DACA promise secures key vote for GOP’s Senate tax bill


Sen. Jeff Flake talks to reporters in between votes at the U.S. Capitol on November 30, 2017 in Washington, DC.
Updated 11:59 am, Friday, December 1, 2017

WASHINGTON — After a night spent tweaking a $1.5 trillion tax bill that promises wide economic repercussions, Senate Republicans declared Friday that they had secured the votes needed for passage, putting them on a path to deliver their first major victory of the Trump presidency.

Former holdouts such as Sen. Jeff Flake, the Arizona Republican who is retiring next year, dismissed concerns that the bill will add as much as $1 trillion to the deficit. Flake said Friday that he would back the bill after securing promises from Republican leaders that they would work toward a deal extending protections for undocumented immigrants who were brought to the U.S. as children.

The House passed its own version earlier this month, and GOP leaders there prepared to begin negotiations with their Senate counterparts to produce a final bill that will have to be voted on again in both chambers before going to President Trump for his signature. Republicans are racing to enact the bill into law before Christmas.

Sen. John Thune, R-S.D., said the bill was the product of “years” of GOP deliberations over tax policy and that its central feature — a cut in the top corporate tax rate to 20 percent from the current 35 percent — was desperately needed to keep U.S. companies competitive around the world. Thune promised that the bill would lift wages and provide more “good-paying jobs.”

Republicans widely dismissed the deficit projections by the Joint Committee on Taxation, the official body of Congress that assesses tax bills, as overblown. The analysis found that growth fueled by the tax cuts would be minimal, and that the bill would add $1 trillion to the federal deficit over the next decade. Republicans said the growth estimates were grossly understated.

The tax legislation is a boon to large corporations and multinationals, particularly Silicon Valley technology companies whose overseas profits would face little or no tax under the new bill.

Many California households, however, could face higher tax bills because the legislation would repeal the deduction for state and local taxes. California has the nation’s highest state income tax.

The Congressional Budget Office, a nonpartisan arm of Congress that assesses the effect of major legislation on the public, found that the bill’s benefits are sharply tilted toward high- income earners.

Although some middle-class and lower-income households could see modest tax cuts in the bill’s initial years, these expire by 2025, while the corporate tax cuts are permanent.

The bill also repeals the mandate that people buy health insurance or face a tax penalty. That is expected to raise premiums and drop 13 million people the ranks of people with health coverage.

Combined, these provisions will raise taxes or reduce benefits for people earning less than $75,000, according to the budget office, while those earning more will see higher benefits. Most of the benefits would go to people who earn more than $1 million a year.

In announcing his support for the bill, Flake said he had secured a promise from GOP leaders that they would cooperate on finding “fair and permanent protections” for roughly 800,000 young immigrants who were brought to the country without legal documentation as children.

They are temporarily protected from deportation under the Deferred Action for Childhood Arrivals program instituted by former President Barack Obama, which Trump has said he will allow to expire in March. Roughly a third of DACA recipients live in California.

Sen. John Cornyn, R-Texas, and second-ranking GOP leader, said the leadership had not promised Flake any specifics on the so-called Dreamers.

Democrats waged a last-ditch amendment fight on the Senate floor to block the tax plan, but were easily rebuffed by newly unified Republicans.

Republicans need at least 50 votes to pass the legislation under special rules that prevent a Democratic filibuster. They hold 52 seats, and with zero Democratic backing, they can afford to lose only two GOP votes. Vice President Mike Pence would break a 50-50 tie.

One of the holdouts, Sen. Bob Corker, a Tennessee Republican who is also retiring at the end of his term, failed to secure his goal of including a deficit “trigger” that would scale back the tax cuts if the GOP’s rosy growth predictions do not pan out. Conservative Republicans, urged by outside interest groups such as Americans for Prosperity, rebelled at the idea of scaling back tax cuts for businesses to reduce the deficit numbers and satisfy Corker.

Rep. Mark DeSaulnier of Concord, a Democrat who started his political career as a Republican, called the bill the “Koch brothers’ ultimate fantasy,” referring to the coal barons Charles and David Koch, who provide millions of dollars to GOP campaign coffers and fund Americans for Prosperity.

DeSaulnier said even the most conservative Republicans have become terrified of political challenges from the right funded by the Kochs and other billionaire donors.

“It’s nothing for them to write $5 million or $10 million checks,” DeSaulnier said. “That’s a lot of money in a closed primary in a conservative district.”

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