Near the end of his first year in office, President Donald Trump could be on the verge of his first major legislative victory: an overhaul of America’s tax code and a partial repeal of former President Barack Obama’s signature health care law.
“As a candidate, I promised we would pass a massive tax cut for the everyday working American families who are the backbone and the heartbeat of our country,” Trump tweeted Sunday. “Now, we are just days away.”
Congressional Republicans appear to have the votes to permanently slash corporate taxes, temporarily cut taxes paid by wage and salary earners, and increase America’s national debt by up to $1.5 trillion. The thousand-page bill was revealed Friday after days of bicameral negotiations yielded a final version of the legislation that gained the support of several Republican holdouts.
“I have decided to support the tax reform package,” Sen. Bob Corker of Tennessee announced in a statement. “This bill is far from perfect … but after great thought and consideration, I believe that this is a once-in-a-generation opportunity to make U.S. businesses domestically more productive and internationally more competitive and is one we should not miss.”
Republicans are betting that eight consecutive years of U.S. economic growth can be extended and accelerated with a major dose of stimulus in the form of tax cuts.
Democrats argued the tax package is unfair and unwise.
“The bill is written to give massive, permanent tax breaks to the rich and corporate interests, many of which ship U.S. jobs overseas,” said California Congressman Mike Thompson, delivering the Democratic weekly address. “It does give a handful of temporary tax cuts to some middle-class taxpayers but actually raises taxes on millions of middle and working-class families.”
“It’s the height of hypocrisy for Republicans to vote for a tax cut that would add at least $1 trillion to the deficit after spending eight years railing against the national debt,” Democratic Sen. Dianne Feinstein of California wrote on Twitter.
History provides a less-than-clear picture of the impact of tax cuts. The U.S. economy expanded briskly after tax cuts in the 1980s, but had even higher growth rates after a tax hike in the 1990s. Tax cuts in 2001 and 2003 were followed by several years of moderately robust growth, then a major recession.
Republicans insisted Americans will be better off with a reduced tax burden.
“Everybody is going to benefit, but I think the greatest benefit is going to be for jobs and for the middle class,” Trump told reporters on Saturday. “Our economy is doing fantastically well. But it has another big step to go, and it cannot take that step unless we do the tax bill.”
Democrats contended the bill’s benefits are heavily skewed to the wealthy and that America’s poor and elderly will pay a heavy price under the Republican agenda.
“Now they [Republicans] have blown a big hole in the debt,” Maryland Sen. Chris Van Hollen said on ABC’s “This Week” program. “And if you look at their budget, it is right there — their plan for dealing with that is to cut Medicare by $500 billion and Medicaid by over $1 trillion.”
Barring last-minute defections or absences among Republicans, Congress could send the tax bill to the White House for Trump’s signature as early as Wednesday. Minority Democrats cannot block the bill on their own, but have pledged to make it a major campaign issue in next year’s midterm elections.