cuts for individuals in the Senate plan would be temporary, phasing out after 7 years.

+ The Senate bill increases the standard deduction to make up for the repeal of individual itemized deductions, for state and local taxes.

+ Unlike the House bill, the Senate plan gets rid of the individual mandate to buy health insurance under the Obama health law. It's not clear if that will stay in the final GOP bill.

+ A late change in the Senate version was made to include an up to $10,000 deduction for state and local property taxes, identical to a provision in a House-passed bill.

+ The Alternative Minimum Tax was originally eliminated by the Senate bill, but Friday's revisions now brought it back to life, both for individual and corporate taxpayers. This is at odds with the House, which totally eliminated the AMT.

+ Another item eliminated by the House, but revived in the Senate, was the Medical Expenses deduction, though it would live on for only two years under this plan; people would be allowed to deduct expenses when they reached 7.5 percent of a person's adjusted gross income, as opposed to the current 10 percent threshold.

+ Pass-through income would see a deduction of 23 percent of income, up from 17.4 percent, a big win for small businesses.

+ Just after midnight, Vice President Mike Pence broke a 50-50 tie to approve an amendment from Sen. Ted Cruz (R-TX), which allows people to set up a 529 college savings account for home school students, and use it to cover K-12 expenses.

While Republicans smiled and applauded as the bill was approved, Democrats on the Senate floor were reduced to frustrated legislative bystanders, unable to change the bill in any manner, as they decried the rush as a brazen political power grab by the GOP on taxes.

"It sure looks like the lobbyists have been working overtime," said Sen. Jeff Merkley (D-OR), as Democrats ridiculed a rough draft of the final bill, which contained handwritten scribbles and changes in the margins, some of which were difficult to decipher.

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But with only 48 votes - and just one Republican defection on the final vote - Democrats were unable to do anything but complain about the 479 page GOP tax reform plan.

"There is no possible way that any member of this body has read all of that," said Sen. Chris Murphy (D-CT) in a somewhat incredulous tone. "There is no way."

Democrats did register one win in the late night votes on amendments to the tax reform bill, as with the help of four Republicans, the Senate voted 52-48 to strike a provision championed by Sen. Pat Toomey (R-PA) that would have set out a narrow exemption from a GOP plan to slap excise taxes on college endowments.

Toomey's plan would have applied to colleges that don't take federal funding of any type, and have small student populations; but a sharp backlash attracted four GOP votes, and scuttled that provision.

The tax reform bill now goes back to the House, which is ready to ask for a joint House-Senate conference committee to hammer out a final compromise. That procedural vote is expected on Monday evening.

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