WASHINGTON — The Republican-controlled Congress on Wednesday finally enacted its sweeping $1.5 trillion tax package, which will go into effect in less than two weeks as the first major overhaul of the U.S. tax code in three decades.
President Donald Trump celebrated his first major legislative achievement at the White House with the Republican lawmakers who fast-tracked the bill through Congress, shaking their hands, joking and applauding, just hours after the last House vote sealed the victory.
“We are making America great again,” Trump declared. “We’re bringing the entrepreneur back into this country. We’re getting rid of all the knots and all the ties . . . And ultimately, what does that mean? It means jobs. Jobs, jobs, jobs.”
The bill now goes to the president’s desk for his signature. The White House said that the signing had not been scheduled yet, but that they expect it to happen in the next few days.
Once it does become law, the Republican tax bill that slashes corporate taxes, lowers individual rates, ends mandated health insurance and allows drilling in Alaska’s Arctic National Wildlife Refuge will become a defining issue for next year’s mid-term congressional elections.
The tax package offers some tax relief for middle-class families, which Trump on Wednesday said was the “the heart of our bill,” and cuts the corporate rate to 21 percent from 35 percent, which Trump called “probably the biggest factor of this plan.”
The bill reduces taxes on average for all income groups in both 2018 and 2025, the last year before the lower individual tax rates expire, the nonpartisan Tax Policy Center said, but higher-income households get larger tax cuts than lower- and middle-income groups.
The bill adds $1.5 trillion to the federal deficit over the next decade. Republicans say the economic growth the tax bill will generate will cover that debt. But the nonpartisan Tax Foundation said even accounting for growth the deficit, still will increase by $448 billion.
And it also ends the full deductibility of state and local taxes, offering instead a $10,000 cap for deducting property, sales and state income taxes — a big hit to Long Island and New York, as well as other high-tax states.
Senate Minority Leader Chuck Schumer (D-N.Y.) said Republicans had made a remarkable achievement: passing a tax cut bill that twice as many people oppose as approve, according to several polls.
“We are going to continue to hammer away at why this bill is so unpopular,” Schumer said. “We have a simple message for our Republican friends: Republicans will rue the day they passed this bill, and you can bet Democrats will make sure of that.”
House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.), said they were ready and willing to battle with Democrats for public support.
“The message to the hardworking taxpayers of America is ‘Your tax relief is on its way,’” Ryan said at the White House. “This is the kind of tax reform and tax cuts that get our economy growing to reach its potential. This gets us better wages, bigger paychecks.”
The path the finally passing the legislation took a slight detour,
On Tuesday afternoon, the House approved the reconciled version of the House and Senate bills in a 227-203 vote, with all Democrats and a dozen Republicans, including both Long Island GOP congressmen, voting no.
But Senate Democrats won challenges to three provisions in the bill when the Senate parliamentarian ruled them out of order under the arcane budget reconciliation rules that allow Republicans to avoid a filibuster.
The Senate jettisoned those provisions, and after nearly 10 hours of debate, approved the revised version 51-48 at 12:45 a.m. Wednesday, requiring the House to vote for a second time in two days. At midday Wednesday, House Republicans passed it 224 to 201, with the same dozen Republican defectors.