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Senate Republicans advance tax bill toward vote later this week, but changes are still being made

Senate Republicans advance tax bill toward vote later this week, but changes are still being made
Senate Majority Leader Mitch McConnell is working to prevent defections from his 52-seat Republican majority. (Chip Somodevilla / Getty Images)

Senate Republicans pushed their tax plan past another key hurdle Wednesday, a show of momentum for President Trump’s top priority even as frantic negotiations with GOP holdouts made final passage uncertain.

A procedural vote, which passed 52 to 48, with all Republicans in favor and all Democrats opposed, marked an important milestone as the GOP-led Congress scrambled to deliver a significant accomplishment by the end of Trump’s first year in office.

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It was the first time the plan had been considered by the full Senate. A final vote is likely by the end of the week.

Still the $1.5-trillion package remains in flux. Senate Majority Leader Mitch McConnell (R-Ky.) is working behind the scenes to prevent defections from his 52-seat Republican majority. He can afford to lose only two votes, assuming Vice President Mike Pence breaks a tie.

But at least eight Republican senators have voiced concerns. And even though they voted Wednesday in favor of opening debate on the bill, they could still vote against the final package.

Some Republicans, led by Sen. Bob Corker (R-Tenn.), want assurances the tax cuts won’t add to the deficit. Others, including Sen. Ron Johnson (R-Wis.), are pushing for increased benefits to so-called pass-through entities, including small businesses, law firms, real estate partnerships and other wealthy professionals.

Significant revisions to the legislation still may be made ahead of the final vote, and negotiations could continue in a conference committee as the House and Senate reconcile their different bills.

To pay for concessions negotiated in recent days to win over reluctant Republicans, GOP Senate leaders need to find about $160 billion in additional revenue. It remains unclear where that money will come from, but some lawmakers are mulling whether to scale back the proposed corporate tax cut. Under the current plan, the rate would drop substantially, from 35% to 20%, though some senators support increasing that to 22%.

The White House swiftly opposed that option, and Trump reiterated his promise for a 20% corporate rate that has been the centerpiece of the Republican plan.

“That's good for everybody in the room, whether you have a company, or whether you want a job, because we're going to bring back jobs,” he said, standing before a pair of Christmas trees at a rally in St. Charles, Mo. “With Trump as your president, we are going to be celebrating Merry Christmas again and it’s going to be done with a big beautiful tax cut.”

One key change sought by Corker and other senators — inserting a trigger mechanism to roll back the tax breaks if economic growth doesn’t cover costs as promised — was met with strong opposition from big business and conservatives, including a group backed by the influential Koch brothers that has been running digital ads and robocalls targeting wavering senators on tax cuts.

Instead, GOP senators began floating an alternative trigger mechanism that would impose automatic spending cuts to prevent deficits. But that idea also ran into resistance from some lawmakers.

“The trigger has been a moving target,” said Sen. Susan Collins, a Maine Republican, who said she had agreed to vote to open debate but was not yet supportive of the tax plan.

Collins won a commitment from McConnell to address healthcare fixes to prevent insurance premium increases if the tax bill includes a repeal of the Affordable Care Act requirement that all Americans have health insurance. Experts say such a repeal could cause market disruptions.

Collins wants votes on two bipartisan healthcare bills that would seek to stabilize markets — one from Sen. Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.), and another from Collins and Sen. Bill Nelson (D-Fla.). Leaders agreed those would happen this year, possibly as part of a must-pass spending bill next week.

But Collins is still seeking other changes to the tax bill, including a provision championed by Sen. Marco Rubio (R-Fla.) that would make the expanded $2,000 child tax credit refundable. That would cost as much as $180 billion over the decade.

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“We’re doing this one step at a time,” she said. “I’m having ongoing negotiations … on a host of issues.”

Late Wednesday, leaders reached an agreement with Johnson to increase the 17.4% income deduction for pass-through businesses to 20%, which helped bring him on board for the procedural vote. But he too is seeking further changes.

The Senate GOP’s tax package, like one passed by the House, hews to a blueprint that lowers corporate and some individual tax rates but allows fewer deductions. Experts say the approach provides more benefit to big businesses and wealthy individuals than average Americans.

The corporate cuts, for example, would be permanent, while the individual cuts expire after eight years in the Senate plan.

Studies show that while most Americans, on average, would see tax cuts, some taxpayers — especially lower- and middle-income filers — would see tax hikes, especially once the reduced rates expire. The package will add $1.5 trillion to the deficit, and some senators complain there has not been enough analysis to see if economic growth will cover those costs as Republicans argue.

Others senators, though, worried Wednesday that ongoing talks could delay momentum, especially if views hardened among Republicans, who have not won support from Democrats and are trying to pass the legislation on their own.

“I don’t think anybody in the Milky Way thought this would be easy,” said Sen. John Kennedy (R-La.). “I’m ready to saddle up and vote.”

Ahead of the vote, McConnell made it clear that time was short and the only way negotiations could continue was to start the voting process.

Republicans are rushing to advance the tax plan as the legislative agenda piles up with other items, including next week’s votes to continue funding the government and avoid a shutdown.

They are eager to close out the year, before facing midterm election voters, having delivered on a Trump priority.

“This is our chance to deliver relief for the people who have sent us here,” McConnell urged his colleagues. “And the way that we can do that is by voting to proceed to the bill.”

Times staff writer Noah Bierman in Washington contributed to this report.

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