Senate approves sweeping tax reform bill in overnight, party-line vote

UPDATE — 3:26 p.m. EST: Speaking to reporters Saturday, President Trump suggested he may accept a 22 percent corporate tax rate in final tax reform legislation, two points higher than what’s called for in both the House and Senate’s bills.

“It could be 22 when it all comes out but it could also be 20. We’ll see what ultimately comes out,” he said.

Increasing the corporate rate from 20 to 22 percent would raise an estimated additional $200 billion over the next decade.

 

Following marathon negotiations and last-minute rewrites to accommodate holdouts, Senate Republicans advanced their version of the Tax Cuts and Jobs Act tax-reform bill backed by the White House early Saturday morning.

The motion passed shortly before 2 a.m. along party lines.  The final vote was 51–49.

“We think this is a great day for the country,” said Senate Majority Leader Mitch McConnell (R-Ky.) following the vote.

Sen. Bob Corker (R-Tenn.), Budget Committee member and the lone GOP defector, opposed the measure on grounds it decreases tax receipts and without subsequent spending cuts would add to the current $20 trillion national debt.

“I am not able to cast aside my fiscal concerns and vote for legislation that . . . could deepen the debt burden on future generations,” he said

Amid fears the bill was in jeopardy, Republicans scrambled to amend the measure to include a deduction of up to $10,000 for local property taxes identical to the House version.

Similarly, the gesture to keep the alternative minimum tax, raising the pass-through deduction from 17.4 percent to 23 percent and elevating the repatriation rate for offshore corporate cash earned late commitments from GOP Sens. Susan Collins (R-Maine), Ron Johnson (R-Wis.) and Steve Daines (R-Mont.).

In normal fashion, President Trump tweeted his satisfaction with the Senate’s work and praised the GOP for its efforts.

Despite concerns over adding to the deficit what has been estimated by some experts to be $1.4 trillion, McConnell sought to sooth anxiety, telling reporters:

“I’m totally confident this is a revenue-neutral bill.  I think this will be a revenue producer.”

McConnell’s assurances notwithstanding, Senate Democrats erupted with fury at the bill’s passage, declaring it would cripple the middle class and only reward the highest income earners and corporations.

While the bill’s passage allows dramatic tax reform, a top priority of the Trump White House, to move forward, the Senate measure must be reconciled with a similar bill passed in November by the House.  Differences include the number of individual tax brackets and the fate of the medical expense and student loan interest rate deductions.

Negotiations between the two congressional bodies are expected to begin next week.

 

Editor’s note: The second-to-last paragraph of this article has been updated.

 

[Bloomberg] [Reuters] [Wall Street Journal] [Washington Post] [Photo courtesy AP/J. Scott Applewhite via Washington Examiner]

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