WASHINGTON — After some key GOP holdouts fell in line, the Republican tax plan appeared headed for Senate passage by late Thursday or early Friday — even as last-minute revisions were still being negotiated to assuage lawmakers.
An endorsement earlier in the day from Sen. John McCain ended speculation that the independent-minded Republican could upend his party’s hopes for a year-end accomplishment, much the way his opposition helped kill the GOP’s Obamacare repeal earlier this year.
Similarly, support from Sen. Lisa Murkowski and encouraging words from Sen. Susan Collins both of whom had joined McCain to oppose the health care bill, gave the bill a boost ahead of voting.
If passed, the sweeping Senate tax bill would next need to be reconciled with a House version, a process leaders could expedite in a matter of days. Then both the House and Senate would need to pass the revised measure again before sending it to President Donald Trump’s desk.
Republicans and the White House sorely need a legislative victory to reflect their first year of control in Washington, and a landmark tax bill — which would dramatically lower the corporate tax rate and double the standard deduction for individuals — would provide that win.
Yet even many Republicans who support the $1.5 trillion package expressed resignation ahead of the vote, concerned by the way the legislation bill is being rushed through Congress without a broad range of hearings and the usual debate.
“This is not a perfect bill, but it is one that would deliver much-needed reform to our tax code, grow the economy and help Americans keep more of their hard-earned money,” McCain said.
Just hours before the Senate vote, GOP leaders were still revising it, without support from Democrats and behind closed doors. Senators were preparing to offer numerous amendments Thursday evening, though few were expected to be approved.
Republicans can only lose two votes from their 52-seat majority and still pass the bill with Vice President Mike Pence breaking a tie. That made the backing from McCain and Murkowski critical.
Murkowski came on board after an agreement was reached to include a provision she sought to allow oil and gas drilling in part of the Arctic National Wildlife Refuge for the first time in years.
Others continued trying to shape the bill as the Senate debated.
“I am not committed to vote for this bill,” Collins said at a breakfast meeting with reporters. “Because who knows what’s going to happen on the Senate floor. … But I am encouraged.”
The package would slash corporate rates to 20 percent, a level not seen since the Great Depression, and initially reduce individual brackets, though studies show the benefits will flow mainly to wealthier Americans rather than lower- and middle-income households.
The corporate rates would become permanent, while the individual rate cuts would expire in 2025.
One amendment sought by Sen. Marco Rubio and Sen. Mike Lee would increase the bill’s proposed 20 percent corporate tax rate to 22 percent to provide $180 billion over the decade to make a proposed $2,000 child tax credit fully refundable for low-income Americans.
But lifting the proposed 20 percent corporate rate — the foundation of the GOP plan — has been strongly opposed by the White House and groups backed by the billionaire Koch brothers.
“Reducing America’s high corporate tax rate from 35 percent to 20 percent is key to driving the economic growth,” leaders of Americans for Prosperity, Freedom Partners and other Koch-aligned groups wrote in a letter to senators. “The proposed Rubio-Lee amendment would deviate from that framework.”
Sen. Ron Johnson who remained undecided as of Thursday afternoon, planned to offer an amendment to eliminate the ability of corporations to continue deducting state and local income and sales taxes — a write-off individual filers will have to forego. Elimination of that write-off would hit hardest on residents of high-tax states.
Johnson is also among many senators worried the tax cuts will pile onto the debt. The current Senate bill is estimated to increase the deficit by $1.5 trillion over 10 years.
“One thing different about me than my colleagues, I never ever promised Wisconsinites I was going to cut taxes,” Johnson told reporters Wednesday. “In fact, I actually ran and said, ‘We can’t afford to cut people’s taxes.’”
Republicans have promised that the costs will be offset by the economic growth spurred by the plan. But even after accounting for such growth, a report Thursday by the Joint Committee on Taxation estimated that the GOP bill would increase the deficit by $1 trillion.
Democratic Sen. Ron Wyden of Oregon, who pushed for the report to be released before the vote, said it “ends the fantasy about magical growth and claims the tax cuts pay for themselves.”
Still unresolved is a trigger option being sought by Sen. Bob Corker, R-Tenn., to reverse the tax breaks if the economy doesn’t produce enough growth to cover the costs.
Many senators and outside conservative groups oppose the trigger, but GOP leaders cannot afford to lose the votes of Corker and other deficit hawks.
Democrats were resigned that the bill appeared headed toward passage, despite their efforts to halt it.
“My new rule is: The faster a bill goes through, the worse it is,” said Sen. Angus King, the Maine independent who caucuses with Democrats.
“The process is preposterous. The bill is terrible,” he said. “That’s exactly the problem of not having hearings — there’s no real analysis of the consequences, particularly the unintended consequences, are going to be.”