WASHINGTON – Senate Republicans headed toward passage Friday of a $1.5 trillion tax bill that bestows massive benefits on corporate America and the wealthy while delivering mixed blessings to everybody else.
The vote on final passage, expected late Friday night or early Saturday, was shaping up to be 51 to 49, barring unexpected last-minute developments. Sen. Bob Corker (R-Tenn.) was the lone GOP holdout.
The measure would still have to be reconciled with an earlier House-passed version before being sent to President Donald Trump. Yet in getting the bill through the Senate, Republicans would succeed where they failed earlier this year, when their efforts to repeal the Affordable Care Act collapsed in mortifying fashion.
This time, urged on by donors and fearful of facing voters in next year's midterm elections without a legislative achievement to show, Republicans said time and again that failure was not an option.
"The American people wanted change," said Sen. John Barrasso, R-Wyo. "We were able to deliver."
The centerpiece of the GOP plan is a move to lower the corporate tax rate from 35 percent to 20 percent, starting in 2019. The Senate tax bill would also temporarily cut tax rates for families and individuals until 2025.
But the bill would kill a number of tax benefits. It would subject fewer people to the estate tax, a levy charged on massive inheritances, but stop short of eliminating that tax altogether.
The most recent review of the bill by the Joint Committee on Taxation, Congress's nonpartisan tax analysts, found that only 44 percent of taxpayers would see their burden reduced by more than $500 in 2019 but that high earners would fare much better than the poor under the bill.
And the bill makes other changes that reach far beyond the tax code itself. It repeals the individual mandate from the Affordable Care Act, a major change that was added in recent weeks as part of a broader GOP effort to dismantle the Obama-era law. The individual mandate creates penalties for many Americans who don't have health insurance, but the repeal would leave 13 million more people uninsured. It authorizes oil drilling in the Arctic National Wildlife Refuge in Alaska. And by curtailing deductions for state and local taxes, it will put pressure on some state and local spending on education, transportation and public health programs.
The tax package still must clear a couple more hurdles before it can become law. There are numerous differences between the House and Senate versions, ranging from when certain tax cuts expire to how the estate tax is handled, and though none are seen as show-stoppers, complications could arise. There will be major implications for the taxes paid by families and individuals based on how those discussions go. And the negotiations over the tax bill will proceed as Congress simultaneously faces a Dec. 8 deadline for government funding to expire.
Nonetheless, GOP leaders still aim to get a final bill on Trump's desk before Christmas.
For Trump, a victory on the tax plan would stand as a signal triumph, in sharp contrast with the political troubles besetting the White House on other fronts, especially with the Senate action coming on the same day that former national security adviser Michael Flynn pleaded guilty to lying to the FBI about his contacts with the Russian ambassador.
In a span of hours Friday, Senate GOP leaders secured the final few votes they needed, from Sens. Ron Johnson, R-Wis., Jeff Flake, R-Ariz., and Susan Collins, R-Maine.
The concessions made to get them on board forced GOP leaders to add more than $250 billion in tax cuts for individuals and businesses to their plan. To offset some of these costs, they had to abandon efforts to fully repeal the alternative minimum tax for individuals and companies, according to a brief summary of the changes that was shared with GOP members. Instead of fully repealing the AMT, they will now try to scale it back.
The AMT was put in place in the 1980s as a way to prevent wealthier Americans from using tax deductions to avoid paying taxes.
Flake announced his "yes" vote after he said he had secured leadership backing for two priorities: one related to how businesses can deduct major investments like equipment purchases and the second involving a solution for immigrants brought illegally to the United States as children.
"Having secured both of those objectives, I am pleased to announce I will vote in support of the tax reform bill," Flake said in a statement.
Flake said his deficit concerns were allayed by a new approach to the bill's expensing deduct.