U.S. Senate tax bill stumbles on deficit-focused 'trigger'
A Republican tax overhaul stalled on a procedural issue in the U.S. Senate on Thursday, forcing lawmakers to weigh new options to an amendment sought by a leading fiscal hawk to address the bill`s projected large expansion of the federal deficit.
Senator Bob Corker wanted to add a provision that would trigger automatic tax increases in years ahead if tax cuts in the bill failed to boost the economy and generate revenues sufficient to offset the estimated deficit expansion.
But the Senate parliamentarian barred Corker`s "trigger" proposal on procedural grounds. "We just got the realization from the parliamentarian that that`s probably not going to work," said Republican Senator David Perdue.
The setback underscored nagging concerns among fiscal conservatives in the party about the deficit impact of the tax bill, seen by Republicans as crucial to their political prospects in the November 2018 U.S. elections, when they will seek to keep control of the Senate and House of Representatives.
Since taking office in January, President Donald Trump and fellow Republicans in control of Congress have yet to pass major legislation, a fact they hope to change with their proposed tax code overhaul, which would be the biggest since the 1980s.
A decisive Senate vote on the tax bill had been seen as possible on Thursday. It was not immediately clear when a vote would occur as Republicans wrestled with the obstacle thrown in their path by the parliamentarian.
Corker`s "trigger" amendment was needed to win his vote for the bill, as well as the votes of other Republican senators worried about the deficit. Those worries were raised after congressional analysts said the bill would not boost the economy enough to offset the estimated deficit expansion, as the Trump administration had said it would.
Republicans were now considering building future tax increases into their bill as they sought to lock in votes needed for approval.
"It’s not a threshold anymore. It`s just a tax increase," Perdue said. "The only thing that’s come off the table is the trigger concept."
Senate Republicans were considering making their proposed corporate income tax rate cut temporary, instead of permanent, so that the rate would rise back to an unknown level after six or seven years, said a Republican senator and an aide. By that time, Trump might no longer be in office and a future Congress might change the law.
Optimism had reigned earlier in the day, when the bill won the backing of influential Republican Senator John McCain. Stocks surged on hopes that Republicans were on the brink of the tax overhaul.
The S&P 500 hit a record closing high and the Dow Jones industrial average topped the 24,000 mark for the first time.
But the Joint Committee on Taxation, or JCT, a nonpartisan fiscal analysis unit of Congress, said the bill as passed earlier by the Senate Finance Committee, would generate only $407 billion in new tax revenue from increased economic growth.
JCT had earlier estimated the tax bill would balloon the $20 trillion national debt by $1.4 trillion over 10 years. The new estimate, counting "dynamic" economic effects, put the deficit expansion at $1 trillion, far short of assertions by some Republicans that the tax cuts would pay for themselves.`FAIRY DUST`
House of Representatives Democratic leader Nancy Pelosi said the new JCT estimate showed "no amount of dynamic scoring fairy dust will fix the catastrophic deficits of the GOP tax scam."
Democrats, expected to unanimously oppose the tax bill, have dismissed it as a giveaway to the wealthy and corporations.
McCain, a key player in July`s collapse of a Republican effort to gut Obamacare, backed the tax bill. While "far from perfect," the former presidential candidate said it would boost the economy and give tax relief to all Americans.
Republican Senator Susan Collins, who also played a role in the failure of the Obamacare rollback, told reporters she was still not committed to the bill.
Senator Jeff Flake, another Republican holdout, said: "We`re still working on a few things."
Several Republicans were withholding support while pushing for other changes, including a federal deduction for up to $10,000 in state and local property taxes and bigger tax breaks for "pass-through" companies, including small businesses.
As drafted, the Senate bill would cut the U.S. corporate tax rate to 20 percent from 35 percent after a one-year delay and reduce the tax burden on businesses and individuals, while ending many tax breaks, but would still expand the deficit,POLITICAL PRESSURE
President Donald Trump and his Republican allies want to enact tax cuts before January. If the Senate and House can craft a compromise bill that Trump will sign, it would give Republicans their first major legislative victory of 2017.
The House approved its own tax bill on Nov. 16.
Among Americans aware of the Republican tax plan, 49 percent said they were opposed, up from 41 percent in October, according to a Nov. 23-27 Reuters/Ipsos poll released on Wednesday. The latest online poll of 1,257 adults found 29 percent supporting the plan and 22 percent saying they "don`t know."
Republicans have a 52-48 majority in the 100-member Senate, giving them enough votes to win if they hold together. With Democrats opposed, Republicans can afford to lose no more than two of their own, with Vice President Mike Pence able to break a 50-50 tie.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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