The Latest: Estimate says tax bill adds $1.46T to deficit
WASHINGTON (AP) — The Latest on Republican tax overhaul legislation (all times local):
The preliminary deficit estimate for the final version of the GOP tax bill says it would add $1.46 trillion to the budget deficit over the coming 10 years.
The true deficit cost is likely to be even higher if lawmakers extend the tax cuts for individuals before they expire at the end of 2025. This “sunset” gimmick is used to make the tax cuts more generous over the eight years they would be in force.
The Joint Committee on Taxation analysis combines revenue losses from rate cuts with tax increases from repeal of deductions and other preferences. All told, cuts for individuals and businesses taxed under the code for individuals account for $1.1 trillion of the net tax cuts.
The White House is praising the Republican tax bill released Friday.
Press Secretary Sarah Huckabee Sanders says President Donald Trump “applauds the House and Senate conferees on coming to an agreement” on a sweeping tax bill “and looks forward to fulfilling the promise he made to the American people to give them a tax cut by the end of the year.”
The legislation would slash tax rates for big businesses and the richest Americans. Reductions for others would be lower.
Sanders says signing the legislation will make good on Trump’s campaign promise “to institute pro-growth economic policies that will provide much needed financial relief to all Americans.”
The White House and Republicans in Congress say the plan will grow the economy and make the U.S. more competitive.
The Republican tax overhaul would keep a popular deduction for Americans with expensive medical bills.
Taxpayers can deduct medical expenses not covered by insurance when they exceed 10 percent of adjusted gross income. The threshold is 7.5 percent for taxpayers who are 65 or older.
The bill temporarily expands the medical expense deduction by applying the 7.5 percent threshold to all taxpayers in 2018 and 2019.
A return to the 10 percent threshold takes place beginning in 2020.
The House bill would have eliminated medical expense deductions, so senators ended up prevailing in negotiations.
Sen. Susan Collins, R-Maine, sought to reduce the threshold for deducting medical expenses, saying it would particularly help seniors and people with chronic conditions.
Count commuters among the losers in the Republican tax bill that the House and Senate are expected to vote on next week.
The final bill agreed to by Republican negotiators and released late Friday eliminates the tax incentive for private employers that subsidize their employees’ transit, parking and bicycle commuting expenses.
Companies currently can provide parking or transit passes worth up to $255 a month to employees as a benefit to help pay for their commuting expenses, then deduct the costs from their corporate taxes.
Businesses would no longer be able write off $20 a month per employee to cover the expense of commuting by bicycle.
The tax bill barreling toward a final vote in Congress guts the most unpopular “Obamacare” provision, its requirement that virtually all Americans carry health insurance or face fines.
Politically, the move is a winner for Republicans, who otherwise would have little to show for seven years of rhetoric and repeated legislative efforts to kill the Affordable Care Act.
But if estimates by the nonpartisan Congressional Budget Office are right, it will lead to more uninsured people and higher premiums for those buying individual health insurance policies.
Congress may then find itself considering other ways to nudge people to get health insurance.
Other popular parts of the Affordable Care Act would remain in place, including subsidized premiums, “essential” benefits and protections for people with pre-existing medical conditions.
A tax bill moving forward in Congress would open Alaska’s Arctic National Wildlife Refuge to oil and gas drilling, a longtime Republican priority that most Democrats fiercely oppose.
The 19.6-million-acre refuge in northeastern Alaska is one of the most pristine areas in the United States and is home to polar bears, caribou, migratory birds and other wildlife.
Alaska Sen. Lisa Murkowski and other Republicans say drilling can be done safely with new technology, while ensuring a steady energy supply for West Coast refineries.
Democrats and environmental groups say the GOP plan risks spoiling one of the nation’s most pristine areas and is especially unwise at a time when U.S. oil production is booming, with imports declining and exports reaching record levels.
The final version of the GOP tax bill would provide a $2,000 per child tax credit to families making up to $400,000 a year.
That doubles the child tax credit from the current maximum of $1,000 and makes it available to a greater number of middle- and upper-bracket families.
The credit was a top priority of GOP Sen. Marco Rubio of Florida, who won a late-stage concession that would make up to $1,400 of the credit available as a tax refund to lower- and middle-income families with relatively small tax bills.
It would begin to phase out for families earning above $400,000. That’s down from $500,000 in the original Senate measure, which passed earlier this month.
The sweeping Republican tax overhaul would cut rates for corporations and the wealthy while offering modest reductions for the middle class.
The bill, according to a summary Friday, would set seven tax brackets, lowering the top rate from 39.6 percent to 37 percent.
It would expand the child tax credit, preserve the adoption tax credit and allow Americans to deduct some medical expenses. It would eliminate the requirement that Americans buy health insurance under Barack Obama’s Affordable Care Act.
Republicans were unveiling the bill later in the day and plan to vote next week after securing the support of two key senators — Marco Rubio of Florida and Bob Corker of Tennessee.
The final version of the GOP tax bill would create seven tax brackets, including a new 37 percent rate for top-end wage earners.
That’s according to a summary of the measure provided to The Associated Press.
The new rates start at 10 percent and rise to 12, 22, 24, 32, 35 and 37 percent.
The measure also lowers the top corporate tax rate from 35 percent to 21 percent. It provides sweeping tax deductions to other businesses lowering their top effective tax rate to about 30 percent instead of 39.6 percent.
It retains key tax breaks that would have been killed under previous versions, including a deduction for medical expenses and an exemption for graduate school tuition waivers. It contains a compromise $10,000 deduction for state and local taxes.
Republican Sen. Bob Corker says he will vote for the sweeping GOP tax package.
The Tennessee senator, who opposed the original Senate bill, said in a statement Friday that although the bill is far from perfect, the once-in-a-generation opportunity “to make U.S. businesses domestically more productive and internationally more competitive is one we should not miss.”
Corker had complained about adding to the nation’s $20 trillion debt with deep tax cuts.
In his statement, Corker said, “I realize this is a bet on our country’s enterprising spirit, and that is a bet I am willing to make.”
Corker is retiring when his term ends next year.
Republican Sen. Marco Rubio will vote for his party’s $1.5 trillion tax bill. That gives a major boost to the prospects that GOP leaders will be able to push their prized measure through Congress next week.
The Florida lawmaker had said he’d oppose the legislation unless his colleagues made the per child tax credit more generous for low-income families.
On Friday, Republicans said the final legislation would do just that. Lawmakers said the bill would now let low-earners using the credit get up to $1,400 in IRS refunds if they owe little or no taxes. That’s up from $1,100 in the earlier version.
Rubio tweeted that the change is “a solid step toward broader reforms which are both Pro-Growth and Pro-Worker.”
Rubio spokeswoman Olivia Perez-Cubas said that meant Rubio would vote yes.
Ailing Republican Senators John McCain and Thad Cochran will be able to cast their votes for the GOP tax package next week.
That’s the word from fellow GOP Sen. Rob Portman of Ohio. He told reporters on Friday: “All of our thoughts and prayers go out to Sen. McCain. He’s having a tough time. I am told he will be here next week and voting. And more importantly we all wish him the best of health.”
McCain, 81, is hospitalized at Walter Reed Medical Center where the Arizona senator is being treated for the side effects of brain cancer treatment.
Thad Cochran, 80, of Mississippi had a non-melanoma lesion removed from his nose earlier this week.
Portman said: “I’m told he will be here next week also.”
Several Republican senators are optimistic about passage of the far-reaching GOP tax package next week.
Ohio Sen. Rob Portman, one of the House-Senate negotiators, said Friday he believes they have the votes to pass the bill. His comments came as fellow Republican, Florida Sen. Marco Rubio, pressed for expansion of the child tax credit, saying he’s a “no” vote if it’s not a significant boost.
Pennsylvania Sen. Pat Toomey told reporters: “All I’m going to say is I’m optimistic that we have enough support to pass the bill.”
Wyoming Sen. Mike Enzi said “there’s a problem with every single senator until the last vote is cast.” He added: “There are changes in this bill that I think can form some of the things he (Rubio) asked for.”
Republican Congresswoman Kristi Noem says the child tax credit has been expanded for low-income families in an effort to win Sen. Marco Rubio’s support for a sweeping tax package.
The tax package would double the per-child tax credit from $1,000 to $2,000. The bill originally made a portion of the credit — $1,100 — available to families even if they owe no income tax. Noem says that amount has been increased to $1,400. Rubio said he wanted the $1,100 figure increased, but he did not say by how much.
Low-income taxpayers would receive the money in the form of a tax refund, which is why it’s called a “refundable” tax credit.
Noem, of South Dakota, said the change should win Rubio’s support but she had not heard directly from him.
President Donald Trump says he’s seen the latest version of the $1.5 trillion tax overhaul package moving through Congress and he predicts it will do “very, very well.”
The president told reporters Friday Republicans should be in position to pass the package as early as next week and says it will be “monumental.”
Trump also addressed prospects for increasing the child tax credit, one of the final sticking points in negotiating the package.
He said that where Democrats have “done nothing” for children, the plan will include “a tremendous child tax credit and it is increasing on a daily basis.”
The size of the child tax credit was one of the final points being ironed out as GOP leaders drive to push through their big tax package.
The GOP leaders are trying to muscle the bill through Congress next week, handing Trump his first major legislative victory by Christmas.
Republican Marco Rubio’s potential defection over a tax credit for low-income parents has put a speed bump into GOP leaders’ drive to push their big tax package through the Senate, but it’s a complication that’s likely to be resolved.
The Florida senator says he’ll vote against the $1.5 trillion bill unless House and Senate negotiators expand the tax credit that low-income Americans can claim for their children.
That puts the Republicans’ razor-thin margin in the Senate closer to the edge. The GOP leaders are straining to muscle the bill through Congress next week, handing President Donald Trump his first major legislative victory by Christmas.
The Senate turmoil erupted the same day that a key faction of House Republicans came out in favor of the bill, boosting its chances.