San Antonio Express-News: House tax bill OK’d without Democrats

WASHINGTON — In a big victory for Texas Republican Kevin Brady, the House passed a sweeping tax overhaul Thursday on a narrow party-line vote, setting up a showdown in the Senate that will test the unity of the GOP's slim majority.

The 227-205 vote brought President Donald Trump a step closer to a long-held GOP campaign promise: Dramatically cutting the rates for corporations, individuals and families, while taking away many deductions and credits.

Taxes, on average, would go down, Republicans said. But Democrats and some independent analysts predicted uneven benefits from the GOP legislation, which they said would further enrich the wealthy, deepen deficits and increase the overall tax burden on as many as 36 million middle-class Americans.

Significant changes are expected in the Senate, possibly even including the repeal of the individual mandate under former President Barack Obama's Affordable Care Act.

That provision was added to the Senate version Tuesday, cheering hard-right conservatives still smarting from their defeat on repealing Obamacare. But it also set up a battle that could narrow the Trump administration's prospects for a much-needed legislative victory in Congress.

Brady and House Speaker Paul Ryan, who was cheered by Republicans on the House floor, promised across-the-board tax relief for middle-class Americans, with an average savings of $1,182 for a typical family of four.

"You pass this bill, you grow the economy," Ryan said in a final appeal before the vote.

Despite a closed-door, GOP pep rally with Trump at the Capitol, 13 Republican lawmakers voted against the House bill — none from Texas. Facing unified Democratic opposition, Republicans could afford to lose only 22 votes from their side.

But even with the defections, the vote represented a career capstone for Brady, a Republican from The Woodlands and one of the chief tax-writers in Congress as chairman of the Ways and Means Committee.

For Brady, a longtime Houston congressman, the Tax Cuts and Jobs Act was the culmination of several years of internal GOP negotiations balancing lower tax rates, fewer credits and deductions, and large corporate tax breaks. The result, he vowed, would be simpler tax accounting, bigger paychecks and more plentiful work from strong economic growth and business dynamism.

He also called it the most significant rewrite of the U.S. tax code since the presidency of GOP icon Ronald Reagan, who signed a major tax reform bill in 1986 with bipartisan support.

"With this historic bill we'll provide real simplicity for every taxpayer, and we'll deliver real fairness to every hardworking American," Brady said in the final House debate. "Washington special interests who are now being propped up by absurd carve-outs and loopholes, get ready to stand up on your own."

Brady acknowledged, however, that the House vote is only step one.

"There are still some areas where we will and can make improvements," he promised lawmakers wary of jettisoning popular middle-class tax deductions for mortgage interest and state and local taxes.

Democrats and some mainstream economists cast doubt on the promise of a tax-cut-fueled economic boom, while Republicans from high-tax states like New York, New Jersey and California balked at the prospect of facing constituents with bigger tax bills.

Critics also pointed to estimates that GOP tax cuts would shrink federal revenues by some $1.5 trillion over the next decade, forcing cuts in major social programs like Medicaid and Medicare. Those deficit concerns appear to have sealed the opposition of centrist Democrats that Brady and others had courted.

"It is easy to vote for a tax cut," said Democratic Whip Steny Hoyer of Maryland. "It is harder to pay for what we buy."

Brady and other GOP leaders argue that the official estimates of lost revenue don't take into account the economic stimulus of the tax cuts, which some conservative economists believe would pay for themselves. For Republicans, one of the chief selling points of the tax legislation would be the lowering of the top corporate rate from 35 percent to 20 percent, which is intended to spur domestic investment.

But Republicans still face significant obstacles in the Senate, where at least two members of their caucus — representing the difference in their 52-48 majority — have expressed doubts in recent days. One, Wisconsin Republican Ron Johnson, said he opposed both versions of the tax bill because they favor large corporations over smaller so-called pass-through businesses. Another, Susan Collins of Maine, one of three Republicans who voted against a GOP effort to repeal Obamacare, said she has concerns about taking away that law's individual mandate.

A number of independent analyses have estimated that the House bill, though it lowers tax rates and doubles the standard deduction for families and individuals, could still end up costing taxpayers more in lost deductions, especially those in wealthy areas with high property values.

State, local taxes

The House bill would repeal most state and local taxes except for real estate taxes, which would be capped at $10,000. It also would limit the mortgage interest deduction to $500,000 of a loan. The Senate version would repeal all state and local tax deductions, though it would maintain the current mortgage write-off.

Some Democrats also lamented the loss of working-class write-offs for certain types of educational, work, and medical expenses.

"This is not the American Dream tax plan. This is the American nightmare, a tax scam of the worst proportions," said Houston Democrat Sheila Jackson Lee, warning that the lost deductions could be a setback for constituents trying to rebuild their lives after Hurricane Harvey.

U.S. Rep. Lloyd Doggett of San Antonio, the senior Democrat on the Ways and Means tax-writing panel, delivered a scathing appraisal on the House floor that included a jab at Alabama GOP Senate candidate Roy Moore.

"The promise of tax reform has degenerated into little more than a scam to aid tax dodgers," Doggett said. "While public attention is diverted to scandal in Alabama, Republicans rush through this sham of a tax bill, developed in the dark with lobbyists, before most Americans realize what is about to hit them in the face."

But U.S. Rep. Will Hurd of San Antonio, targeted like many other Republicans on the tax plan, said the need for revising the tax system is long overdue. Potential Democratic challengers showed up this week at his North Side office to assail Hurd on taxes.

Republicans hope to get a final bill through the Senate around Thanksgiving, giving House and Senate negotiators time to hash out differences and get a bill to the president's desk before the end of the year.

But they know they have little room for error.

Democrats, meanwhile, are seeking to exploit potential GOP differences over tax cuts that they say would most likely be financed by deficit spending. House Democratic Leader Nancy Pelosi, making her closing argument against the bill, said, "Oh where, oh where are the deficit hawks?"

Washington Bureau Staff Writer Bill Lambrecht contributed to this report.