Republicans On Verge Of Passing Senate Tax Bill
Updated at 4:15 p.m. ET
Senate Majority Leader Mitch McConnell told reporters on Friday that he believes Republicans now have enough votes to pass their tax bill, and they plan to do so later in the day. This comes after a closed-door meeting at which Senate Republicans discussed final changes to their bill and several holdouts got on board.
"We have the votes," McConnell declared to reporters, as he strode down the hallway between his office and the Senate chamber upon exiting the meeting, which lasted roughly an hour and a half.
The sudden certainty marks a dramatic shift after it appeared that the fate of the bill was in doubt just hours earlier because of concerns that steep tax cuts could add trillions to the deficit over time.
After the meeting, a number of high-profile holdouts on the legislation said they expected a new version of the bill would satisfy a wide range of GOP demands.
Arizona Sen. Jeff Flake, once one of the firm holdouts because of concerns over the deficit, tweeted he would support the bill after getting assurances from the White House and Senate GOP leaders that they would work on legislation related to the Deferred Action for Childhood Arrivals, which President Trump ordered to be rescinded earlier this year.
Maine Republican Susan Collins also announced that she would vote yes after extracting several concessions. The new bill will include her request to allow taxpayers to write off up to $10,000 in property taxes paid to state and local governments. Collins also says McConnell pledged to support legislation to fund subsidies to insurance companies to help defray costs for low-income consumers. The Trump administration stopped paying those cost-sharing reductions this year.
Senate Republicans plan to leave the cut in the corporate tax rate as it stands at 20 percent. They will drop the pass-through rate, used by businesses that pay taxes on the individual side of the tax code, to 23 percent as opposed to the 25 percent originally planned, according to Republican Sen. Ron Johnson of Wisconsin. A new version of the bill will also include more generous rules for businesses that decide to begin filing as corporations as a result of tax overhaul.
Johnson was one of two who demanded increased benefits for small businesses in exchange for their support. Johnson and Montana Sen. Steve Daines, both former small-business owners, said they now plan to vote for the tax legislation.
Johnson said those changes, in addition to a promise that he will have a say in the process of combining the House and Senate tax bills, won his support.
"What I expect is I will have a seat at the table," Johnson said. "I'm not anticipating offering any amendments."
To help pay for the pass-through cut, they plan to increase the proposed tax rate on corporate profits that are earned overseas and brought back into the U.S.. The new level in the Senate bill will match the level in the House bill passed before Thanksgiving.
The bill is projected to add $1.4 trillion to the deficit over 10 years. The Joint Committee on Taxation reported on Thursday that the economic stimulus from the bill would only make up $400 billion of that.
That figure has raised concerns with some Republicans, including Flake and Tennessee Sen. Bob Corker, who wanted the legislation to include a trigger mechanism that would force tax increases or spending cuts if the overhaul failed to grow the economy.
That idea was rejected Thursday after the Senate parliamentarian told lawmakers the doing so would likely violate complex Senate budget rules. Corker has not said whether he will support the bill, but a number of other GOP lawmakers say they believe the JCT figure underestimates the positive impact of the tax bill.
"This bill will end up reducing the deficit, because there will be economic growth," Ohio Sen. Rob Portman contended. "I feel very good about the fiscal situation."
If the Senate passes its bill, senators will go into conference with House members next week to work out differences in the two bills. If they can come to an agreement, both chambers would have to pass the version worked out in conference before it could go to Trump to be signed into law.
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