x
Breaking News
More () »

House approves Trump's massive tax overhaul, but last-minute glitch delays final passage

The $1.5 trillion package would provide steep tax cuts for businesses and the wealthy and more modest cuts for middle- and low-income families.
WASHINGTON, DC - JUNE 06: Early morning Light hits the U.S. Capitol building on June 6, 2017 in Washington, DC. On Thursday June 8, former FBI Director James Comey will appear to before the Senate Intelligence Committee to testify.

The GOP tax bill hit a procedural snag Tuesday. Democratic lawmakers say three provisions in the $1.5 trillion tax package violate Senate rules and will need to be amended or removed, before the upper chamber votes.

The House will then need to re-vote on the measure, likely on Wednesday. Earlier in the day, the Republican led House passed the most significant overhaul of the tax code in three decades and the Senate was poised to follow suit, giving Republicans their first major legislative win and delivering the bill to President Trump before Christmas, as he requested.

Tuesday’s 227-to-203 vote in the House split mostly along party lines, with 12 Republicans joining all House Democrats in opposing the bill; the measure is expected to squeak through the Senate with a narrow GOP majority on Tuesday evening.

"This is a once in a generation opportunity," said Senate Majority Leader Mitch McConnell, R-Ky

The centerpiece of the GOP bill is a permanent 40 percent tax cut for big corporations, a change Republicans say is long overdue and desperately needed to make America more competitive in a global economy. Smaller businesses will also see their tax burden shrink significantly.

Though supporters are convinced the cost of lowering tax collections by $1.5 trillion over the next 10 years will be offset by an explosion of economic growth, economists said at best that growth will cover one-third of the cost. Non-partisan estimates project it could add $1 trillion to the national debt over ten years. And laws designed to prevent deficit spending could kick in as early as next year, forcing cuts to popular programs, including Medicare.

The bill will also lower tax rates for Individuals and families temporarily, while increasing the standard deduction and the child tax credit. But because the bill also kills or limits key tax deductions — most notably rolling back the ability of individuals to subtract their state and local taxes from their federal tax bill — the impact on individuals will vary.

One think tank often cited by Democrats, the Tax Policy Center, said in a study released Monday that for people in the middle of the national income scale — making between $48,600 and $86,100 — 91% will see a tax cut averaging $1,090, but 7% will see a tax increase averaging $910 next year.

The report also said the top 1% of taxpayers, those making more than $732,800, would get 20.5% of all the benefits in the tax bill next year.

"Who are they fooling with this bill?" Rep. Rosa DeLauro, D-Conn., said on the House floor as the debate opened. "This bill fails the middle class and benefits the richest 1 percent."

Republicans dismissed questions about whether the bill was skewed toward the wealthy.

“With this tax reform, families at every income level will get a tax cut,” House Speaker Paul Ryan, R-Wis., told reporters on Tuesday. “This is real relief and people are going to see this in their paycheck before too long.”

Ryan said he had “no concerns whatsoever” that the tax bill would turn into a political liability for the GOP as they head into the 2018 elections.

The tax plan is deeply unpopular, according to numerous national polls. A Monmouth University Poll released on Monday, for example, found that Americans disapproved of the GOP bill by a nearly 2-to-1 margin; only 26 percent of respondents said they approved of the plan, while 47 percent said they didn’t like it.

Ryan said public opinion will shift once Americans start seeing bigger paychecks and more jobs.

“Results are going to make this popular,” Ryan said.

Democrats said the opposite would happen.

“This bill will be an anchor around the ankles of every Republican,“ Senate Minority Leader Charles Schumer, D-N.Y., said Tuesday. “It so helps the wealthy and the powerful corporations, it does so little, and even hurts many in the middle class, it’s a loser. … Republicans will rue the day that they passed this tax bill.”

The GOP legislation also includes a major roll back of the 2010 Affordable Care Act; it repeals that law's "individual mandate" requiring most Americans to obtain health insurance.

Republicans added that provision because it will save the federal government about $381 billion between 2018 and 2026, most of that from a decrease in Medicaid spending, according to a report from the nonpartisan Congressional Budget Office.

Democrats blasted that as an assault on low-income Americans who rely on Medicaid for their health insurance. They point to the CBO's analysis finding a repeal would lead to 4 million fewer people with insurance next year, 13 million fewer in 2027, and premium rate increases of about 10% for those who remain in the exchanges.

Wash. Delegation on Tax Bill:

Washington’s House members voted along party lines, with the four Republican members in favor and six Democrats opposed. Their statements are below:

Rep. Cathy McMorris Rodgers, R-5th District
"For people in Eastern Washington, I often hear families and individuals say that they feel like they are working harder and harder but falling behind," said McMorris Rodgers. "I'm excited about what the Tax Cuts & Jobs Act means for them."
Statement on Facebook

Rep. Dave Reichert, R-8th District
“Today is truly historic,” Rep. Reichert said. “We accomplished something that has not been successfully done since 1986. We passed a tax bill to make our tax code work for the American people. It puts more money in your pocket through lower tax rates and an increased standard deduction. To grow wages and jobs here at home, we provide tax relief for businesses big and small. While I know these provisions will benefit the American people, I am deeply disappointed that this Conference report rejected my request to remove drilling in the Arctic National Wildlife Refuge from the bill. Through my years on the Ways and Means Committee, I have consistently evaluated each tax proposal on what it would mean for families and for our economic growth. I am proud to support this bill because it passes this test and I look forward to seeing America better off for it.”

Rep. Jaime Herrera Beutler, R-3rd District
“Once this tax cut bill is signed into law, the average Southwest Washington family of four will keep $2,385 more of what they earn,” said Jaime.

“The bill we passed today improves on the earlier version I voted for in several measurable ways for folks in all phases of life – from those preparing to begin their careers, to those in retirement. It protects virtually every middle-class homeowner by raising the mortgage interest deduction to $750,000, it expands vital relief for those families with high medical expenses, it doubles the child tax credit, and reinstates protection for all state and local taxes up to $10,000. I’m pleased that graduate students preparing to enter the workforce will have reduced tuition exempted from taxes – another improvement from our earlier bill. For those planning for retirement, popular savings accounts such as IRA’s and 401(k)s are preserved, and relief from the death tax that inhibits passing small family businesses and farms to the next generation is doubled. For the 75 percent of Southwest Washington taxpayers who use standard deduction, they will now see nearly double the amount of their money protected from taxes, and even more taxpayers will now be able to take advantage of the standard deduction.”


Rep. Dan Newhouse, R-4th District
“As Republicans, we promised a unified plan to reduce the burden of taxes and government mandates on American families and businesses, and that is exactly what we have delivered,” said Rep. Newhouse. “Today, we passed the first major pro-growth, pro-family tax reform in 31 years. Doubling the standard deduction—which is used by eighty percent of filers in the Fourth Congressional District—and increasing the child tax credit will provide real relief for working families in Central Washington. Additionally, this bill is a win for small businesses and farmers by allowing them to immediately write off the full cost of new equipment and increasing those who are shielded from the unfair death tax which allows more family farms and small businesses to pass on the success of a lifetime of hard work to the next generation. We promised to remove the individual mandate, which is an unfair tax penalty that hits middle-income families in the Fourth District. With this major reform, that Obama-era burden will be removed once and for all.”

Rep. Suzan DelBene, D-1st District
“In this Ryan-McConnell tax bill, Republicans have gifted the wealthiest corporations and individuals with massive new tax cuts and loopholes to take advantage of,” DelBene said. “Not a mother working two jobs to put food on the table, not a farmer struggling through a bad year, not a senior trying to pay for a prescription, have ever told me that tax reform means corporate cuts on the backs of them and their families. Republicans always promise that the benefits will trickle down to working people, but they never do and they never will. And what’s worse, they’ve made it clear cuts to Social Security, Medicare and Medicaid are next.

“Instead of bringing Democrats and the public into the process, Republicans worked behind closed doors to take care of their corporate special interest allies, the wealthy and the well-connected, while putting middle-class Americans’ finances and healthcare on the chopping block.”

Rep. Rick Larsen, D-2nd District
“The Republican tax conference report is nothing more than a permanent tax break for the wealthiest Americans at the expense of the middle class. Analysis from the Tax Policy Center found that the top one percent of Americans would receive an estimated 62 percent of the bill’s proposed tax cuts- that is more than double the George W. Bush-era tax cuts. In Washington state, the richest one percent will receive an average $7,750 tax cut under the GOP tax bill, while lower income Washingtonians face tax hikes – according to the Institute on Taxation and Economic Policy.

“I stand with my constituents who have called, sent letters, attended community coffees or otherwise made their voices heard about the harm this Republican tax bill would cause. Like the U.S. military retiree in Oak Harbor, who worries about how the GOP tax scam jeopardizes the retirement they have worked a lifetime for by raiding Medicare funds; the couple in Lynnwood who is concerned about the impact of the reduced mortgage interest and SALT deductions on their property value under the new bill and; the low- and middle income families throughout Washington state’s Second District who will struggle to make ends meet once the bill’s temporary, modest tax cuts end,” said Larsen.

“Real bipartisan tax reform should simplify the tax code, support middle-class families and veterans, strongly invest in infrastructure, foster more well-paying jobs, and ensure access to affordable, high-quality health care.

Rep. Derek Kilmer, D-6th District
“Today’s vote is an enormous missed opportunity. Done right, tax reform could help grow our economy, give small businesses a boost, and make it easier for middle class families to get ahead,” Rep. Derek Kilmer said. “Instead, this bill raises taxes on 86 million middle-class families while giving 83 percent of the tax cuts to the wealthiest one percent and adding more than $1.5 trillion to the debt that our kids will have to pay off.”

Rep. Pramila Jayapal, D-7th District
“The GOP tax scam bill is an all-out war on any idea of opportunity in this country. It’s a massive tax break for the ultra-wealthy on the backs of middle class families. It’s outrageous that Republicans in the House voted to pass this love letter to their largest donors and corporations.

“Despite overwhelming opposition from the American people, this tax scam dismantles the Affordable Care Act, throwing 13 million people off their health care. It eliminates most of the State and Local Tax deduction, short-changing communities and resulting in as much as $152 billion in cuts to education funding over the next decade. It runs up the deficit anywhere from $1 trillion to $1.5 trillion, triggering cuts to Medicare and Medicaid. Despite what Republicans say, the fact of the matter is that 80 percent of all tax benefits in this bill go to the top one percent.

“With this heist, Republicans have branded themselves as the party of billionaires and giant corporations—they are robbing the American people and showing zero remorse,” said Jayapal in a statement.

Rep. Adam Smith, D-9th District
KING 5 has reached out for comment.

Rep. Denny Heck, D-10th District
KING 5 has reached out for comment.

Contributing: Herb Jackson

Before You Leave, Check This Out