The House Ways and Means Committee advanced a slew of President Trump’s top tax priorities, Wednesday morning, setting the stage for a high-stakes sprint to get the provisions through the GOP’s razor-thin majority.
The panel advanced the legislation which is part of the party’s package containing Trump’s legislative agenda in a party-line 26-19 vote following an hours-long, overnight meeting that featured heated debate, scores of Democratic-led amendments, all of which were rejected, and ample estimates of the impact of the proposed policy.
The tax bill now heads to the House Budget Committee, which is tasked with combining all the portions of the Trump agenda bill into one package in advance of its consideration in the entire chamber.
The tax legislation, which spans 389 pages, makes the 2017 income tax rates permanent a top priority for Trump and congressional Republicans implements some of the president’s campaign promises including no tax on tips or overtime through 2028, and temporarily increases the child tax credit, among several other provisions.
The advancement of the measure through the House Ways and Means Committee marks a notable step in the right direction for Speaker Mike Johnson (R-La.) and for the panels’ chair Rep. Jason Smith (R-Mo.), who was tasked with crafting the centerpiece of the GOP’s “one big, beautiful bill.”
“The American people that this bill was crafted for may not have an army of DC lobbyists to defend them, but they do have us and they do have President Trump and that’s why we’re here to fight for the working men and women who built this country,” Smith said at a press conference ahead of the mark up. “Failure is not an option through this process. America first is what President Trump promised, and that’s what this committee will deliver in the ‘one big, beautiful bill.’”
The road ahead, however, remains rocky.
House Republicans are still at odds over the state and local tax (SALT) deduction cap, which has emerged as one of the biggest and most complicated hangups dogging the party’s mega bill. The House Ways and Means Committee’s bill includes a $30,000 SALT deduction cap for individuals making $400,000 or less, a proposal that SALT Caucus members have rejected.
Moderate Republicans from high-tax blue states including New York, New Jersey and California have pushed to include a significant increase to the SALT deduction cap, which hardline conservatives are opposed to because of the costly price tag of such a move.
While the House Ways and Means Committee advanced the text with the $30,000 deduction cap, it could still change when the House Rules Committee considers the legislation and sets it up for debate and a vote in the full chamber.
Johnson on Tuesday was optimistic that the group would reach an agreement on Wednesday.
“It will probably be tomorrow only because we need the joint tax people, the number crunchers, to do all of that work tonight, and we’ve asked them to do a lot,” he told reporters after meeting with members of the SALT Caucus. “We’re looking at different facts and figures, so I suspect the final analysis will be tomorrow.”
There is room for a larger SALT deduction cap. The Joint Committee on Taxation (JCT), a congressional scorekeeper, found that the tax portion of the Trump agenda bill would add about $3.7 trillion to the deficit through 2034, which is lower than the $4.5 trillion ceiling the panel had to work with. Leadership could use those extra hundreds of billions of dollars to increase the deduction cap.
Rep. Richard Neal (Mass.), the top Democrat on the House Ways and Means Committee, said he would like to see an estimate that goes through 2035.
The centerpiece of the Republican tax bill is the extension of the cuts to individual tax rates 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent which will cost $2.2 trillion through 2034. The bill reinstates a number of business tax breaks, including the coveted and expanded 23-percent 199A passthrough deduction, half of which is claimed by taxpayers in the highest-earning 1 percent of U.S. households.
Distributional analysis by the JCT of the Ways and Means text showed that the largest portion of the Republican tax reductions would go to the highest earning fifth of U.S. households.
According to the JCT, the lowest-earning fifth of Americans will see a $3.6 billion reduction in taxes; the second-lowest fifth will see a $24.4 billion reduction; the middle group of earners will get a $49.6 billion reduction; the segment above that will get a $106.3 billion reduction. And the top-earning fifth will get a $384.6 billion reduction.
Democrats proposed a number of amendments to the bill during the committee markup, including getting rid of Trump’s emergency tariff powers, reinstating health care subsidies that set to expire and that will kick more than 4 million Americans off of federal health insurance programs, as well as increasing the SALT cap to $80,000. None were adopted.
