WASHINGTON — Republicans tweaked a $1.4 trillion tax-cut package to win over holdout GOP senators Saturday and passed the first sweeping reform of the nation’s tax code in 30 years.
The Senate voted 51-49 to pass the tax-cut package that puts the Republican-led Congress a step closer to giving President Donald Trump his first legislative victory.
Senate Majority Leader Mitch McConnell, R-Ky., called the legislation a “once in a lifetime” opportunity to cut taxes for corporations, businesses and individuals.
But Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, said the legislation “betrays the middle-class” for faceless corporations.
“This vote will not be forgotten,” Wyden said.
The bill passed after an evening of parliamentary manuevers and heated rhetoric as Republicans muscled the legislation through the process over objections from Democrats who chafed at the GOP tactics.
Sens. Dean Heller, R-Nev., and Catherine Cortez Masto, D-Nev., sided with their respective parties during those maneuvers.
“The U.S. Senate today passed sweeping legislation that will give hardworking Nevadans and Americans throughout the country the break that they deserve,” Heller said.
Republicans touted their bill as one that would put money into the pockets of individuals in every tax bracket and give corporations huge breaks to boost the economy and create jobs.
But the bill also would add $1 trillion in debt over a decade by eliminating revenue-generating taxes, according to the Joint Committee on Taxation. The analysis also undercut GOP projections on economic growth, saying the bill would provide only a 0.8 percent boost to the economy.
Republican deficit hawks wanted a “trigger” mechanism to automatically implement tax hikes if growth projections and generated revenues did not materialize. When GOP leaders declined to put the trigger in the bill, Sen. Bob Corker, R-Tenn., announced his opposition.
“I’m disappointed. I wanted to get to yes,” Corker said. “But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation I believe, based on information I currently have, could deepen the debt burden on future generations.”
But other hawks like Sens. James Lankford, R-Okla., Steve Daines, R-Mont., and Jeff Flake, R-Ariz., announced they would support the bill without the trigger.
Flake said he would vote in favor of the package after receiving reassurances it is “fiscally responsible and promotes economic growth.”
Collins announces support
Another holdout, Sen. Susan Collins, R-Maine, announced her support after a promise by McConnell to include a federal deduction of up to $10,000 for state and local taxes paid by individuals.
Collins said McConnell also assured her that the bill would not force a $25 billion cut to Medicare in the first year.
AARP, the lobby for retirees, cited a Congressional Budget Office analysis that found the bill would provide $136 billion in tax cuts in 2018 and force $25 billion in cuts to Medicare that year under current budget rules.
An AARP analysis also found that those 65 and older would receive an initial tax cut but would face higher taxes in 2027, when individual tax cuts in the Senate bill would sunset.
Corporate tax rates would be permanently reduced from 35 percent to 20 percent under the bill. President Donald Trump and GOP leaders said those cuts would spur a $4 trillion surge in corporate investment in the United States that would create millions of jobs.
Sen. Jeff Merkley, D-Ore., however, called it “Wall Street welfare.”
Democrats were united against the bill. They said the package offered a “bag of goodies” to the wealthiest families, large businesses and corporations, but just peanuts for middle-class families.
The Joint Committee on Taxation said that, because of the sunset provision on individual tax cuts, most families earning $75,000 a year or less would see higher taxes in 2027.
“This is not middle-class tax relief,” said Sen. Bill Nelson, D-Fla.
The Main Street Alliance, a national group that represents small businesses, including 10 from Nevada, opposed the bill because it does not improve communities through affordable health care, well-funded schools and maintained roads.
Small-business owners, like Dee Holden in Las Vegas and retired broker Gil Vogel of Liberty Realty in Pahrump, signed a letter sent to the House and Senate that said the tax-cut plans would “ultimately slash programs that are vital for small business owners like me.”
But the National Federation of Independent Business, an association representing small businesses, reversed its initial opposition to the Senate bill after GOP lawmakers improved cuts for mom-and-pop shops.
For individuals, the bill would double the standard deduction on federal forms to $12,000 and $24,000 for couples.
Heller was instrumental in increasing the child tax credit, which he said would help Nevada families living “paycheck to paycheck.”
The Senate bill also eliminates the individual mandate in the Affordable Care Act, which requires people to purchase health care plans or face an IRS penalty.
A CBO analysis of the provision, however, said the bill would increase premiums purchased on public exchanges by 10 percent and leave 13 million more Americans without insurance by 2027.
Cortez Masto said the cost of the “GOP tax scam” would be “too high for the 13 million Americans” who will become uninsured if they lose lifesaving health coverage.
Repeal of the ACA individual mandate is not included in a version of the bill passed by the House on Nov. 16.
That bill, which passed along party lines, would eliminate federal deductions for medical expenses and student loan interest and cap the mortgage interest deduction at $500,000, down from $1 million currently.
Differences in the two bills would be ironed out in a House-Senate conference committee to produce a final bill.