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GOP tax plan clears Senate in narrow, early morning vote

Senate Majority Leader Mitch McConnell of Ky., left, and Sen. John Thune, R-S.D., right, wait for Republican senators to gather to meet on the GOP effort to overhaul the tax code, on Capitol Hill, on Friday.
Associated Press/Andrew Harnik
Senate Majority Leader Mitch McConnell of Ky., left, and Sen. John Thune, R-S.D., right, wait for Republican senators to gather to meet on the GOP effort to overhaul the tax code, on Capitol Hill, on Friday.

WASHINGTON — The Senate passed its version of a historic tax overhaul on a largely party line vote Saturday morning, as Republicans cleared a crucial hurdle in their quest to deliver President Trump a signature political accomplishment.

After weeks of back-room negotiations, 51 of 52 Republican senators coalesced around a package that would dramatically lower taxes, particularly for corporations and wealthy individuals, in hopes that the money would be later invested and stimulate the economy.

“Well, this is a great day for the country;” Majority Leader Mitch McConnell said at almost 2 a.m. Saturday, when the bill finally passed. “I’m totally confident this is a revenue-neutral bill. It’s going to be a revenue producer.”

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The 51-49 vote came after a frenzy of a Friday in which several last-minute deals forced Senate staffers to continually rewrite the legislative text — with some markups even occurring by handwritten notes mere hours before a final vote was scheduled.

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Black SUVs were waiting outside the Capitol throughout the evening to whisk lawmakers immediately to the airport after the vote, even as votes continued past midnight.

At around 9 p.m., senators began what’s often called a “vote-a-rama,” an hours-long process that allows individual lawmakers to bring up nearly any amendment for a short debate and vote. While Republicans were eager to move past this process and vote on their agreed-upon bill, Democrats used the time to embarrass their colleagues into politically toxic votes.

One Democratic senator filed a motion to raise the corporate tax rate and use the revenue for a permanent child tax credit — but the effort was defeated by Republicans, as were others.

Polls show the tax bill is already overwhelmingly unpopular, and public scrutiny is likely to intensify as the bill inches closer to Trump’s desk. The House and Senate proposals will add hundreds of billions of dollars to the federal deficit and produce only nominal economic growth, according to nonpartisan analysis from the Congressional Budget Office and the Joint Committee on Taxation, a congressional numbers-crunching arm.

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Deficit concerns are what caused Tennessee Senator Bob Corker to spurn his Republican colleagues and announce his intention to vote “no” on the bill. In a statement, the retiring lawmaker said he was “disappointed” in the legislation.

“I wanted to get to yes. But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” Corker said.

Yet even as the bill creeps forward, a tough road remains. Senators will use a conference to reconcile their version of the tax legislation with the bill the House of Representatives passed weeks ago. Major differences must be ironed out before both chambers vote again, most notably the provision in the Senate bill that repeals key provisions of the Affordable Care Act.

Members of the ultra-conservative House Freedom Caucus have signaled little willingness to compromise on certain ACA repeal provisions, which may rile moderate conservative senators. Republican leaders sought to downplay the differences, however, and assert that a conference will go smoothly.

House Ways and Means Chairman Kevin Brady, who will be a key part of the negotiations, said the conference won’t be a case of the House and Senate “battling it out.”

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“It will be picking the best of both approaches,” Brady said on Fox News.

Democrats don’t have the clout to stop such legislation, but liberal lawmakers are attempting to turn public opinion against the bill and make it politically toxic.

The Senate plan is likely to cause tax increases to the middle and working class come 2027, the joint committee study found, a fact several Democrats have seized upon.

“The #GOPTaxScam is a smash-and-grab job,” tweeted Massachusetts Senator Elizabeth Warren Friday. “The GOP don’t even try to hide the corruption. And they don’t worry about how many middle class families are hurt in the caper.”

Throughout Friday morning, Democrats also keyed in on the closed-door deal-making Republicans employed to pass the bill. Last-minute sweeteners for senators who were on the fence were added by party leaders — but never afforded a public debate.

At about 7 p.m. Friday, copies of the nearly 500-page bill were distributed to senators, but the bill still had not been made available to the public.

Senator Claire McCaskill of Missouri tweeted that it was lobbyists who provided Democratic senators a list of eventual amendments to the bill — not Republican lawmakers.

“None of us have seen this list, but lobbyists have it,” McCaskill said. “Need I say more? Disgusting.”

Maine Senator Susan Collins negotiated a deal for two provisions. One would reduce the threshold for deducting taxes for medical expenses. Another would allow taxpayers to deduct up to $10,000 for state and local property taxes, which matches the House provision.

She announced she would support the bill Friday.

Wisconsin Senator Ron Johnson secured tax benefits for so-called pass-through businesses, which pay individual rather than corporate tax rates. Arizona Senator Jeff Flake said he secured language eliminating billions of dollars in write-offs for business investments that were set originally set to expire after 2022. He was also promised a seat at the table in the upcoming negotiations regarding immigration reform.

Minority leader Chuck Schumer said the amount of last-minute policy sweeteners in the bill was proof the public needed more time to vet the legislation.

“Why on earth wouldn’t you want to spend more than a few hours looking at a bill of this magnitude?” the Democrat said on the Senate floor Friday. “What might have been snuck in? What might have been changed by mistake?”

What’s left is an extraordinary political gamble by Republicans. After a year in which candidate Trump wooed supporters with promises of an “economic nationalism” in which the rich were held accountable, the party is backing a plan that would allow the wealthiest 0.1 percent of Americans to save an average of $320,000 a year, according to a report by the nonpartisan Tax Policy Center.

The Senate legislation would also cut other state and local tax deductions used by high-tax, blue states in particular. It repeals the estate tax on the super-wealthy, keeps the alternative minimum tax despite an earlier call to eliminate it, doubles the per-child tax credit, and shifts the United States to a “territorial” system in which offshore corporate earnings are exempt from domestic taxation.

For eight years under former president Barack Obama, Republicans railed against any measure that would increase national deficits and debt. Now, they are dismissing academic analysis that their plan would do exactly that.

“We’re going to pay for them through the economic activity that will absolutely occur if we have the courage to fulfill the promise we made last year to the American people,” said Republican Senator Thom Tillis of North Carolina.

Senator Lindsey Graham of South Carolina said he’s confident that the economic growth created by tax cuts would increase government revenue to a point that limits growth of the deficit. But there was no Plan B, he added.

“If I’m wrong, we’ll pay a price. If I’m right, it will make sense,” Graham said.

Still, the likely passage of the Senate tax bill is a boon for a White House in desperate need of a political distraction. On Friday, the investigation into criminal wrongdoing among the Trump campaign took another step toward the president, as his former top aide and former White House national security adviser Michael Flynn pleaded guilty to lying to the FBI.

The president himself stands to greatly benefit from the Senate GOP’s plan, estimates suggest. A recently released analysis from NBC News said Trump and his family would probably save more than $1 billion in taxes by 2024 through the repeal of the federal estate tax and other deductions.

The numbers used in the analysis are rough estimates, however, because Trump has yet to release his tax returns — unlike every other president in modern history.

Astead W. Herndon can be reached at astead.herndon@
globe.com
. Follow him on Twitter @AsteadWesley