Trump's tax bill balloons deficit, hurts poor: analysts
The latest U.S. Senate version of a Republican tax bill, strongly backed by President Donald Trump, would balloon the federal budget deficit and hurt poor Americans more than first estimated, congressional fiscal analysts said on Monday.
Congress` Joint Committee on Taxation (JCT) estimated the Republican bill would expand the $20 trillion national debt by $1.4 trillion in a decade, a potential worry for the dwindling number of Republican fiscal hawks in Congress.
The Congressional Budget Office (CBO), another nonpartisan research unit of Congress, said poor Americans would be hurt more than originally thought by the bill, largely because it would gut a key provision of the Obamacare healthcare law.
At a White House meeting, Trump urged lawmakers to pass the bill soon. He was scheduled to deliver the same message to Republicans on Capitol Hill on Tuesday, with the party entering a crucial phase of its push to overhaul the tax code.
Republicans were hurrying to bring their bill to a Senate vote, possibly as soon as Thursday. They see it as their last chance to score a significant legislative achievement in 2017.
This would save them from having to face voters next year with little to show for nearly a year in power in Washington.
Since Trump took office in January, he and his fellow Republicans have passed no major legislation, despite controlling both chambers of Congress and the White House. Trump has quarrelled publicly with several key Republican senators.
Financial markets have rallied since Trump`s stunning 2016 election victory, partly on hopes of tax cuts for businesses. The Senate bill would deliver these, although its impact on individual Americans and families would be more mixed.OBAMACARE EFFECT
Congressional analysts said the number of Americans with health insurance would fall by 13 million by 2027 under the Republican tax bill, which would repeal an Obamacare federal fine meant to encourage people to buy health insurance.
Such a change would shrink the supply of healthy, young people insured and drive up healthcare insurance premiums. The CBO said this would make people with incomes below $30,000 net losers under the bill.
Most of those earning more would be net winners, especially those with incomes between $100,000 and $500,000, it said.
Democrats, who call the bill a give-away to the rich and corporations, are expected to oppose it in the Senate. The House of Representatives approved a tax bill by a 227-205 vote on Nov. 16. No Democrats voted for it. Thirteen Republicans opposed it.
The Senate plans to vote on its tax overhaul package this week, Senate Majority Whip John Cornyn told reporters.POTENTIAL `NO` VOTES
But Senate Republican leaders did not appear on Monday to have enough votes to pass the legislation, with about a half-dozen Republicans viewed as potential "no" votes.
Republicans, with a 52-48 Senate majority, can lose no more than two of their own lawmakers to pass the bill.
Republican Senator Ron Johnson said he would vote against the bill at a Budget Committee hearing on Tuesday unless his concerns are resolved, according to his office.
"If we develop a fix prior to committee, I’ll probably support it, but if we don’t, I’ll vote against it,” Johnson told reporters in his home state of Wisconsin, according to his office.
Johnson has said the bill unfairly benefits corporations more than "pass-through" businesses, such as partnerships and sole proprietorships, which include both small, mom-and-pop companies and some large, non-corporate enterprises.
Republican Senator Bob Corker, a prominent fiscal hawk, has said he would support deficit-financed tax cuts only if they boost the economy enough to generate offsetting new revenues.
But because of the bill`s fast-track schedule, an official JCT estimate of that dynamic will not be promptly available.
Republican Senator James Lankford, who is concerned about the tax bill’s impact on the federal debt and deficit, said he is in discussions with tax writers on the Senate Finance Committee about possibly adding a measure that could raise tax rates if revenues fall short of expectations.
“We can’t afford to ignore the debt and deficit issues,” Lankford told reporters. “To me, the big issue is how are we dealing with debt and deficit, do we have realistic numbers and is there a backstop in the process just in case we don’t.”
The Senate bill would slash the corporate tax rate to 20 percent from 35 percent after a one-year delay. It would impose a one-time, cut-rate tax on corporations` foreign profits, while exempting future foreign profits from U.S. taxation.
The 100-seat Senate was a graveyard earlier this year for Republican efforts to dismantle Obamacare, former President Barack Obama`s signature health insurance law.
In a positive sign for Trump`s agenda, Republican Senator Rand Paul said on Monday he would support the bill. Republican Senator Lisa Murkowski has also signalled support.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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