WASHINGTON — Republican House and Senate leaders muscled through a sweeping but deeply unpopular tax overhaul, securing a crucial legislative victory early Wednesday morning while setting up a difficult political challenge for the president’s party in the months and years ahead.
A procedural snafu was expected to require a second House vote Wednesday, which would finally clear the way for President Trump to sign the landmark bill before Christmas, a deadline he demanded after a year of legislative frustration.
The Senate voted 51-48 early Wednesday. Hours earlier, the House approved the bill, 227-203, with all Democrats and 12 Republicans voting no. Republicans cheered as House Speaker Paul Ryan announced the vote on the biggest federal tax overhaul in 31 years.
“Congress is standing at the doorstep of an historic opportunity,’’ Senate Majority Leader Mitch McConnell said before the Senate voted. “The result is a comprehensive tax reform bill that does what we set out to do: take money out of Washington’s pocket and put it back into the pockets of the middle-class Americans who earned it.’’
Republicans have deployed a fast-track strategy, pushing through complex legislation that heaps the majority of tax cuts on wealthy individuals and corporations. They took almost no public testimony and powered it past Democrats in a matter of weeks.
Moments before the House vote Tuesday, Ryan declared the bill would “help hard-working Americans who have been left behind for too long. Today we are giving the people of this country their money back,” he told his colleagues. “This is their money, after all!”
Then a protester in the gallery interrupted his speech, shouting, “You’re lying! You’re lying!”
With the 2018 congressional elections looming on the horizon, Republicans have just a short time to turn around public opinion of their legislation, which polls show is even less popular than the Affordable Care Act was in 2010, when Democrats lost control of Congress amid a backlash to the partisan passage of the health care law.
Democrats for weeks have been busy warming up their attack lines, accusing the GOP of showering the wealthy and corporations with goodies while leaving mere “crumbs” for average Americans. They also are warning of future cuts to Medicare and other popular programs to counter the deficits of at least $1.5 trillion that the bill will trigger.
The Democrats gained further ammunition in recent days when Republican negotiators added a provision that benefits real estate investment partnerships, which probably would give the billionaire president a big break on his own taxes — and do the same for a number of wealthy GOP lawmakers.
Trump and Republicans, meanwhile, crowed that their cuts will give most Americans an immediate tax cut next year, and that its steep cuts to corporate tax rates would create jobs, grow paychecks, and deliver a big boost to the economy. But the bill amounts to a risky experiment in what critics derisively call trickle-down economics that could backfire, especially in later years when the middle-class tax cuts dry up but the cuts for corporate interests and the wealthy stay in place.
“A mixture of theology and science fiction’’ is how Representative Richard Neal of Massachusetts, the ranking Democrat on the House Ways and Means Committee, described the Republicans’ bill.
“The bill provides crumbs and tax hikes for middle-class families in this country and a Christmas gift to major corporations and billionaire investors,” Senate minority leader Chuck Schumer of New York said.
The GOP bill would permanently cut the corporate tax rate to 21 percent, from 35 percent. It also would cut the top rate for the richest taxpayers from 39.6 percent to 37 percent, while middle- and lower-income taxpayers would see more modest cuts.
It would nearly double the standard deduction to $24,000 for a married couple, and double the child tax credit to $2,000. At the same time, the bill would eliminate or scale back some popular individual deductions — for instance, capping at $10,000 the amount a person can deduct in state and local taxes. The individual tax cuts expire in 2026, while the corporate cuts are permanent.
The complex measure takes money away from millions of families even as it provides benefits, which has made it difficult for most people to understand how it will affect them. That has helped fuel its deep unpopularity, according to polls that show only a small minority of Americans support it — just 33 percent, according to a CNN poll released Tuesday. Two-thirds of those surveyed said the bill would help the rich more than the middle class.
“The one piece of legislation that the Republicans decided to pass is the one piece of legislation that will characterize them in the most negative light for 2018,” said Democratic pollster Peter Hart, who helps conduct the Wall Street Journal/NBC poll, which, like other polls, has consistently found Americans oppose the tax bill.
The changes take effect Jan. 1. Benefits will soon begin to appear for many Americans in their paychecks, as employers adjust tax withholdings early in 2018. But the full result of the bill will be difficult to discern for many until April 2019, when the 2018 tax filings are due.
“No one is ever upset when you cut their taxes. So to the extent that this really is a tax cut and that people will start to feel those tax cuts and therefore more take-home pay next year, it’s really good for Republicans,” said Jon McHenry, a Republican pollster and strategist.
On the eve of passage of Barack Obama’s signature health care law, Gallup found that 46 percent of Americans supported its passage, while 48 percent opposed it — and the law proved to be a political albatross around Democrats’ necks for the next seven years.
The GOP tax bill already polls far worse. A recent Gallup survey found just 29 percent of Americans supported the bill, versus 56 percent disapproving.
It’s also unclear just how quickly the tax bill’s promised economic benefits will materialize — and how big they will be. The White House has predicted the tax bill could deliver a full percentage point or more of additional economic growth, but many economists are skeptical of those rosy figures.
Many economists see the package delivering a more modest, short-term growth boost.
“No bill’s perfect, but this is certainly an improvement from the status quo, and I expect to see some impacts from it,” conservative economist Douglas Holtz-Eakin said.
Despite his protest to the contrary, Trump would almost certainly benefit from this bill, in part because of the generous tax break it bestows on real estate partnerships, although no one knows precisely how much he would benefit because he has defied presidential precedent and never released his tax returns.
“On the personal side, it could cost the president a lot of money,” White House press secretary Sarah Huckabee Sanders contended Tuesday.
But the details suggest the opposite.
“Millionaires are doing very, very well under this bill,” said Lily Batchelder, a tax expert at New York University and former Obama White House adviser, citing analysis by the nonpartisan congressional Joint Committee on Taxation.
The joint committee analysis shows people making more than $1 million a year will see a 3.4 percent boost to their after-tax income in 2019 — three times as big as a family earning $40,000 to $50,000.
Trump will probably do a lot better than the typical millionaire, too, because he reportedly owns around 500 “pass-through” partnership companies, which get favorable treatment under the bill, Batchelder said.
“It turns the Trump frame on its head. Make America Great Again. Yeah, for whom?” said Democratic pollster Celinda Lake, who sees the tax bill as a boost for Democrats’ political fortunes. “Who’s going go to be great again here? Who’s he really fighting for?”Victoria McGrane can be reached at email@example.com. Follow her on Twitter @vgmac.