Updated at 4:05 p.m. ET
In making his "closing argument" for tax legislation expected to get a vote in Congress next week, President Trump announced that the changes would take effect early next year.
"If Congress sends me a bill before Christmas, the IRS — this is just out, this is breaking news — has just confirmed that Americans will see lower taxes and bigger paychecks beginning in February, just two short months from now," Trump said in a speech at the White House Wednesday
House Speaker Paul Ryan's office explained in an email that the IRS will adjust its withholding tables in February based on the legislation. At that point, for those likely to get a tax cut, employers would begin pulling less out of their paychecks for federal income taxes, also know as a withholding.
"We're going to make our tax system work for you again," Trump said with several families standing near him whose stories he told in his address. "We're going to make our economy work for you again. And we are going to make the American dream, and that's the real dream, that will be the dream that you want for your children and your grandchildren once again. But we need your help to get Congress across that finish line."
This came just after an announcement that House and Senate GOP lawmakers have agreed on a final tax package.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, says the House and Senate have combined their tax bills passed over the last month.
"We reached the agreement," Hatch said. "Between the House and the Senate."
Hatch declined to give any details of what would be included in the deal, deferring to President Trump to decide when the information will be released.
Congressional Republicans are considering abandoning Trump's demands for a 20 percent top corporate rate to help pay for more generous breaks elsewhere in the bill. In a major shift, Trump told reporters on Wednesday that he was open to that plan
"It's at 35 right now. So if it got down to 21, I would certainly, I would be thrilled," Trump said. "We haven't set that final figure yet, but certainly 21 is a very great difference."
The deal was reached after a flurry of closed-door meetings between Republican negotiators began last week and continued around the clock in recent days. The talks centered around resolving differences between the two largely similar tax bills that passed the House and the Senate over the last several weeks.
Among the major issues were disagreements over write-offs for mortgage interest payments, state and local tax deductions and the size and scope of benefits for some small businesses.
Negotiators were leaning towards allowing homeowners to write off interest on mortgages valued at $750,000 or less, according to several GOP aides. That is an increase from the $500,000 limit in the House bill and lower than current law which allows people write off interest on mortgages up to $1 million.
They also appeared to be nearing an agreement to allow taxpayers to write off up to $10,000 in taxes paid to state and local governments, the aides said. The decision was made in part to appease Republicans in high-tax states like California, New Jersey and New York.
Tax breaks for small businesses were still a critical issue in the final hours of negotiation. Sen. Ron Johnson, R-Wis., told reporters he was working with negotiators on the conference committee to ensure the new tax system doesn't give corporations an unfair advantage over businesses that decide to file their taxes on the individual side of the tax code.
Johnson said he was pleased with the direction of the talks, but he would not commit to voting for the tax bill until a final agreement is released.
Trump in his remarks hinted that the child tax credit could also go up. "You'll hear the numbers very soon but they're even larger than anticipated," the president said.
Texas Sen. John Cornyn, the No. 2 Republican in the Senate, told reporters he believes the final tax legislation will be approved.
"I'm confident we'll pass the bill next week," Cornyn said. "Earlier is better."
The final legislation is also expected to include a measure from the Senate bill that would ease oil and gas drilling restrictions in the Arctic National Wildlife Refuge in Alaska. That measure was included to appease Alaska Sen. Lisa Murkowski who has campaigned throughout her career to allow drilling in the vast protected area.
GOP leaders are aiming to vote on the final bill early next week, to meet President Trump's deadline of passing a tax bill by Christmas, but Senate Minority Leader Chuck Schumer, D-N.Y., urged Republicans to hold off on a tax vote until January. That's when Sen.-elect Doug Jones, D-Ala., will take office, reducing the GOP majority to 51-49. Bringing up the final tax bill this month means GOP Sen. Luther Strange of Alabama will be able to cast a vote for it.
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