House GOP tax plan would add $1.7 trillion to debt over decade, CBO projects
The tax reform plan crafted by House Republicans would add $1.7 trillion to the debt over the next decade, according to a brief analysis released Wednesday by the nonpartisan Congressional Budget Office (CBO).
The projection could be a problem for Republicans because they are using special budget reconciliation rules to avoid a 60-vote threshold in the Senate and those rules required that the bill only increase the federal debt by $1.5 trillion over 10 years.
House Republicans unveiled their tax overhaul last week, and have been marking up their legislation in committee this week. Senate Republicans have not released their proposal yet. Several GOP lawmakers in the House have already come out against their colleagues' plan.
The plan would reduce tax rates for low and middle-income Americans and doubles the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples. The bill would eliminate certain taxes, like the Alternative Minimum Tax and the so-called "death tax."
While Republicans said that they will would preserve the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes, they've capped the deduction at $500,000. According to the IRS, Americans are under current law able to deduct interest on their mortgages of up to $1 million.
The plan establishes a new family credit, and would expand the child tax credit from $1,000 to $1,600. It would also preserve the child and dependent care tax credit of $300. The plan would also preserve the earned income tax credit and the home mortgage interest deduction.
It would lower the corporate tax rate to 20 percent, which the talking points say are the largest reduction for the U.S. corporate tax rate in history. It would also lower the tax rate on "hard-earned business income of Main street job creators" to no more than 25 percent, the talking points say.
The proposal would make "no changes" to retirement savings options including 401(k)s and individual retirement accounts.
CBS News' Catherine Reynolds contributed to this report.