House Republicans passed their tax-overhaul bill on Thursday as Senate tax writers sent their proposal to make individual breaks temporary and repeal a key part of the Obamacare law to the Senate floor. Here are the latest developments, updated throughout the day:
Senate Panel Approves Plan, Dangers Lie Ahead (10:32 p.m.)
Republicans on the Senate Finance Committee voted Thursday night to approve a sweeping tax package, sending it to the full chamber for a vote that party leaders say could come as early as the week after Thanksgiving.
The party-line vote of 14 to 12 came after four days of tense partisan debate in which Republicans voted down a swath of Democratic amendments aimed at portraying the tax measure as a giveaway to the wealthiest Americans and large corporations at the expense of the middle class. One example: Democrat Claire McCaskill proposed an amendment that would have prohibited a 17.4 percent tax deduction for owners of pass-through businesses who make more than $1 million. McCaskill also raised the issue of the carried interest loophole that gives private equity executives, hedge fund managers and others a reduced rate on much of their income.
Last-minute modifications to the Senate plan included changing the carried-interest tax break to increase the required asset-holding period that unlocks the benefit to three years from one year.
Senate Finance Chairman Orrin Hatch, a Utah Republican, grew frustrated with Democrats for using the amendment process to attack the legislation, describing their efforts as “a charade” and “kind of ridiculous.”
Democrats fumed about what they described as an unusually speedy and secretive process.
The legislation may change on the Senate floor to address concerns by GOP members. Senator Ron Johnson of Wisconsin has come out against the package as is, complaining that it unacceptably disadvantages pass-through entities relative to corporations.
And Senators Susan Collins of Maine and Lisa Murkowski of Alaska have said it’s a mistake to include the repeal of the Obamacare individual mandate in the tax bill, fearing that would disrupt the health-care system.
Senate Republicans -- who don’t plan to rely on any Democrats’ votes -- can lose only two of their members before the legislation collapses, and there are a host of concerns. For instance, Senators Bob Corker of Tennessee, Jeff Flake of Arizona and James Lankford of Oklahoma have said they don’t want tax cuts to add to the deficit. Senator Rand Paul of Kentucky has demanded middle class tax hikes for "every American," a high bar the plan doesn’t meet under many recent independent analyses.
How Senate GOP leaders will bridge those concerns remains a mystery. The GOP’s narrow vote margin in the chamber scuttled efforts to repeal Obamacare earlier this year. But the tax effort represents their last best chance to go home for Christmas with a major legislative achievement during Trump’s first year in office.
“When the Senate returns after Thanksgiving, I will bring this must-pass legislation to the floor for further debate and open consideration,” Senate Majority Leader Mitch McConnell said in a statement after the Senate Finance Committee vote. -- Sahil Kapur
Trump Likes House and Senate Tax Plans: Sanders (4:36 p.m.)
President Donald Trump thinks both the House bill and Senate proposal achieve his priorities of cutting taxes for the middle class and corporations, and he doesn’t prefer one over the other, according to White House Press Secretary Sarah Huckabee Sanders.
The revised Senate plan would attempt to contain the package’s cost by sunsetting individual breaks in 2026 and repealing the Obamacare requirement that individuals have health coverage. Most of the House bill’s individual tax changes are permanent and the measure doesn’t include the Obamacare mandate repeal -- but it also wouldn’t comply with rigid Senate budget rules that say it can’t add to the long-term deficit.
When asked whether Trump’s priorities include repealing the individual mandate, Huckabee Sanders said that while the president would “love” to see that happen, it wasn’t one of his main objectives. Trump has repeatedly touted breaks for the middle class as one of his main goals, and Sanders was asked about the fairness of ending those benefits in 2026.
“The president has made clear what his priorities for this legislation are and we’re going to continue to stay focused on them,” she said in response. -- Alexis Leondis
House Celebrates; Senate Panel Gets Back to Work (3:43 p.m.)
House Republicans had barely finished applauding their successful vote to approve a major tax code overhaul Thursday when the Senate Finance Committee went back to work, grinding through a number of Democrats’ amendments aimed at slowing down the chamber’s plan.
Senate Finance Chairman Orrin Hatch -- a Utah Republican who took the debate to a new level this week after proposing a plan to eliminate the Obamacare individual mandate -- told committee members he wants to act on his latest plan tonight or tomorrow at the latest. But first, the panel has to work through Democrats’ offerings -- which it was rejecting on party-line votes.
For example, the committee voted 14-12 to reject a Democratic amendment that would have made the plan’s individual tax cuts permanent, while making the corporate tax cuts temporary. Hatch’s current package does the opposite. Democrats proposed the measure to try to bolster their message that Republicans are prioritizing large corporations over families.
Senator Ron Wyden, the committee’s top Democrat, told reporters he thinks Republicans are having a tough time uniting their caucus around the bill.
He cited the following: Republican Ron Johnson opposes provisions that would cut taxes for closely held businesses organized as pass-throughs -- but not as deeply as for corporations. Susan Collins of Maine is dismayed about the individual mandate repeal. Bob Corker of Tennessee has expressed concerns about the deficit.
“I don’t think they’re developing much momentum,” Wyden told reporters during a break. “One Republican after another is expressing very specific concerns.”
He said injecting Obamacare into the tax debate is also firing up grassroots groups in opposition that otherwise wouldn’t engage on this, he said.
“Now that they have made this a health care issue, I can tell you that we’re hearing from grassroots groups all over this country,” he said. --Laura Litvan, Sahil Kapur and Colleen Murphy
These Republicans Voted No on the House Bill (2:31p.m.)
Of the 13 Republican “no” votes on the House tax bill, five are from New York, four are from New Jersey and three are from California -- the three states are the heaviest users of the state and local tax deductions that are repealed or limited in the bill.
Here’s the list:
- From Calif.: Darrell Issa, Tom McClintock, Dana Rohrabacher
- From New Jersey: Rodney Frelinghuysen, Leonard Lance, Frank LoBiondo, Chris Smith
- From New York: Dan Donovan, John Faso, Pete King, Elise Stefanik, Lee Zeldin
Many are expected to face tough re-election bids in 2018. The 13th Republican opponent was Representative Walter Jones of North Carolina, who cited concerns about the measure’s effect on federal deficits. “My no vote is for the next generation so they won’t be bankrupt,” he said. --Sahil Kapur
House Passes Bill in First Step to Overhaul (1:52 p.m.)
House Republicans passed their version of legislation to overhaul the U.S. tax code by slashing the corporate tax rate, lowering tax burdens for most individuals and adding an estimated $1.4 trillion to the federal deficit over the next decade.
The vote Thursday represents a key milestone in President Donald Trump’s quest to cut taxes for businesses and individuals -- though challenges remain for the GOP’s far-reaching tax plans to fundamentally reshape aspects of the U.S. economy. The Senate is debating its own separate plan, and it isn’t yet clear the chamber will have enough votes to pass it.
The Tax Cuts and Jobs Act H.R. 1, passed the House in a 227-205 vote. -- Anna Edgerton
Trump Says Welfare Spending Overhaul is Next (12:42 p.m.)
President Donald Trump said he would turn to cutting welfare spending after tax legislation is completed, according to House Republicans who were present for his remarks Thursday.
Trump said the administration will pivot to welfare programs next year, said Steve Womack of Arkansas and Matt Gaetz of Florida. Tax legislation in the House and Senate is estimated to reduce federal revenue by at least $1.4 trillion over the next decade.
House conservatives welcomed the comments. “I’m fired up,” said Jim Jordan, a co-founder of the House Freedom Caucus. “Trump gets it.”
Jordan added that the president didn’t provide any details about which programs would see cuts.
During the campaign, Trump promised that he wouldn’t cut Social Security, Medicare or Medicaid.
Tom Cole of Oklahoma said the president didn’t lay out whether he preferred the Senate proposal or House bill, and didn’t discuss whether a final bill should include a repeal of the Obamacare individual mandate. Trump tweeted his support of including the repeal in a tax overhaul earlier this month.
“This was mostly about, ‘Hey guys, we have an opportunity to do something historic. Let’s do it,”’ Cole said. -- Erik Wasson and Laura Litvan