President Donald Trump urged House Republicans Thursday to approve a near $1.5 trillion tax overhaul as the party prepared to drive the measure through the House. Across the Capitol, Democrats pointed to new numbers showing the Senate version of the plan would boost taxes on lower and middle-income Americans.
“He told us that we have this once-in-a lifetime opportunity to do something really bold, and he reminded us that is why we seek these offices,” Rep. Steve Womack, R-Ark., said of Trump’s closed-door pep rally. “And here we are on the cusp of getting something really important done.”
House passage seemed assured for the measure cutting the 35 percent corporate tax rate to 20 percent and reducing personal tax rates while erasing and shrinking some deductions. Projected federal deficits would grow by $1.5 trillion over the coming decade
But a similar plan approaching approval by the Senate Finance Committee encountered its latest obstacle, this time in the form of fresh projections from Congress’ nonpartisan tax analysts.
The new numbers from Congress’ Joint Committee on Taxation showed that beginning in 2021, many families earning under $30,000 annually would face higher taxes under the Senate package. By 2027, families making less than $75,000 would face tax boosts while those making more would enjoy lower levies.
Oregon Sen. Ron Wyden, top Democrat on the Finance panel, said the new projections showed the tax bill was “just shameful” because middle-class families would “get hammered.”
Republicans attributed the new figures to two Senate provisions. One would end the measure’s personal tax cuts starting in 2026, a step GOP leaders took to contain the measure’s costs.
The other would abolish the “Obamacare” requirement that people buy health coverage or pay tax penalties.
Eliminating those fines is expected to mean fewer people would obtain federally subsidized policies, and the tax analysts consider a reduction in those subsidies to count as a tax increase. The nonpartisan Congressional Budget Office has projected that would result in 13 million more uninsured people by 2027, making the provision a political risk for some lawmakers.
Republicans on the Finance panel showed no signs of backing down. Sen. John Thune, R-S.D., argued that the same Taxation Committee tables showed that higher earners were still bearing a large share of the overall tax burden.
The figures were released a day after Ron Johnson of Wisconsin became the first Republican senator to say he opposed the GOP bill, complaining that it left taxes too high on some corporations and partnerships.
Besides Johnson, Republican Sens. Susan Collins of Maine, Jeff Flake and John McCain of Arizona, Bob Corker of Tennessee and Lisa Murkowski have yet to commit to backing the tax measure.
Republicans controlling the Senate 52-48 can approve the legislation with just 50 votes, plus tie-breaking support from Vice President Mike Pence. With solid Democratic opposition likely, that means they can lose just two GOP votes — a precarious figure.
Even before the new numbers came out, some House Republicans spoke warily of what might happen to the tax bill in the Senate.
“Political survival depends on us doing this.” said Rep. Kevin Cramer, R-N.D. “Frankly, one of the things that scares me a little bit is that they’re going to screw up the bill to the point we can’t pass it.”
Ending the Senate bill’s tax cuts for individuals in 2026, derided by Democrats as a gimmick, was designed to pare the bill’s long-term costs. Legislation cannot boost budget deficits after 10 years if it is to qualify for Senate procedures barring bill-killing filibusters. Those delays take 60 votes to block, numbers Republicans lack.
The Senate Finance panel was on track to approve its proposal by week’s end.
A small group of House Republicans largely from New York and New Jersey rebelled because the House plan would erase tax deductions for state and local income and sales taxes and limit property tax deductions to $10,000.
Their numbers seemed insufficient to derail the bill. Asked if they could stop it, Rep. Peter King, R-N.Y., shook his head and said, “I don’t think so.”
The House measure would collapse today’s seven personal income-tax rates into four: 12, 25, 35 and 39.6 percent. The Senate would have seven rates: 10, 12, 23, 24, 32, 35 and 38.5 percent.
Both bills would nearly double the standard deduction to around $12,000 for individuals and about $24,000 for married couples and dramatically boost the current $1,000 per-child tax credit.
Each plan would erase the current $4,050 personal exemption and annul or reduce other tax breaks. The House would limit interest deductions to $500,000 in the value of future home mortgages, down from today’s $1 million, while the Senate would end deductions for moving expenses and tax preparation.
Each measure would repeal the alternative minimum tax paid by higher-earning people. The House measure would reduce and ultimately repeal the tax paid on the largest inheritances, while the Senate would limit that levy to fewer estates.
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Associated Press writers Kevin Freking, Richard Lardner and Matthew Daly contributed to this report.
