- The Senate voted to pass the massive Republican tax bill early Saturday morning.
- The bill proposes huge changes to business and individual taxes.
- It passed 51 to 49, with one Republican voting against it.
Senate Republicans early Saturday morning passed their massive proposed overhaul to the tax code after GOP leaders scrambled Friday to make last-minute changes to their bill, a complete version of which emerged only late in the evening.
The bill passed the chamber, 51 to 49, with Republican Bob Corker voting against it.
Throughout the process, Senate Majority Leader Mitch McConnell attempted to appease deficit hawks, moderates, and members concerned about small business, all while keeping the TCJA within Senate rules.
The last-minute changes continued into Friday evening. The vote came just three weeks after the bill, the Tax Cuts and Jobs Act (TCJA), was introduced.
As the night rolled on, we followed the debate live. Below is a recap of what you missed.
1:51 a.m.: The bill passes, 51 to 49.
The vote was 51 to 49.
All Republicans but Sen. Bob Corker of Tennessee voted for it.
All Democrats voted against.
10:07: Time for amendment votes.
McConnell proceeded to votes on amendments. We’ll updated as votes are taken:
- Joe Manchin (D-West Virginia) introduced a motion to send the bill back to Finance Committee. The vote failed 38 to 61.
- Tim Kaine (D-Virginia) introduced an amendment to reinstate the alternative minimum tax, increase the top individual tax rate, makes the individual tax changes permanent. The amendment failed 34-66.
- Ted Cruz introduced an amendment to allow funds from 529 college savings accounts to be used towards tuition for K-12 school. The amendment was adopted after Vice President Pence broke a 50-50 tie.
- Bob Menendez (D-New Jersey) introduced a motion to send the bill back to the Finance Committee with instructions to add the state and local deduction back to the bill. The motion failed 48-52.
- Marco Rubio (R-Florida) introduced an amendment that that would make the child tax credit more generous, paid for by cutting the corporate rate to 20.94% instead of the 20% proposed in the TCJA. This also failed 29-71.
- Sherrod Brown (D-Ohio) introduced an amendment that would have increased the size of the child tax credit permanently. It failed 48-52.
- Bernie Sanders (I-Vermont) introduced an amendment that was a point of order to try and force a 67-vote threshold for future bills that cut Social Security, Medicare, and Medicaid. The amendment failed 46-54.
12:08: Pence breaks a tie on an amendment from Ted Cruz to expand 529 school savings accounts.
The amendment, which was agreed to after Vice President Pence broke a 50-50 tie, would allow people to use 529 savings accounts for K-12 tuition and not just college.
Democrats said the change is a backdoor way to drive people toward private school instead of public schools.
This is also the first time Pence has been needed for a vote.
11:50: The Congressional Budget Office released its analysis of the newest TCJA’s budget impact.
The CBO determined that the final version of the Senate bill would add $US1.4478 trillion to the deficit over 10 years, just squeezing under the $US1.5 trillion limit allowed under Senate rules.
9:30: Chuck Schumer makes a motion to suspend debate.
Senate Minority Leader Chuck Schumer made a motion to recess the Senate until Monday and delay the vote until the Democrats can read the new changes to the bill.
“Historians will mark today as one of the darkest black letter days in the long history of this senate,” Schumer said before making the motion.
The motion failed 48 to 52. The vote was along party lines.
9:20 pm: Democrats slam change to bill that appears to only help a single, conservative college.
Democrats slammed a new provision in the updated TCJA that exempts any college or university that declines federal funding under Title IV from a new 1.4% excise tax on large university endowments.
According to Democrats, this provision would only benefit Hillsdale College, a conservative Michigan school.
8:37 pm: Marco Rubio makes a final pitch for his change to the child tax credit.
Sen. Marco Rubio took to the Senate floor to make the case for his amendment that would make the child tax credit refundable up to the amount of payroll taxes, making the credit more generous.
To pay for the change, Rubio wants to cut the corporate rate to 20.94% instead of the 20% proposed in the Republican bill. The TCJA already proposes to increase the credit to $US2,000 from $US1,000 under current law.
There was a possibility that Democrats could support the amendment, also backed by GOP Sen. Mike Lee. But Democratic Sen. Sherrod Brown later said on the floor that bipartisan talks broke down because the Rubio amendment would only be temporary.
6:45: Senate Democrats finally got the bill from the GOP, but its covered in handwritten notes.
In a sample provided to Business Insider, the final version of the bill has numerous handwritten notes in the margin of pages. A few pages were even crossed out with a pen.
Democratic lawmakers are complaining about what they say is unreadable handwriting on Twitter.
“Trying to review the #GOPTaxScam but they are making hand-written changes to brand new text as we speak – can anyone else read this?” Sen. Dick Durbin tweeted.
6:00: An amendment to the tax bill could give big breaks to large partnership firms.
An amendment introduced by Sen. John Cornyn would allow publicly traded partnerships (PTPs) to take the pass-through business deduction. According to Victor Fleischer, a tax-law professor at the University of San Diego, this could apply to some private equity firms but an aide to Cornyn denied that this would benefit those firms.
While its unclear the treatment for financial firms, energy master limited partnerships could be able to take the deduction. Many MLPs are based in Cornyn’s home state of Texas.
5 p.m.: Bob Corker will vote against the bill
Corker, who has long held concerns about the deficit impact of the bill, said he would vote against it. He is so far the only Republican senator to come out against the bill.
“This is yet another tough vote. I am disappointed,” Corker said in a statement. “I wanted to get to yes. But at the end of the day, I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations.”
4 p.m.: Susan Collins officially announces she will vote for the bill
Collins said she secured key changes to the bill – including adjustments to the medical expense deduction and the state and local tax deduction.
“Having secured these key improvements in the bill, as well as the commitments to legislation to help lower health insurance premiums, I will cast my vote in support of the Senate tax reform bill,” Collins said in a statement. “As revised, this bill will provide much-needed tax relief and simplification for lower- and middle-income families, while spurring the creation of good jobs and greater economic growth.”
3 p.m.: Sen. Claire McCaskill tweets a list of possible GOP amendments that she got from a lobbyist.
McCaskill, a Democrat from Missouri, tweeted a picture that she said was sent to her by a lobbyist. The list shows a series of amendment from Republicans that are set to be considered and possibly added to the tax bill.
“This is so bad. We have just gotten list of amendments to be included in bill NOT from our R colleagues, but from lobbyists downtown,” McCaskill said in the tweet. “None of us have seen this list, but lobbyists have it. Need I say more? Disgusting. And we probably will not even be given time to read them.”
2 p.m.: Susan Collins tweets on the bill’s treatment of medical expenses, state and local tax, and retirement contributions that got her to “yes.”
Sen. Susan Collins laid out the details of the changes that got her to support the TCJA. They are:
- Allowing people to deduct state and local property taxes up to $US10,000. The original Senate bill repealed the state and local tax deduction completely. Despite the compromise, people living in high-tax states like New York and California will likely get hit by the loss of the deduction.
- Lowering the threshold at which people can deduct medical expenses. Currently, people can deduct medical expenses if they take up more than 10% of their income.
- Eliminating a change in the TCJA that would have complicated “catch up” contributions to retirement accounts for “for church, charity, school, & public employees.”
1:40: The Senate bill will reportedly keep the alternative minimum tax.
The alternative minimum tax (AMT), a separate tax structure designed to ensure that wealthier Americans don’t take massive deductions that help them avoid all taxes, is expected to remain in the Senate bill after last-minute wrangling.
The bill would reportedly increase the threshold at which people must use the AMT.
This could be helpful as a pay-for for changes like Collins’ partial state and local tax deduction preservation.
12:30: Susan Collins says her compromise on the state and local tax deduction will be in the final bill.
Collins’ change would allow people to deduct up to $US10,000 of state and local property taxes from their federal bill. Current law allows people to deduct all of their state and local property, income, and sales taxes and the original Senate TCJA would have repealed that completely.
This could make it easier for the Senate and House to reconcile their bills, since Collins’ change is exactly the same as the House plan. The deduction is generally a bigger political lift in the House, since there are Republican members from areas like New York and California where state and local taxes are higher.
12:05: Jeff Flake, one of the last Republicans holdouts, is a “yes” on the bill.
Flake, who had raised concerns about the bill’s impact on the deficit, said in a statement that he would vote for the TCJA.
Flake said he was trying to get two things out of the tax bill: to “eliminate the $US85 billion expensing budget gimmick” and a promise from GOP leaders to work with him on a bill to protect the Deferred Action for Childhood Arrivals (DACA) program.
“Having secured both of those objectives, I am pleased to announce I will vote in support the tax reform bill,” Flake said.
12:00 pm: McConnell tells reporters “we have the votes”
Republicans seem pretty confident that they have the 50 votes necessary to pass the TCJA.
Sen. Ted Cruz told reporters it is “likely we will pass this bill later today.”
11:30 am: The Tax Policy Center says the economic boost from the bill is much less than Republicans promised.
A new analysis from the nonpartisan Tax Policy Center shows that the TCJA would only boost US GDP by 0.7% in 2018. This falls far short of the amount needed for the bill to “pay for itself” as Republican leaders and Trump officials promised.
In fact, the TPC said that even with the additional revenue created from the economic boost the bill would rack up $US1.23 trillion in new debt.
10:55 am: GOP leaders think the bill will pass, but Susan Collins pumps the breaks.
Senate GOP Whip John Cornyn told reporters that the leadership is feeling pretty good about the tax bill’s prospects.
“We have at least 50 and we’re still working,” he told reporters before a meeting of the Republican conference.
For Cornyn’s predictions to be the case, Republican leaders need to have Sen. Susan Collins on board but she cautioned against making assumptions.
“I don’t know how Senator Cornyn can speak for me, I speak for myself,” Collins told reporters but said they were making “good progress on the bill.”
Debate begins and a quick recap
Debate on the tax bill is expected to lead off with statements from the party leaders. The first amendment votes are scheduled for 11 a.m. ET.
The Senate will resume the drama that was suspended on Thursday, when GOP leaders called it a night to try and figure out the last-minute changes to their bill.
A final vote was possible Thursday night, but Republican leaders hit a snag when the Joint Committee on Taxation – the official congressional scorekeeper – released an analysis that showed the bill would only increase GDP 0.8% over 10 years.
The analysis also showed the bill would grow the federal deficit by $US1 trillion over that timeframe even when accounting for that growth.
The analysis renewed concerns from Sens. Bob Corker and Jeff Flake about the legislation’s potential effect on the deficit.
The pair’s idea of a trigger that would increase federal revenue was ruled impermissible by the Senate parliamentarian, a kind of umpire for Senate rules, sending Republican leaders back to the drawing board.
McConnell and leadership got a boost when Sens. Ron Johnson and Steve Daines, who had been on the fence, said on Friday that they would support the bill. Johnson told Wisconsin radio station WISN that his support gave Republicans enough votes to pass the bill even without Corker and Flake.
Politics: Here’s who Mitch McConnell needs to win over
While it appears that McConnell may have already secured the necessary 50 votes (with Vice President Mike Pence breaking the tie) with the addition of Johnson and Daines, here are some GOP senators on the fence.
- Bob Corker and Jeff Flake: The most unlikely votes for McConnell to get. These two are worried about the impact of the bill on the federal deficit. They had proposed a “trigger” to increase taxes if the bill did not deliver economic growth. After the Senate parliamentarian ruled that provision ineligible, Corker said he wanted more than $US350 billion in additional revenue in the bill.
- Susan Collins: Collins introduced a slew of amendments ,including one that would reinstate part of the state and local tax deduction, that she said would need to be added to win over her support. She also wants the Alexander-Murray Obamacare stabilisation passed along with the tax bill.
- Marco Rubio and Mike Lee: The pair introduced an amendment that would raise the corporate tax rate to 22% in order to make the child tax credit more generous. It is unclear if the pair would vote for the bill without the amendment.
- Ron Johnson and Steve Daines: Originally, it appeared that they were accepting of a 20% pass-through deduction rate – then they needed 23%. Who’s to say they may not ask for more?
Process: Here’s what’s on tap
The bill is required to go through 20 hours of debate, split evenly between Republicans and Democrats.
As debate starts on Friday, there is roughly seven hours of debate left. After debate concludes, the Senate will have what is known as a vote-a-rama in which members will consider a slew of amendments in succession.
If senators use the full allotted time for debate, that would push the vote-a-rama to around 5 or 6 p.m ET. Republican can also choose to forgo their time, which would move the vote-a-rama up to about 2 p.m. ET if Democrats decide to use all of their debate time.
After the vote-a-rama, McConnell would submit the text of the finished bill as a substitute amendment, replacing the original bill text, and the final vote would take place.
9:50: Senate rules trip out some provisions of the tax bill.
According to Richard Rubin at the Wall Street Journal, three pieces of the bill were pulled out due to a violation of the Byrd rule. The rule mandates that all legislation going through budget reconciliation, such as the TCJA, must impact the budget.
The three pieces that were reportedly removed are:
- A provision that would have allowed parents to set up 529 college savings accounts for unborn children.
- A new tax on some foreign airlines such as Qatar Airways and Emirates Airline.
- A provisions that would have supplied tax relief to victims of flooding disasters.
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