Republicans scored a major victory late Friday, clearing the biggest hurdle on the road to sweeping tax reform as the US Senate approved their version of the legislation – similar though not identical to the House version – by a vote of 51-49. Sen. Bob Corker (R-TN) was the lone Republican voting against it, while no Democrats supported the bill.
The vote came following weeks of debate among a handful of Republicans concerned with several potential pitfalls in the bill, including how much it might increase federal deficits.
In the end, the concerns were apparently answered to the satisfaction of key Senators who had withheld support until the last couple of days, including Trump antagonists John McCain (R-AZ) and Jeff Flake (R-AZ), and moderates Lisa Murkowski (R-AK) and Susan Collins (R-ME).
With the two chambers of Congress having now passed separate tax legislation, the next step – scheduled to begin Monday – is a reconciliation process in which the Congressmen and Senators will negotiate on their differences and hammer out a final bill. The House and Senate must both then approve the reconciled bill before it can be sent to President Trump to sign into law.
Assuming these last steps in the legislative process are successful, this first tax reform legislation since the days of Ronald Reagan will represent a much-needed triumph for President Trump and the GOP. Following their repeated failures to deliver on their years-long promise to repeal and replace Obamacare, Republicans have been under intense pressure to deliver on their equally prominent promise to reform a tax system widely considered unfair and broken.
The Bill’s Future
Though public polls have signaled that a majority of Americans oppose the GOP bill to date, opinions will likely change if these reforms actually deliver what the GOP has promised – more jobs, rising wages and higher economic growth in an anemic economy. Already, growth has exceeded three percent in the last two quarters, largely on the expectation of tax reform legislation that is now approaching the finish line.
The Senate bill would slash tax rates for most Americans, double the standard deduction, increase the child tax credit and eliminate the controversial Obamacare individual mandate. But as in the House, the bill is especially targeted at businesses, with a dramatic reduction in the corporate tax rate from 35% to 20% and incentives to return to the US some of the trillions of dollars businesses have stashed overseas because of the current tax code.
While this should be a day for Republicans to savor, if not yet celebrate, the mood on Capitol Hill and in the White House Friday was one of distraction and concern with the announcement that Michael Flynn has entered a guilty plea to a single count of lying to the FBI. But while that matter will be adjudicated in the days and weeks ahead, this major tax reform will certainly affect the American economy for many years to come.
Stay with Liberty Nation as we report and analyze the final steps in this historic legislative effort.