House Republicans approved the most sweeping rewrite of the US tax code in a generationon Tuesday but immediately ran into trouble with Senate rules and will have to vote again on Wednesday.
The House passed the bill 227 to 203, with 12 Republicans voting against the plan and no Democrats supporting it. Final passage of the measure will mark the first major legislative success for Trump since taking office.
However, the bill will face a procedural hurdle forcing the House to vote on it again as two minor parts in the bill fell foul of the Senate’s parliamentary rules. Unless stripped, the bill would require 60 votes to pass in the Senate instead of a simple majority – and problem which would likely doom its chances of passage.
Democrats say the failure to write a bill that would comply with Senate rules – a avoidable misstep – underscores the slapdash manner and lightening fast speed at which Republicans assembled their tax overhaul.
“In the mad dash to provide tax breaks for their billionaire campaign contributors, our Republican colleagues forgot to comply with the rules of the Senate,” Senator Bernie Sanders, the ranking member of the budget committee, and Senator Ron Wyden, the ranking member of the Finance Committee, said in a joint statement.
“Instead of providing tax breaks to the wealthiest people and most profitable corporations, we need to rebuild the disappearing middle class,” they added, making clear that they intended to raise the issue and force Republicans to revote.
Democrats raised the same complaint when Senate Republicans provided lawmakers with a copy the 500-page tax plan hours before a vote was scheduled on the legislation. In an online video, Senator Jon Tester, Democrat of Montana, called it “Washington DC at its worst” as he flipped through the pages, showing off the handwritten changes in the margins.
After the Senate bill was passed, congressional negotiators worked in a conference committee to correct drafting errors and address concerns over special-interest provisions slipped in at the last minute.
The Senate is still expected to vote on the legislation on Tuesday after stripping out the two offending provisions. One measure allows those using college savings plans towards the cost of home schooling. The other would exempt colleges with fewer than 500 students from being hit by a tax on college endowment. That provision only affects one school, Berea College in Kentucky. A third issue related to the legislation’s “short title”: “The Tax Cuts and Jobs Act”.
After the House vote, Trump praised House Republican leadership for delivering the $1.5tn tax cut plan.
Despite the delay, Congress is still expected to send the bill to Trump in time to deliver what he has promised would be a “big, beautiful Christmas present” for the nation.
Nancy Pelosi, the House minority leader, went so far as it call it “the worst bill in history” in a press conference on Tuesday. She described it as “an all-out looting of America, a wholesale robbery of the middle class” and said: “The GOP tax scam will go down, again, as one of the worst, most scandalous acts of plutocracy in our history.”
The tax plan enacts a deep and permanent cut for corporations, slashing the top rate from 35% to 21%. The bill also includes tax cuts for individuals and families of all income levels, with the largest breaks going to the wealthiest Americans. The individual tax cuts are slated to expire in 2025, a move to comply with Senate budget rules, but Republicans said a future Congress would extend them.
“This is one of the most important pieces of legislation that Congress has passed in decades to help the American worker to help grow the American economy,” Paul Ryan, the House Speaker, said moments after the bill passed. “This is profound change and this is change that is going to put our country on the right path.”
Congressman Steve Scalise, a Republican from Louisiana, added: “Today the impossible became the inevitable again.”
Democrats were excluded from the closed-door sessions where the plan was crafted. They have condemned the measure as a handout to the wealthy and corporations, and promised to use it as a cudgel against Republicans in the 2018 midterms.
Republicans have long pushed tax reform as a way to simplify the US tax code, but the proposal would keep all seven existing tax brackets for individuals. The bill has faced significant criticism because it would limit tax deductions for home mortgages and state and local taxes, as well as adding over a trillion dollars to the budget deficit.
The bill would not only reshape tax policy in the United States. It also contains provisions to allow oil drilling in Alaska’s Arctic national wildlife refuge, and would eliminate the Affordable Care Act’s individual mandate, which requires Americans to either buy health insurance or pay a penalty.
Despite being heralded by Republicans and the White House as a major accomplishment, the bill is deeply unpopular. A CNN poll released earlier on Tuesday found that 55% of voters had a unfavorable view of the plan and only 33% view it favorably.
Ryan dismissed criticism of the bill, saying “results are what’s going to make this popular”.
He said at the weekly Republican leadership press conference on Tuesday morning: “When we get this done, when people see their withholding [estimated tax] improving, when they see jobs occurring, when they see bigger paychecks, a fairer tax system, a simpler tax code, that’s what’s going to produce the results.”
Republicans, who control both chambers of Congress but have so far failed to achieve a major legislative victory, relished the moment hours before the vote was scheduled on Tuesday.
“Did you ever believe we would be here on this day?” the House majority leader, Kevin McCarthy, asked, grinning.
The vote was marred by repeated interruptions from protesters in the gallery. As protesters shouted slogans like “Kill the bill,” Democratic lawmakers cheered, and at least one Republican shouted back: “Throw her ass out.”
After final passage, Ryan loudly gaveled the vote to a close while receiving a standing ovation from House Republicans. Ryan has long pushed for cutting taxes and reforming the tax code and the vote on Tuesday was seen as a defining achievement for him.
Congress, meanwhile, is running up against a Friday deadline to fund the federal government. A sticking point over funding Obamacare payments – a promise made to secure Maine senator Susan Collins’ vote on tax reform – risks a potential revolt by House conservatives and a possible government shutdown.
The White House hailed the House passage of the tax bill and indicated Trump would sign it in the coming days.
“The president will have delivered the most significant tax cut in the history of the nation,” Sarah Sanders, the White House press secretary, said.
Sanders struggled, however, to defend Trump’s assertion in a speech last month that the tax bill would cost him “a fortune”.
“We expect that it likely will, certainly on the personal side, could cost the president a lot of money,” she said, while adding: “The president’s focus hasn’t necessarily been at all on himself.”
“This is a tax plan that we hope benefits all Americans primarily,” Sanders said.
Independent analyses have shown Trump and his cabinet stand to gain millions through a provision within the bill that doubles the exemption of the so-called estate tax. The president is also poised to save up to $30m from the repeal of what is known as the alternative minimum tax, a supplemental income tax intended to prevent wealthy Americans using loopholes to avoid paying taxes.
The nonpartisan Joint Committee on Taxation and the Congressional Budget Office, both independent research groups in Congress, have said the tax bill will disproportionately benefit the wealthy and corporations. As a result, Trump is likely to receive a larger average tax cut than the middle class.
When reporters pointed out the White House could directly address how the bill affects Trump by releasing his tax returns, Sanders insisted they are under audit and therefore cannot be disclosed. Trump used a similar line to justify his failure to release his tax returns as a candidate, breaking with a 40-year precedent for US presidential nominees.