30/11/17

Senate Republicans take major procedural step toward passing tax bill

(Guardian) --Senate Republicans took an important procedural step on Wednesday toward passing their sweeping tax overhaul, after a handful of GOP holdouts fell into line and supported the plan.

The 52-48 party-line vote opens debate on the $1.5tn package, paving the way for a final vote on the plan by the end of the week. The measure, which advanced without the support of a single Democrat, would dramatically reshape the US tax code and disproportionately benefits the country’s highest earners.

The vote also signaled momentum for the tax plan after weeks of frenetic behind-the-scenes negotiations and arm-twisting. Just yesterday, the bill’s prospects appeared to be waning as a handful of Republican senators aired disparate concerns with the plan to rewrite the US tax code for the first time in three decades.

In a floor speech ahead of Wednesday’s vote, the Senate majority leader, Mitch McConnell, urged members with lingering concerns to address them through amendments in the ensuing debate period.

“Passing tax reform is the single most important thing we can do right now to shift the economy into high gear and deliver much-needed relief to American families,” he said.

Though those senators ultimately voted in favor of opening debate, it remains unclear if they will be satisfied with final shape of the bill. Many of the objections they have raised with the plan are still unresolved and it is unclear what amendments will be offered – and less clear which will be adopted.

Trump meanwhile touted the plan as “rocket fuel” that will drive rapid economic growth, during a campaign rally in St Louis, Missouri. Speaking ahead of the vote, Trump encouraged senators to seize what he called a “once-in-a-lifetime opportunity to restore American prosperity and reclaim America’s destiny”.

Trump also repeated the claim that the tax overhaul was going to “cost me a fortune”.

“Believe me, this is not good for me,” he said. However, the bill is designed to benefit wealthy Americans like Trump, and he is likely to benefit from provisions eliminating the estate tax, lowering the rate for “pass-through” business entities and repealing the alternative minimum tax.

The plan would lower the corporate tax rate from 35% to 20% and reduce individual tax rates – though it makes those changes temporary. The bill would also repeal the Affordable Care Act’s individual mandate, which requires all Americans to purchase health insurance or face a fine, as a way to offset the cost of the cuts.

The Republicans say their tax plan will pay for itself by spurring enough economic growth to account for the deficit increase, but experts and even some GOP senators are concerned the bill will add to the federal debt.

Senator Bob Corker and other so-called “deficit hawks” have pushed for the plan to include a “trigger” which would eliminate some of the tax cuts if the growth targets aren’t met.

However, on Wednesday, several senators said they were strongly opposed to the idea of rolling back tax cuts. By the end of the day, Republicans had floated a new idea. Rather than raising taxes, the provision would trigger spending cuts.

Senator Ron Johnson of Wisconsin remains unhappy with the plan’s treatment of certain businesses known as “pass-through entities” and other Republicans have said they are uncomfortable that the plan benefits the wealthiest Americans.

An analysis by the nonpartisan Congressional Budget Office found that the Republican tax plan would hurt Americans earning less than $30,000 per year while rewarding high-earning business owners and individuals. A report by the Joint Committee on Taxation similarly found that the rich benefit the most from the plan.

Republicans are using a special budgetary process called reconciliation that will allow them to pass tax reform with a simple majority as opposed to the meeting the standard 60-vote threshold. With all Democrats opposed to the measure, Republicans can only afford to lose two senators and still pass the bill with the help of Vice-President Mike Pence.

Yet Republicans’ willingness to open debate on the plan underscored the pressure Republicans are under to notch a legislative victory before the end of the year. To leave for the Christmas vacation without achieving a single legislative priority could have consequences during the 2018 midterms.

Democrats, who alone cannot stop the measure from passing, have attacked the plan as gift to the wealthiest Americans and biggest corporations, disguised as a middle-class tax break. A group of moderate and red-state Democrats on Tuesday urged Republicans to abandon their current plan and work with them on one that they said could easily get “70 votes or more” in the Senate.

The prospect of crafting a bipartisan plan at this stage is remote – and Democrats appear to have few options to slow or delay passage of the bill. But liberal and progressive activists have organized dozens of protests around the country while flooding wavering senators with calls and emails and urging them to abandon the plan.

Their tactics worked during the healthcare debate, when Republicans were unable to bridge the ideological divides in their party to reach an agreement. But it’s proving more difficult this time around, as Republicans seem more willing to make concessions.

“The rush to get something – anything – done,” Chuck Schumer, the minority leader, said in a floor speech on Wednesday, “will haunt my Republican colleagues in years to come, and I daresay in November of 2018.”