The Senate voted 52-48 along party lines Wednesday to begin debate on the Senate GOP tax bill. Several Republicans who have not committed to voting for the final bill, including Sens. Collins, McCain, Corker and Flake, voted in favor of moving forward to debate. But final passage could be another story.
Currently there is no firm agreement on the trigger provision Sen. Corker wants, no pay-for to partially keep the state and local tax deductions Sen. Collins wants, and no language on the pass-through changes for small businesses sought by Sens. Johnson and Daines. Senate Republicans are about to overhaul the tax code, and they don’t know what’s in their bill yet;
Senate Republicans are in such a rush to pass a tax overhaul in the next few days that they voted to start debate on a bill that could still undergo a bevy of last-minute changes they haven’t seen in writing — changes that could dramatically affect the US economy over the next decade.
But most Republicans aren’t letting some last-minute deal cutting that could mean billions of dollars in tax increases, tax cuts, or federal spending cuts get in the way of moving the bill along.
Even Sen. Bob Corker (R-TN), who’s one of the senators most skeptical of the bill and is pushing for the major addition of automatic tax hikes if the federal deficit grows too quickly, voted to start debate on the bill. He had told reporters earlier that he couldn’t describe the changes “until we get it in writing.” Corker later told reporters they could “throw away” anything they’d heard about the deal because it is “still evolving.”
What we don’t know about the Senate tax bill right now
Everything is open for negotiation as Senate Republicans search for their elusive 50th vote. President Trump came to the Capitol on Tuesday and seemed willing to agree to about anything, even stabilizing Obamacare, to grease the wheels for a big corporate tax cut.
Significant changes are under discussion to assuage senators worried about pass-through businesses (Johnson and Steve Daines of Montana), the federal deficit (Corker and Jeff Flake of Arizona), and the child tax credit (Marco Rubio of Florida and Mike Lee of Utah), as well as Susan Collins, the Senate’s most moderate Republican, who wants to change the treatment of state and local taxes and to stabilize Obamacare.
Those changes could redistribute hundreds of billions of dollars in the US economy. One outside tax expert guesstimated that Johnson’s desired change for pass-through businesses would cost something like $55 billion over 10 years.
These are the major issues still up for debate as the Senate speeds toward a vote on its tax plan:
- The Corker trigger. Corker wants to set up automatic tax hikes if the federal deficit grows too quickly under the GOP tax plan. We don’t know what the threshold would be to initiate those tax increases or which taxes would be increased. Some senators would rather trigger automatic spending cuts instead of tax hikes under this plan.
- The pass-through issue. Johnson and Daines have pushed to bump up the share of business income that owners of these pass-through businesses can deduct and exempt from taxation, from 17.5 percent to 20 percent. (By late Wednesday, Johnson was proposing even bigger tax cuts.)
- The state and local tax deduction. The Senate’s bill would currently completely eliminate this deduction, to the tune of $1 trillion over 10 years. But Collins wants to allow people to continue deducting up to $10,000 in property taxes, which Trump is said to have agreed to.
- The Rubio-Lee child tax credit. The two senators want to further expand the child tax credit and pay for it by slashing the corporate rate slightly less (to 22 percent instead of 20 percent). That could cost, by one outside estimate, $200 billion or more. Trump is said to oppose this proposal.
That’s hundreds of billions of dollars at stake via details still being ironed out, behind the scenes, on the same day that the Senate voted to start debate on the bill.
This is not how a major rewrite of the tax code is to be done. This is an abomination of the legislative process. It is GOP authoritarianism run amok.
The final countdown on the Senate GOP tax bill has begun, and procedural maneuvers by the Septuagenarian Ninja Turtle, Senate Majority Leader Mitch McConnell, are going to determinative of what the Senate is actually voting on. Dylan Scott explains The final steps for the Republican tax bill in the Senate:
Senate Republicans have entered a frantic rush to put a tax overhaul on the Senate floor in the next few days. Republicans are readying a bevy of last-minute changes that could redirect billions of dollars in the US economy over the next decade, changes that senators hadn’t even seen in writing mere hours before they voted to start debate on the tax bill.
But the bill has cleared its first important hurdle. The Senate voted on Wednesday evening, 52 to 48, to start debate on the Republican tax plan.
But that’s really just the opening act. Over the next two days, the fate of the nation’s tax code will be adjudicated on the Senate floor.
The centerpiece of the Republican tax plan is a huge corporate tax cut, at a time when most Americans think businesses should be taxed more, not less. It also slashes taxes on “pass-through” businesses disproportionately used by rich people (like President Trump) to lower their tax burden. The top tax rate for the richest Americans would also be cut, and the estate tax for wealthy inheritances would be rolled back.
More changes could be made on the Senate floor, where a process colloquially called “vote-a-rama” could force some tough votes for lawmakers on both sides and, maybe, change the substance of the final plan that the Senate passes. How this all shakes out could determine whether — and, more importantly, how — Republicans overhaul the nation’s tax code for the next generation.
The path forward is complex. Here’s what happens next.
1) McConnell technically made a motion to start debate on the House tax bill. That step — known as the motion to proceed — required 51 votes.
Even some skeptics of the tax bill like Sens. Bob Corker (R-TN) and Jeff Flake (R-AZ) voted in favor of opening the debate. It would have been a shock if the Senate failed to even start debate on the bill.
2) The Senate would debate the House legislation on the floor for 20 hours, with that time divided evenly between Republicans and Democrats. That’s 20 hours of debate time, not real time, so the debate could last a couple of days.
3) At the end of the debate, there would be a vote-a-rama, during which senators can offer an unlimited number of amendments to the bill. Amendments that are considered “germane” to the tax legislation need 51 votes to be added to the bill.
4) At some point, either before or after the vote-a-rama, McConnell would offer the Senate bill as a substitute for the House bill. The timing would depend on whether McConnell wants the amendments brought up during vote-a-rama to be added to the final bill. This will be a key decision: If McConnell waits until the end to introduce his substitute, then none of the amendments that were added during vote-a-rama will actually be part of the final legislation.
The “when” of the substitution is crucial: If, purely hypothetically, a proposal by Sens. Marco Rubio (R-FL) and Mike Lee (R-UT) is approved and added to the House bill but the Senate bill is substituted later, that policy change would not actually be in the bill that comes up for final passage.
5) The Senate would take a final vote on passage of the amended Senate bill. That would require 51 votes. Just because the tax bill got a majority to start debate doesn’t mean it will get the votes to pass. The health care debate was started, but then every bill that Republicans put forward failed to get 51 votes. Several Republicans — Corker, Flake, John McCain, Susan Collins — are thought to be on the fence.
Vice President Mike Pence could break a 50-50 tie.
6) If the Senate passes the bill, the House could either take it up and pass it as is or the two chambers could enter into conference negotiations to produce a new plan.
Both the Senate and House would need to pass the conference bill, which requires 50 votes again in the Senate and a bare majority, 218 members, in the House.
7) Once both chambers have passed the same tax bill, President Trump would sign it into law.
The Arizona Daily Star editorialized, Principles dictate ‘no’ vote on tax bill for McCain and Flake: “We ask that Sens. John McCain and Jeff Flake continue to stand by their principles and vote ‘no’ on this tax bill.”
The Arizona Republic has not (yet) taken an editorial position, but columnist Laurie Roberts writes John McCain can lead (again) with his vote on Senate tax bill: “All eyes are on McCain (and Sen. Jeff Flake) as the Senate prepares to vote on President Donald Trump’s must-have tax cut bill.”
Flagstaff’s Arizona Daily Sun editorialized, Republicans’ haste warps their tax legislation: “[T]here should be a clear path for deficit hawks like Senator Bob Corker of Tennessee and Jeff Flake of Arizona, or defense hawks like McCain, to send this bill back to the Finance Committee for real hearings, review, debate and analysis. That’s called regular order.”
Seung Min Kim from POLITICO asked Sen. McCain where he stands on the Senate GOP tax bill. His response:
This is remarkably similar to comments McCain made before he took to the floor of the Senate to excoriate his Senate colleagues about the need for bipartisanship and regular order and voting against the “Obamacare” repeal. The very same conditions exist here. It’s time for another lecture from Senator McCain.
Just a reminder, Senator McCain voted against the Bush tax cuts that favored corporations and the wealthy over the middle class. If John McCain takes his own words seriously, he can’t back this tax bill:
McCain also has a history of opposing tax plans that favor the nation’s wealthy at the expense of its middle class. He voted against the George W. Bush tax cuts twice, one of only a few Republicans to oppose them, on those grounds. Most analyses project that the top 1 percent would yield most of the benefits of this new Republican tax plan and many poor and middle-class Americans would actually pay higher taxes than now.
McCain could very well vote to start debate on the tax bill, which is expected to come as soon as Wednesday [he did], much as he did in the health care drama. He doesn’t want to hold up the process. But when the actual vote to pass the plan comes, all eyes will be on him and his thumb once again. Up or down?
Senator Jeff Flake, however, voted for “Obamacare” repeal. Flake has built his career around being a deficit peacock. The GOP tax bill explodes the federal deficit and adds to the national debt. Just once in his Senate career before he goes he should do the right thing and vote against this terrible GOP tax bill. It’s time for your “Profiles in Courage” moment senator.
Call Sens. John McCain and Jeff Flake now and demand that they vote against this terrible GOP tax bill.