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House to vote again on tax overhaul after Senate glitch

Education provisions tossed in Senate, which is still expected to vote Tuesday.

Updated

The House is expected to have to vote again Wednesday on Republicans’ sweeping tax legislation after several provisions were ruled out of order in the Senate.

However, it is not likely to stop the momentum for long, with the legislation still on track to be delivered to President Donald Trump this week. The Senate is expected to vote on the bill Tuesday night after striking the provisions, which relate to expanding tax-advantaged college savings accounts and taxing college endowments.

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The stumble is an embarrassment for Republicans, who just hours before were celebrating on the House floor and getting kudos from Trump for passing the landmark bill and sending it to the Senate. It also plays into the hands of Democrats who have been saying the speed with which Republicans are pushing the plan through is a recipe for chaos.

The House initially passed the $ 1.5 trillion tax code rewrite, which includes steep corporate and individual tax cuts, 227-203 early Tuesday afternoon, with the Senate set to follow suit later in the evening. But not long after, word started circulating about trouble with strict Senate budget rules that Republicans are using to avoid a Democratic filibuster of the legislation.

Still, passage appears assured in the Senate once the legislation is fixed, though the absence of Sen. John McCain — who is battling brain cancer — will only give Republicans a single vote to spare. Vice President Mike Pence delayed a trip to the Middle East to be on hand in case he has to break a tie.

After the House vote, Trump tweeted congratulations to the House GOP leadership “and all great House Republicans who voted in favor of cutting your taxes!”

The administration tentatively has planned an event at the White House at 2 p.m. on Wednesday with Republican lawmakers to celebrate the passage of the legislation, according to two sources familiar with the plans.

In today’s White House briefing, Sarah Huckabee Sanders indicated the White House was still in the middle of finalizing its plans and would offer more details once the Senate votes on the bill.

The importance of the vote to Republicans at both ends of Pennsylvania Avenue was apparent as Treasury Secretary Steven Mnuchin sat in the House chamber during debate.

The swift pace of final action also underlines Republicans’ determination to wrap up the tax bill by their self-imposed year-end deadline, as well as their need to turn to other crucial matters this week, notably keeping the government running past a Friday deadline.

But Democrats said Republicans were in a hurry for other reasons, as well.

“Given the bill’s substance, it’s no surprise they’re in such a rush,” Senate Minority Leader Chuck Schumer said in a statement. “Eleventh-hour hour backroom deals have managed to only make their bad bill even worse. They don’t want to discuss it, they don’t want to have sunlight shed on it, they don’t want anyone to know what’s in it because it is so, so bad and the public knows it.”

For House Speaker Paul Ryan, seeing the legislation enacted would be the culmination of a career-long pursuit of overhauling the tax code.

“This is a day I have looked forward to for a very long time,” he said on the House floor. “Today is about how much better things can be: More jobs, fairer taxes and bigger paychecks. Faster growth and real upward mobility. A strong economy that makes all of us stronger.”

But when Ryan proclaimed, “Today, we give the people of this country their money back,” he was heckled from the public gallery.

President Donald Trump is pictured. | AP Photo

“You’re lying, you’re lying!” a woman shouted. “Only the rich people are going to get any money!”

That’s the message Democrats have been trying to get across, as they scorn the Republican-only exercise as a giveaway to the wealthy and corporate interests. In the House, Democrat after Democrat stood to denounce the legislation.

Twelve House Republicans voted against the bill, all except one from high-tax New York, New Jersey and California. The coastal lawmakers objected to how the legislation scaled back a state and local tax writeoff, which they said would lead to a tax increase for many of their constituents.

It would be the biggest tax-code rewrite in decades, slashing the corporate tax rate for the first time in 30 years, overhauling taxation of both small and large businesses, and cutting rates on individual taxpayers.

With an eye toward next year’s midterm elections, Republicans are emphasizing the millions — 80 percent of taxpayers, according to the independent Tax Policy Center — who would get a tax cut next year. The average break would total $ 2,100, the group said Monday, though it would vary widely by income.

Republicans also are touting the plan as a boon to the economy, amid public skepticism that the plan will help the middle- and low-income Americans more than the wealthy and corporations.

Democrats are emphasizing how much of the cuts would accrue to high earners as well as the minority of taxpayers — about 5 percent, according to the Tax Policy Center — who would pay more next year under the plan.

Lawmakers are sure to continue battling over the legislation long after Trump inks it into law.

Americans are broadly skeptical of the tax plan.

One new poll shows low overall public support for the bill but strong backing among Republicans. Only 33 percent of all respondents to a CNN poll released Tuesday supported the plan, but among just Republican respondents support stood at 76 percent. Democratic opposition was overwhelming: 89 percent.

Republicans got slightly better news from a new POLITICO/Morning Consult poll. The survey shows 42 percent of voters support the legislation and 39 percent oppose it, and 18 percent undecided.

Mitch McConnell is pictured. | Carolyn Kaster/AP Photo

House Ways and Means Committee Chairman Kevin Brady, one of the architects of the Republican plan, said he wasn’t concerned by polling on the issue.

“I think the narrative and talking points about, against this are just standard fare, an easy narrative to run,” he told reporters. “I frankly think Democrats have overplayed their hand because when people back home and our local businesses see the tax relief, they’re going to know they weren’t really told the truth by the opponents of tax reform.”

The plan would make the government’s budget outlook substantially worse, adding $ 1.456 trillion to a debt that’s already nearly doubled over the past decade. Federal red ink is now at the highest levels it’s been since the government was paying down its World War II debts, and that’s sure to stoke calls to rein in the deficit.

Democrats are already accusing Republicans of using the worsening debt as a pretext for controversial cuts in government entitlement programs.

What’s more, much of the Republican plan is only temporary, with many provisions beginning to expire after next year. Most of the individual breaks would be gone by 2026, ensuring ongoing battles over their fate, much like lawmakers wrestled for years over what to do with George W. Bush’s tax cuts or their annual practice of passing of last-minute legislation that extended dozens of expiring tax breaks.

The plan may also alter Republicans’ relationship with the IRS. For years they’ve beaten up on the tax agency, yet they are now relying on the agency to implement their proposal. In section after section, their plan delegates authority to the IRS to figure out the details of how the provisions would work, an increased workload that will make it harder for lawmakers to continue pounding on the agency politically and slashing its budget.

For taxpayers, the bill will mean major — and sudden — changes in policy, most of which will take effect on New Year’s Day. The bill would hit urban areas particularly hard through cuts to the mortgage interest deduction, a long-standing break for state and local taxes, subsidies for public transportation, and a key funding method for roads and other public projects.

But because the bill was largely written in secret — a final draft was only released last Friday — tax experts are still poring through the legislation trying to understand the changes.

Aaron Lorenzo, Seung Min Kim and Rachael Bade contributed to this report.

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