WASHINGTON (Reuters) - U.S. Senate Republicans will grapple
on Friday with the possibility of adding a tax increase to sweeping legislation
meant to cut taxes on
businesses and individuals, aiming to win support from
fiscal conservatives worried about the bill’s impact on the federal deficit.
With a mandatory 20 hours of Senate debate nearing
expiration, the Republican lawmakers, who control the chamber, could move to a
final vote late in the day after a procedural vote starting at 11 a.m. EST
(1600 GMT) and a potentially chaotic “vote-a-rama” on amendments offered by
both Republicans and Democrats.
Republicans were still wrangling behind the scenes over how
to raise $350 billion or more in taxes over 10 years to prevent their
legislation from ballooning the federal deficit if the proposed cuts fail to
generate the expected economic growth.
Senate Republican leader Mitch McConnell and others were also
working on deals to win support from party members who want larger tax breaks
for non-corporate pass-through businesses, a bigger child tax credit for
families, and a $10,000 deduction for state and local property taxes.
Despite the hurdles, rank-and-file Republicans were still
optimistic that they could approve the bill this week and agree this month to
final legislation with the House of Representatives, which their party also
controls.
“This is the big enchilada,” said Senator Johnny Isakson of
Georgia. “We’ve still got a chance to do something good, and I‘m going to try
and do it.”
Since taking office in January, President Donald Trump and
his fellow Republicans in Congress have passed no major legislation. Their bill
would be the biggest overhaul of the U.S. tax system since the 1980s.
Success is crucial to Republican political prospects in the
November 2018 elections, when the party will fight to keep control of the
Senate and the House of Representatives.
But the effort stumbled on Thursday when Republicans
acknowledged that Senate rules would not permit them to add a mechanism to
trigger tax increases in coming years if the bill fails to boost the economy
enough to generate sufficient revenues to pay for tax cuts.
Senator Bob Corker and other Republicans concerned about the
deficit impact had demanded the trigger in exchange for their support. On
Thursday, the nonpartisan Joint Committee on Taxation released a report saying
the legislation would add $1 trillion to the deficit over the next 10 years,
even with tax-driven economic growth projections factored in.
Another Republican senator, Ted Cruz, told Bloomberg News he
opposed raising taxes in the bill and would fight Corker’s efforts.
Republicans are now examining options that could raise taxes
at a particular point over the next decade.
“We have an alternative, frankly a tax increase we don’t want
to do, to try and address Senator Corker’s concerns,” said Senate Majority Whip
John Cornyn, the chamber’s No. 2 Republican.
Republican Senator Steve Daines said in a statement on Friday
that he would support the bill.
Daines, like his fellow Republican Ron Johnson, was a holdout
on non-corporate pass-through businesses. He decided to back the bill after
winning an agreement for a 23 percent tax deduction for such business owners,
up from the original 17.4 percent, according to an aide for Daines. Earlier
this week, Daines said he had a deal for a 20 percent deduction.
A representative for Johnson could not immediately be reached
for comment.
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 taxes for
some businesses and individuals, while ending many tax breaks.
Analysts said lawmakers could scale back tax cuts for
corporations and top individual earners.
Asked if lawmakers would have to accept smaller tax cuts,
Senate Finance Committee Chairman Orrin Hatch said: “We’ll have to see.”
Early on Friday morning, Trump praised congressional Republicans’
work and blamed Democrats for trying to derail the bill, tweeting: “The Bill is
getting better and better.”
Democrats have been united in their opposition to the bill,
calling it a giveaway to the wealthy and corporations.
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