Senate Republicans have passed the biggest overhaul of the US tax system in almost 30 years, sparking widespread condemnation from Democrats who say the new law will benefit the rich at the expense of the middle class.
After a year filled with Republican infighting and political turbulence, Congress is now on the cusp of handing President Donald Trump his first major legislative victory with its passage of the sweeping $1.5 trillion tax bill.
Nancy Pelosi, the Democrat House minority leader, called it “the worst bill in history” at a press conference on Tuesday night. “It’s a disgusting smash-and-grab. It’s an all-out looting of America, a wholesale robbery of the middle class,” she said.
Both the Senate – with a vote of 51-48 along party lines – and the House of Representatives approved the measure to enact large tax cuts in two separate votes.
But hours after the House had voted 227-203 to pass the final tax bill, Senate Democrats announced that the legislation contained multiple provisions that violate Senate rules. This means the House must pass the bill again on Wednesday with those measures withdrawn, before the final text can head to the President’s desk to be signed into law.
A visibly angry Chuck Schumer, the Senate minority leader, told Republicans they would “rue the day” they passed the bill during remarks on the Senate floor.
“This tax bill will be an anchor around the ankles of every Republican. If they haven’t learned it yet, they will learn it next November,” he said.
Mr Schumer also condemned Republicans for talking during his speech. “This is serious stuff. We believe you’re messing up America. You could pay attention for a couple of minutes,” he said.
Mr Trump took to Twitter to praise House Republicans for their initial vote in favour of the tax bill. “Congratulations to Paul Ryan, Kevin McCarthy, Kevin Brady, Steve Scalise, Cathy McMorris Rodgers and all great House Republicans who voted in favor of cutting your taxes!” he wrote.
The President also confirmed he would hold a press conference at 1pm in the White House after the final vote in the House has taken place.
Both chambers must pass identical bills before the President can sign the legislation into law. However, the second House vote will be seen as little more than a formality before Republicans – and Mr Trump – can celebrate their success.
Republicans and the administration have marketed the bill as a gift for the middle class and have asserted that the package of tax cuts for corporations, small businesses and individuals will boost economic and job growth.
In an interview with Fox News programme Fox & Friends, White House press secretary Sarah Sanders said middle-class Americans would “see the biggest benefit out of this tax package” – even though multiple analyses show the plan will disproportionately benefit the wealthiest Americans.
The plan is seemingly unpopular with the public – with one recent CNN poll suggesting 55 per cent of the public now oppose it – and Democrats have repeatedly called it a windfall for corporations and the wealthy.
Protesters chanting “Kill the bill, don’t kill us” interrupted the Senate vote on passage of the tax bill. Visitors in the Senate gallery stood up shortly after the vote began and started chanting. Vice President Mike Pence, who was presiding, stopped and repeatedly called on the Sergeant at Arms to restore order in the gallery.
The vote took place with a heavy US Capitol Police presence outside the chamber in expectation of the protests and demonstrators had interrupted the House debate on the bill earlier in the day.
About a quarter of the tax cuts for individuals included in the tax bill would go to middle-class Americans, according to an analysis by the Joint Committee on Taxation.
The committee found that middle-class taxpayers would get about $61bn in tax cuts in 2019 under the bill. However, those same individuals would see their taxes rise overall after a decade, according to the report.
Republicans have asserted that the legislation is needed to maintain their majorities in both the House and Senate during next year’s mid-term elections.
“When we get this done, when people see their withholding improving, when they see jobs occurring, when they see bigger paychecks, a fairer tax system, a simpler tax code, that’s what’s going to produce the results,” said House Speaker Paul Ryan, who has worked for years on a tax overhaul.
Democrat Senator Jeff Merkley slammed the Republican tax plan as a “bank heist”.
“This is the biggest bank heist, not just in American history, but in the history of the world happening here tonight brought to us by the powerful and the privilege and this is absolutely unacceptable,” the Oregon senator said on the Senate floor.
“This is a diabolic bill,” Mr Merkley said. “This is an abomination in a government of, by and for the American people.”
Ms Pelosi made clear that her party will have no issue in using the bill during campaigns next year. “This bill will come back to haunt them, as Frankenstein did,” she said.
Earlier in the day, Senate Republicans had criticised their Democratic colleagues for not participating in their tax rewrite efforts.
Republican House members roared and applauded as their chamber passed the package – before later finding out they will have to take another vote.
After the vote on Tuesday, Mr Ryan declared, “This was a promise made. This is a promise kept”, as he and other Republican leaders called a victory news conference moments later.
After the second vote in the House, Mr Trump will finally get to sign a major bill into law after nearly a year in office.
The president warmed up for what is likely to become a public victory lap by tweeting his congratulations after the first vote to Republican leaders and “all great House Republicans who voted in favour of cutting your taxes!”
Congressional Republicans, who faltered badly in trying to dismantle Barack Obama’s Affordable Care Act – or Obamacare – see passage of the tax bill as crucial to proving they can govern.
But it is clear the American public may take some convincing. Along with permanently lowering the corporate tax rate from 35 per cent to 21 per cent, the bill also repeals the Obamacare requirement that most individuals have health insurance – a provision that would lead to 13 million fewer people with health insurance over the next decade, according to nonpartisan Congressional Budget Office.
Tax cuts for corporations would be permanent while the cuts for individuals would expire in 2026 in order to comply with Senate budget rules. The tax cuts would take effect in January, and workers would start to see changes in the amount of taxes take out of their monthly salaries in February.
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