U.S Trump’s tax bill faces potential Senate Republican opposition
A U.S. Senate Republican tax bill strongly backed by President Donald Trump faced potential opposition from two Republican lawmakers who could prevent the sweeping legislation from reaching the Senate floor.
Senators Ron Johnson and Bob Corker, both members of the Senate Budget Committee, said they could vote against the tax package at a Tuesday hearing that Republican leaders hoped would send the legislation to a full Senate vote as early as Thursday. Each senator is seeking different changes to the legislation.
Their opposition could create the first major hurdle for the Republican tax overhaul in the Senate, where political infighting killed the party’s effort to overturn the Obamacare healthcare law earlier this year.
Corker, a prominent deficit hawk, said he wants his fellow Republicans to add a backstop measure to prevent tax cuts from ballooning the deficit. Johnson said he wants a bigger tax break for “pass-through” businesses, which include small mom-and-pop enterprises as well as some large, non-corporate businesses.
”If we develop a fix prior to committee, I’ll probably support it, but if we don‘t, I’ll vote against it,” Johnson’s office quoted him telling reporters in his home state of Wisconsin.
Republicans have only a one-vote majority on the 23-member budget committee.
The potential “no” votes surfaced after Congress’ Joint Committee on Taxation (JCT) estimated the Republican bill would expand the $20 trillion national debt by $1.4 trillion over a decade.
Republicans have said that economic growth spurred by tax cuts would generate enough new tax revenue to eliminate any new deficit. But Corker said JCT is not expected to release a full macroeconomic analysis of the tax bill ahead of a Senate vote, making a safeguard provision necessary.
“I‘m not threatening anything. I‘m just saying it’s very important for me to know that we’ve got this resolved,” Corker told reporters. Asked if he could vote no on the tax bill at the committee hearing, he replied: “Very possible. Yeah. Sure.”
Corker and other Republican deficit hawks, including Senator James Lankford, have been holding talks with Senate tax writers and the administration about adding a provision that would raise tax rates if revenues fall short of expectations.
“We can’t afford to ignore the debt and deficit issues,” Lankford told reporters. “To me, the big issue is how are we dealing with debt and deficit, do we have realistic numbers and is there a backstop in the process just in case we don’t.”
Republicans see the tax bill as their last chance to score a significant legislative achievement in 2017 and save face with voters in next year’s congressional midterm elections. Since Trump took office in January, he and his fellow Republicans have passed no major legislation, despite controlling both chambers of Congress and the White House.
The Senate bill would slash the corporate tax rate to 20 percent from 35 percent after a one-year delay. It would impose a one-time, cut-rate tax on corporations’ foreign profits, while exempting future foreign profits from U.S. taxation.
Financial markets have rallied since Trump’s stunning 2016 election victory, partly on hopes of tax cuts for businesses. The Senate bill would deliver these, although its impact on individual Americans and families would be more mixed.
BILL WOULD HURT THE POOR, CBO SAYS
Meanwhile, the Congressional Budget Office (CBO), another nonpartisan research unit of Congress, said the number of Americans with health insurance would fall by 13 million by 2027 under the Republican tax bill, which would repeal an Obamacare federal fine meant to encourage people to buy health insurance.
Such a change would shrink the supply of healthy, young people insured and drive up healthcare insurance premiums. The CBO said this would make people with incomes below $30,000 net losers under the bill.
Most of those earning more would be net winners, especially those with incomes between $100,000 and $500,000, it said.
Source: Reuters
