Not so fast; technical issues force House to re-vote on massive tax reform bill

WASHINGTON (AP) — Jubilant Republicans pushed on Tuesday to the verge of the most sweeping rewrite of the nation’s tax laws in more than three decades, a deeply unpopular bill they insist Americans will learn to love when they see their paychecks in the new year. President Donald Trump cheered the lawmakers on, eager to claim his first major legislative victory.

Perhaps emblematic of the stumbles along the way, there was one last hiccup. Speaker Paul Ryan, who has worked years toward the goal of revamping the tax code, gleefully pounded the gavel on the final House vote, but then it turned out it wasn’t final after all.

The Senate still expected to pass the legislation Tuesday night, but the plan to send it on to Trump for his signature had to be scrapped. Democrats noted that three provisions violated Senate rules and had to be removed. So the massive bill will be hauled back across the Capitol for the House to re-vote on Wednesday.

GOP House members roared and applauded as their chamber passed the $1.5 trillion package largely along party lines, 227-203. Ryan declared, “This was a promise made. This is a promise kept,” as he and other GOP leaders convened a victory news conference moments later.

The Senate was still on track to approve the package that will touch every American taxpayer and every corner of the U.S. economy, providing steep tax cuts for businesses and the wealthy, and more modest help for middle- and low-income families. Despite Republican talk of spending discipline, the bill will push the huge national debt ever higher.

After the delay for a second House vote, the measure then heads to Trump who is aching for a win after 11 months of legislative failures and non-starters. The president tweeted his congratulations to GOP leaders and “all great House Republicans who voted in favor of cutting your taxes!”

Reaction from Hawaii’s congressional delegation:

U.S. Sen. Brian Schatz, D, Hawaii: “It’s an indicator of how rushed this is. They didn’t even consult with the Senate. They didn’t consult with the parliamentarian to make sure that it complies with the rules that they’re using to avoid working with Democrats. They’re doing something called reconciliation which allows them to do this on a party line vote but they’re in such a rush that they made several mistakes and so we’re actually going to have to excise those offending provisions and then they’re going to have to take a re-vote. But to me, it’s emblematic of what happens when you take major legislation conceive of it in the dark and rush it through lots and lots of things are going to come out not just over the next several days but months and years. We’re going to learn how awful this tax bill is.”

U.S. Rep. Tulsi Gabbard: “We do need real tax reform – but not this partisan #taxscam that was written by lobbyists for the special interests they represent. We need real tax reform that empowers hard working families, and strengthens our economy and our country. The #GOPTaxScam hurts Hawaiʻi, our keiki and kūpuna, our ‘āina, veterans, people with student loans, the sick and those suffering from addiction, and our struggling middle class. We need tax reform that works for us, not pay-to-play politicians and their campaign contributors.”

U.S. Rep. Colleen Hanabusa:

“This bill is not sound, thoughtful tax policy, it was crafted to fulfill a campaign promise made by Donald Trump and to give the Republicans a talking point for the upcoming election cycle. It is truly unfortunate that the House approved a $1.5 trillion tax cut that benefits the wealthiest Americans by lowering the top individual tax rate from 39.6 to 37 percent and encourages federal tax avoidance by providing a complex legal framework and incentives.

“The American people and their representatives in Congress do not have a solid understanding of what is in this bill. The expiration dates for some of these provisions and the daily revelations of earmarks and legislative riders designed to help the President’s business and Republican interests ensure that Congress will be debating and tinkering with these policies for decades.

“I will not support a bill that doles out 83% of the tax breaks to the wealthiest 1% of Americans while raising taxes on 86 million middle-class households. That is more than half of America’s middle class. The few individual tax breaks are temporary while the cuts for corporations are permanent. In a state like Hawaii, we have more than 25,000 residents struggling to find affordable housing and work that pays for our high cost of living, this plan is a disaster. More than 179,000 workers in Hawaii earn an average salary of less than $40,000 a year. This measure helps the wealthiest Hawaii residents protect their assets while raising taxes on lower-income Hawaii families.

“The tax benefit for Hawaii residents seeking to buy a new home will be reduced because the mortgage interest deduction cap was lowered to $750,000. That is a tough move in a city like Honolulu where the median single family home price often exceeds $800,000.

“Hawaii residents who claim the deduction for State and Local Taxes (SALT) will lose significant benefits. SALT prevents tax payers from owing taxes on the income they pay in taxes to state and local governments but under the new law, the benefit for individuals and families will be capped at $10,000. However, big corporations may continue taking the deduction. Almost 40 percent of taxpayers earning between $50,000 and $75,000 claim SALT and more than 70% of taxpayers making $100,000 to $200,000 use it. More than half the value of the deduction went to households earning less than $200,000 a year. Our local families will be severely impacted.

“I remember a time when Republicans refused to vote for disaster relief legislation until we worked out off sets in other areas of the budget. I was also in the Congress when we passed the Budget Control Act; a compromise arrived at because the other side was deeply concerned with how a Senate controlled by Democrats managed the people’s money. But now that Republicans elected Donald Trump and control both chambers of the Congress, they could not care less about where the money to pay for these tax cuts comes from nor do they seem particularly concerned about deepening our deficit by trillions of dollars.”

Congressional Republicans, who faltered badly in trying to dismantle Barack Obama’s Affordable Care Act, see passage of the tax bill as crucial to proving to Americans they can govern — and imperative for holding onto House and Senate majorities in next year’s midterm elections.

They have repeatedly argued the bill will spur economic growth as corporations, flush with cash, increase wages and hire more workers. But they acknowledge they have work to do in convincing everyday Americans. Many voters in surveys see the legislation as a boost to the wealthy, such as Trump and his family, and a minor gain at best for the middle class.

“I don’t think we’ve done a good job messaging,” said Rep. Greg Walden, R-Ore. “Now, you’re able to look at the final product.”

Ryan was positive, even insistent. He declared, “Results are what’s going to make this popular.”

Democrats called the bill a giveaway to corporations and the wealthy, with no likelihood that business owners will use their gains to hire more workers or raise wages. And they mocked the Republicans’ contention that the bill will make taxes so simple that millions can file their returns “on a postcard” — an idea repeated often by the president.

“What happened to the postcard? We’re going to have to carry around a billboard for tax simplification,” declared Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee.

Tax cuts for corporations would be permanent while the cuts for individuals would expire in 2026 in order to comply with Senate budget rules. The tax cuts would take effect in January, and workers would start to see changes in the amount of taxes withheld from their paychecks in February.

For now, Democrats are planning to use the bill in their campaigns next year. Senate Democrats posted poll numbers on the bill on a video screen at their Tuesday luncheon.

“This bill will come back to haunt them, as Frankenstein did,” said House Democratic leader Nancy Pelosi.

The bill would slash the corporate income tax rate from 35 percent to 21 percent. The top tax rate for individuals would be lowered from 39.6 percent to 37 percent.

The legislation repeals an important part of the 2010 health care law — the requirement that all Americans carry health insurance or face a penalty — as the GOP looks to unravel the law it failed to repeal and replace this past summer. It also allows oil drilling in the Arctic National Wildlife Refuge.

The $1,000-per-child tax credit doubles to $2,000, with up to $1,400 available in IRS refunds for families who owe little or no taxes. Parents would have to provide children’s Social Security numbers to receive the child credit, a measure intended to deny the credit to people who are in the U.S. illegally.

Disgruntled Republican lawmakers from high-tax New York, New Jersey and California receded into the background as the tax train rolled. They oppose a new $10,000 limit on the deduction for state and local taxes.

Rep. Rodney Frelinghuysen, R-N.J., was among those who voted against the bill. Frelinghuysen chairs the powerful House Appropriations Committee, and it is rare for committee chairmen to oppose major legislation.

GOP Rep. Peter King conveyed what people in his Long Island, New York, district were telling him about the tax bill: “Nothing good, especially from Republicans. … It’s certainly unpopular in my district.”

The bill is projected to add $1.46 trillion to the nation’s debt over a decade. GOP lawmakers say they expect a future Congress to continue the tax cuts so they won’t expire. That would drive up deficits even further.

The bill would initially provide tax cuts for Americans of all incomes. But if the cuts for individuals expire, most Americans — those making less than $75,000 — would see tax increases in 2027, according to congressional estimates.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s