WASHINGTON, D.C. – The Republican-controlled U.S. Congress approached a major test on Thursday of its ability to enact sweeping tax cuts, as lawmakers prepared for their first full-scale vote on tax legislation.
Republicans in the House of Representatives were expected to take up their bill to cut federal tax rates on corporations, small businesses and individuals after an 11:30 a.m. meeting with President Donald Trump, who wants to sign a tax package into law before year end.
House Speaker Paul Ryan told Fox News early on Thursday he was confident his chamber had the votes to pass their version of the plan. A vote was expected early on Thursday afternoon.
“Big vote tomorrow in the House. Tax cuts are getting close!” the Republican president tweeted on Wednesday night.
But Trump’s tax reform hopes have begun to encounter resistance in the Senate, where the Republicans’ narrow majority means they have to keep almost everyone in the party on board. The Senate version of the tax bill has faced criticism from some Republican lawmakers, including Senator Susan Collins, who helped sink a Republican effort to repeal Obamacare earlier this year.
Senate Republicans have made the risky decision to tie their tax plan to a repeal of the mandate for people to get healthcare insurance under former Democratic President Barack Obama’s Affordable Care Act, exposing the tax initiative to the same political forces that wrecked their anti-Obamacare push.
Republican Senator Ron Johnson said Trump called him Wednesday night after Johnson announced his opposition to the current Senate plan over what he said were unequal rates for small businesses and non-corporate enterprises known as “pass-throughs,” versus corporations.
Still, Johnson said he was hopeful a final bill could be passed by year’s end.
“I’m trying to fix it, and I want to vote yes,” Johnson told CNBC, adding that Trump told him he would meet with Treasury officials on the issue. The president’s public schedule did not list any Department of Treasury meetings for Thursday.
Republicans have long promised tax cuts and they see enacting the legislation as critical to their prospects of retaining power in Washington in the November 2018 congressional elections. Despite controlling the White House and Congress, Republicans so far have no major legislative victories from 2017 to show voters.
“The American people have waited years for a fair, simple, and competitive tax code. Right now, in this moment, we stand on the doorstep of delivering,” Kevin Brady, chairman of the tax-writing House Ways and Means Committee, said during the House tax reform debate.
Democrats have condemned both the House and Senate tax plans as giveaways to the wealthy and U.S. corporations, pointing to analyzes showing that millions of Americans could end up with a tax hike because of the elimination of state and local tax deduction, hitting like California and New York, which have high state and local taxes, hardest.
“This is not a tax plan. This is a tax scam,” said Representative Maxine Waters, a California Democrat.
Nonpartisan congressional analysts have also said the provision to repeal the health insurance mandate in the Senate version would drive up premium costs because millions of people would no longer be mandated to buy insurance. It also sets individual tax rate cuts to expire while reductions for corporations are permanent.
The Senate and House tax plans must eventually be reconciled and merged into a final plan that can pass both chambers before it goes to Trump to sign into law.
“We’ll find a middle ground and we’ll get it to the president’s desk … This is a big deal for us,” Republican Representative Tom Cole told MSNBC.
The main challenge facing Republicans remains the 100-seat Senate, where they can lose no more than two votes from their 52-48 majority if they hope to enact tax reform.
Senator John McCain, a Republican who also voted against his party’s healthcare overhaul effort earlier this year, and his colleagues Bob Corker and Lisa Murkowski, are considered critical votes along with Collins.