WASHINGTON (AP) — After weeks of quarrels, qualms and then eleventh-hour horse-trading, Republicans revealed the details of their huge national tax rewrite late Friday — along with announcements of support that all but guarantee approval to give President Donald Trump the Christmas legislative triumph he's been aching for.
The legislation would slash tax rates for big business and lower levies on the richest Americans in a massive $1.5 trillion bill that the GOP plans to muscle through Congress next week before its year-end break. Benefits for most other taxpayers would be smaller.
"This is happening. Tax reform under Republican control of Washington is happening," House Speaker Paul Ryan of Wisconsin told rank-and-file members in a conference call. "Most critics out there didn't think it could happen. ... And now we're on the doorstep of something truly historic."
According to the 1,097-page bill released late Friday, today's 35 percent rate on corporations would fall to 21 percent, the crown jewel of the measure for many Republicans. Trump and GOP leaders had set 20 percent as their goal, but added a point to free money for other tax cuts that won over wavering lawmakers in final talks.
The legislation represents the first major legislative achievement for the GOP after nearly a full year in control of Congress and the White House. It's the widest-ranging reshaping of the tax code in three decades and is expected to add to the nation's $20 trillion debt. The tax cuts are projected to add $1.46 trillion over a decade.
The bill would repeal an important part of President Barack Obama's Affordable Care Act — the requirement that all Americans have health insurance or face a penalty — as the GOP looks to unravel a law it failed to repeal and replace this past summer.
Only on Friday did Republicans cement the needed support for the overhaul, securing endorsements from wavering senators.
Marco Rubio of Florida relented in his high-profile opposition after negotiators expanded the tax credit that parents can claim for their children. He said he would vote for the measure next week.
Rubio had been holding out for a bigger child credit for low-income families. After he got it, he tweeted that the change was "a solid step toward broader reforms which are both Pro-Growth and Pro-Worker."
Sen. Bob Corker of Tennessee, the only Republican to vote against the Senate version earlier this month, made the surprise announcement that he would back the legislation. Corker, the chairman of the Senate Foreign Relations Committee, has repeatedly warned that the nation's growing debt is the most serious threat to national security.
"I realize this is a bet on our country's enterprising spirit, and that is a bet I am willing to make," Corker said.
The White House said Trump "looks forward to fulfilling the promise he made to the American people to give them a tax cut by the end of the year."
The bill embodies a longstanding Republican philosophy that a substantial tax break for businesses will trigger economic growth and job creation for Americans in a trickle-down economy.
Skeptical Democrats are likely to oppose the legislation unanimously.
"Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits," said Senate Minority Leader Chuck Schumer of New York. "It is just the opposite of what America needs, and Republicans will rue the day they pass this."
The bill would drop today's 39.6 percent top rate on individuals to 37 percent. The standard deduction — used by around two-thirds of households — would be nearly doubled, to $24,000 for married couples.
The $1,000-per-child tax deduction would grow to $2,000, with up to $1,400 available in IRS refunds for families who owe little or no taxes. Parents would have to provide children's Social Security numbers to receive the child tax credit, a measure intended to deny the credit to people who are in the U.S. illegally.
Those who itemize would lose some deductions. The deduction that millions use in connection with state and local income, property and sales taxes would be capped at $10,000. That's especially important to residents of high-tax states such as New York, New Jersey and California. Deductions for medical expenses that lawmakers once considered eliminating would be retained.
The bill would allow homeowners to deduct interest only on the first $750,000 of a new mortgage, down from the current limit of $1 million.
People who inherit fortunes would get a big break. The bill would double the exemption, meaning the estate tax would apply only to the portion of an estate over $22 million for married couples.
Members of a House-Senate conference committee signed the final version of the legislation Friday, sending it to the two chambers for final passage next week. They have been working to blend the different versions passed by the two houses.
Republicans hold a slim 52-48 majority in the Senate, including two ailing senators who have missed votes this past week.
John McCain of Arizona, who is 81, is at a Washington-area military hospital being treated for the side effects of brain cancer treatment, and 80-year-old Thad Cochran of Mississippi had a non-melanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available next week.
Tax bill boosts oil, gas drilling _ and renewable energy
By MATTHEW DALY , Associated Press
WASHINGTON (AP) — The Republicans' tax package would boost traditional forms of energy such as oil and gas while also supporting renewable energy such as wind and solar power — and even extend a hand to buyers of electric cars.
An agreement by House and Senate negotiators would open Alaska's Arctic National Wildlife Refuge to drilling, while preserving tax credits for wind power and other clean energy. The bill also would extend a tax credit of up to $7,500 for purchases of plug-in electric vehicles such as the Tesla Model 3 and Chevrolet Bolt.
Republicans rolled out the bill late Friday.
Opening the remote Arctic refuge to oil and gas drilling is a longtime Republican priority that most Democrats fiercely oppose. The 19.6-million-acre refuge in northeastern Alaska is one of the most pristine areas in the United States and is home to polar bears, caribou, migratory birds and other wildlife.
Alaska Sen. Lisa Murkowski and other Republicans say drilling can be done safely with new technology, while ensuring a steady energy supply for West Coast refineries.
Murkowski, who chairs the Senate Energy and Natural Resources Committee, said opening the refuge to drilling is "the single-most important step we can take to strengthen our long-term energy security and create new wealth."
The House and Senate are expected to vote on the $1.5 trillion tax legislation next week as GOP leaders push the most sweeping rewrite of the tax code in more than three decades.
The bill preserves a phase-out of tax incentives for both the solar and wind industries passed in 2015. Tax credits for wind are set to expire in 2020, and solar credits in 2022.
The wind-energy credits are popular with some Republicans, including Iowa Sen. Chuck Grassley and South Dakota Sen. John Thune, who worked to defend them after they were curtailed in a version passed by the House.
Electric cars comprise just about 1 percent of sales nationwide, but several states have mandates that such "zero emission vehicles" make up a much larger portion of vehicle sales. Manufacturers worry that eliminating the tax credit would have made those targets virtually impossible to meet.
The Arctic refuge has been the focus of a political fight for nearly four decades. Former President Bill Clinton vetoed a GOP plan to allow drilling in the refuge in 1995, and Democrats led by Washington Sen. Maria Cantwell defeated a similar plan in 2005.
Most congressional Republicans support the drilling plan, including veteran Alaska Rep. Don Young, one of the plan's negotiators. Young called drilling "crucially important to the nation" and said it would decrease U.S. dependence on foreign oil and create jobs for Alaskans.
Democrats and environmental groups say the GOP plan risks spoiling one of the nation's most pristine areas and is especially unwise at a time when U.S. oil production is booming, with imports declining and exports reaching record levels.
Lawmakers "do not need to ruin a wildlife refuge and an ecosystem that is intact just to give tax breaks to big corporations," Cantwell said. "We can do better than this."
Commuters lose transit, parking, biking benefits in tax bill
By JOAN LOWY , Associated Press
WASHINGTON (AP) — Count commuters among the losers in the Republican tax bill that the House and Senate are expected to vote on next week.
The final bill agreed to by Republican negotiators and released late Friday eliminates the tax incentive for private employers that subsidize their employees' transit, parking and bicycle commuting expenses.
Currently, companies can provide parking or transit passes worth up to $255 a month to employees as a benefit to help pay for their commuting expenses, and then deduct the costs from their corporate taxes. That amount was set to increase to $260 a month on Jan. 1.
The reasoning behind the elimination of the deduction is that since the tax bill substantially lowers the corporate tax rate, smaller tax breaks that complicate the tax code are no longer necessary. Companies could still provide the parking and transit passes to employees, but they would no longer get the tax deduction. And employees who pay for their own transportation costs can still use pre-tax income.
The elimination of the subsidy has transit agencies worried that fewer commuters will opt for transit.
"It's clearly a negative for commuters who are spending a lot of money on public transportation," said Rob Healy, vice president for governmental affairs at the American Public Transportation Association. The employer subsidies are generally more lucrative for commuters than the ability to use pre-tax income for transportation costs, he said.
"The concern is that if employers can't write it off, they won't offer it. And if they don't offer it, it's a loss to the employees," Healy said. "It could ultimately hurt the ridership."
Businesses that provide their employees with $20 per month to cover the expense of commuting by bicycle would also no longer be able to write off the benefit under the tax bill. Without that incentive, the relatively few employers offering the benefit may discontinue it, said Ken McLeod, policy director for the League of American Bicyclists.
Bicyclists can use the benefit to offset the cost of a new bicycle or pay for helmets, locks, lights or maintenance like new tires, McLeod said. The money doesn't count toward employee earnings, he said.
Getting rid of the bicycle benefit, which was adopted in 2009, would save the government a relatively low $5 million a year, McLeod said. By comparison, the parking benefit costs the government about $7.3 billion a year in foregone taxes, according to a report by TransitCenter, a transit advocacy group.
The House version of the tax bill retained the benefit, but the Senate version eliminated it even though more than 1,500 bicyclists contacted members of the Senate Finance Committee to try to persuade them to keep the write-off, he said.
"Growth in commuting by bicycle contributes to reducing congestion, promoting good health and supporting a low-cost mode of transportation for all Americans," 20 bicycle, community, and sports and outdoor industry groups said in a letter to the committee's chairman, Sen. Orrin Hatch, R-Utah, and senior Democrat, Sen. Ron Wyden, D-Oregon.
What bothers bicyclists the most, McLeod said, isn't so much the money, but "just that it feels like the federal government doesn't support biking.
"I don't know if that is something the legislators meant to express," he said, "but that's something we're definitely hearing."
Tax bill guts unpopular 'Obamacare' insurance mandate
By RICARDO ALONSO-ZALDIVAR , Associated Press
WASHINGTON (AP) — Republicans didn't get their wish to repeal former President Barack Obama's health care law, but the tax bill barreling toward a final vote in Congress guts its most unpopular provision, the requirement that virtually all Americans carry health insurance.
Politically, the move is a winner for Republicans, who otherwise would have little to show for all their rhetoric about "Obamacare."
But if estimates by the nonpartisan Congressional Budget Office are right, it will lead to more people being uninsured and higher premiums for those buying individual health insurance policies.
And Congress may then find itself considering other ways to nudge people to get health insurance.
The CBO estimates that repealing the requirement would lead to more people taking a gamble on going without coverage, raising the number of uninsured Americans by 4 million in 2019 and by 13 million a decade from now. The federal government would save about $338 billion over a decade because fewer people would seek subsidized coverage under the Affordable Care Act. But premiums for individual plans would go up about 10 percent because the people left behind would tend to be sicker.
Independent experts debate the precise impact, noting that with about 28 million people still uninsured, the so-called individual mandate doesn't seem to have worked very well in the first place.
"The data is very murky on how much of an effect the individual mandate has had," said Larry Levitt of the nonpartisan Kaiser Family Foundation. "I think it's likely that millions more people will be uninsured with the individual mandate repealed but not to the extent that CBO projected. Insurance premiums will certainly go up."
Other major elements of "Obamacare" would remain in place, including its subsidies for premiums, protections for people with pre-existing medical conditions and its requirement that insurers cover a broad range of "essential" benefits. Little impact is seen on employer plans, the mainstay for workers and their families.
The insurance requirement is enforced through fines collected by the IRS. Anecdotal evidence suggests that many of the people who have been paying the fines are workers with modest incomes — the group that the health law was supposed to help in the first place.
Health economist Gail Wilensky said repealing the mandate might take some of the political steam out of the health care debate. It may even point to a path for lawmakers of both major parties to consider measures that would help stabilize insurance markets for people who don't get coverage on the job.
It "may be enough to take away what has been the single most hated part of the ACA for both Republicans and Democrats," said Wilensky, who served in a previous Republican administration.
But that won't solve the problem of providing affordable coverage for people who don't qualify for subsidies through "Obamacare."
President Donald Trump's administration is working on another track: regulations that would allow broader sale of lower-cost plans with limited benefits.
How much consumer appeal that alternative will have remains to be seen.