The Tax Cuts and Jobs Act has passed the House. Here’s what comes next…
President Trump may have been concerned last night:
Why are Democrats fighting massive tax cuts for the middle class and business (jobs)? The reason: Obstruction and Delay!
— Donald J. Trump (@realDonaldTrump) November 16, 2017
However, he now has one less worry since the Tax Cuts and Jobs Act, his first major legislative achievement if it does become law, has passed the House:
The Tax Cuts and Jobs Act H.R. 1, passed the House in a 227-205 vote. Thirteen Republicans voted against it; all but one of them represent high-tax states that have the most to lose from provisions that would eliminate individual deductions for state and local income taxes.
“We are in a generation defining moment for our country,” House Speaker Paul Ryan said from the House floor before the vote. “What we’re doing here is not just determining the kind of tax code we’re going to have — what we are doing here is determining the kind of country we’re going to have.”
For a bill to be signed into law by the President, it must also pass the Senate. What comes next is the more high profile vote as it goes to the Senate, and that is where it could run into trouble.
Focus now turns to the Senate, where Republican leaders will face tougher hurdles — both political and fiscal.
Republicans control only 52 of the chamber’s 100 seats and must produce legislation that meets far stricter fiscal constraints. The Senate Finance Committee is already proposing measures that would make benefits for individuals — including the middle class — temporary as leaders try to avoid adding to deficits beyond a 10-year budget window.
Senate Majority Leader Mitch McConnell praised the House vote and said Senate tax writers “are also making real progress on a bill that’s been years in the making to fulfill our promise to the American people.”
The Senate plan departs from the House bill by delaying the corporate tax-rate cut by one year. It also includes a proposal to repeal a key provision of the Obamacare law — saving the government $318 billion over 10 years to help pay for the tax cuts, but leaving 13 million Americans uninsured by 2027, according to official estimates.
Many of the Senate provisions are designed to cut the bill’s cost and meet budget rules that will allow GOP leaders to pass a bill with only Republican votes. Differences between the House and Senate legislation will have to be worked out between the chambers — and then both the House and Senate will have to approve the final result.
For some interesting analysis on the direction the house is going, and where the Senate wants to go, here’s a must listen podcast from Peter Schiff: