Senate Passes GOP Tax Overhaul Bill In Early Morning Vote

WASHINGTON (CBSNewYork/CBS News/AP) -- Republicans pushed a nearly $1.5 trillion tax bill through the Senate early Saturday, as the party took a giant step toward giving President Donald Trump one of his top priorities by Christmas.3771782

The measure focuses its tax reductions on businesses and higher-earning individuals, gives more modest breaks to others and offers the boldest rewrite of the nation's tax system since 1986.

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Republicans touted the package as one that would benefit people of all incomes and ignite the economy. Even an official projection of a $1 trillion, 10-year flood of deeper budget deficits couldn't dissuade GOP senators from rallying behind the bill.

"The average family of four would get about $200 in tax relief, and that's pretty damn important," Senate Majority Leader Mitch McConnell said Saturday.

Trump hailed the bill's passage on Twitter, thanking McConnell and Senate Finance Committee Chairman Orrin Hatch, R-Utah. "Look forward to signing a final bill before Christmas!" the president wrote.

Presiding over the Senate, Vice President Mike Pence announced the 51-49 vote to applause from Republicans.

Sen. Bob Corker (R-Tenn.) was the only lawmaker to cross party lines, joining the Democrats in opposition.

"Obviously I'm kind of a dinosaur on the fiscal issues," said Corker, who battled to keep the bill from worsening the government's accumulated $20 trillion in IOUs.

The Republican-led House approved a similar bill last month in what has been a stunningly swift trip through Congress for complex legislation that impacts the breadth of American society. The two chambers will now try crafting a final compromise to send Trump.

After spending the year's first nine months futilely trying to repeal President Barack Obama's healthcare law, GOP leaders were determined to move the measure rapidly before opposition Democrats and lobbying groups could blow it up. The party views passage as crucial to retaining its House and Senate majorities in next year's elections.

Democrats derided the bill as a GOP gift to its wealthy and business backers at the expense of lower-earning people. They contrasted the bill's permanent reduction in corporate income tax rates from 35 percent to 20 percent to smaller individual tax breaks that would end in 2026.

"My Republican friends will ultimately pay consequences for this bill in 2018 and beyond," Senate Minority Leader Chuck Schumer (D-NY) said following the early morning vote.

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According to the Government Financial Officer's Association, almost every New York and New Jersey House Republican in a high-tax district opposes the plan, 1010 WINS' Andrew Falzon reported.

"Late last night, the Senate passed a tax bill that slashes tax rates for corporations and is hugely advantageous for the wealthiest Americas," New York Gov. Andrew Cuomo tweeted Saturday morning, adding, "Republicans in Congress are robbing New Yorkers of billions of dollars, endangering the health care of millions of Americans, and exploding the federal deficit."

"The @SenateGOP passed a bill they didn't even have time to read," tweeted New York City Mayor Bill de Blasio. "They voted to raise taxes on 87 million households, to kick 13 million Americans off their health insurance and to give wealthy companies a tax break at the expense of police officers, firefighters and teachers."

Connecticut Senator Richard Blumenthal said the GOP's plan would hike the federal deficit and threaten national security.

"The reason that our national debt is a threat to our national security, very simply, is that it prevents us from the kind of commitment and investment on national defense," he said early Saturday.

New Jersey Senator Cory Booker vowed to do everything possible to ensure what he calls the "embarrassment of a bill" never becomes law. 

Congress' nonpartisan Joint Committee on Taxation has said the bill's reductions for many families would be modest and said by 2027, families earning under $75,000 would on average face higher, not lower, taxes.

The bill is "removed from the reality of what the American people need," Schumer said. He criticized Republicans for releasing a revised, 479-page bill that no one can absorb shortly before the final vote, saying, "The Senate is descending to a new low of chicanery."

"You really don't read this kind of legislation," Sen. Ron Johnson, R-Wis., told home-state reporters, asked why the Senate was approving a bill some senators hadn't read. He said lawmakers needed to study it and get feedback from affected groups.

Democrats took to the Senate floor and social media to mock one page that included changes scrawled in barely legible handwriting. Later, they won enough GOP support to kill a provision by Sen. Pat Toomey, R-Pa., that would have bestowed a tax break on conservative Hillsdale College in Michigan.

The bill hit rough waters after the Joint Taxation panel concluded it would worsen federal shortfalls by $1 trillion over a decade, even when factoring in economic growth that lower taxes would stimulate. Trump administration officials and many Republicans have insisted the bill would pay for itself by stimulating the economy. But the sour projections stiffened resistance from some deficit-averse Republicans.

But after bargaining that stretched into Friday, GOP leaders nailed down the support they needed in a chamber they control 52-48. Facing unyielding Democratic opposition, Republicans could lose no more than two GOP senators and prevail with a tie-breaking vote from Vice President Mike Pence, but ended up not needing it.

Leaders' changes included helping millions of companies whose owners pay individual, not corporate, taxes on their profits by allowing deductions of 23 percent, up from 17.4 percent. That helped win over Wisconsin's Johnson and Steve Daines of Montana.

People would be allowed to deduct up to $10,000 in property taxes, a demand of Sen. Susan Collins of Maine. That matched a House provision that chamber's leaders included to keep some GOP votes from high-tax states like New York, New Jersey and California.

The changes added nearly $300 billion to the tax bill's costs. To pay for that, leaders reduced the number of high-earners who must pay the alternative minimum tax, rather than completely erasing it. They also increased a one-time tax on profits U.S.-based corporations are holding overseas and would require firms to keep paying the business version of the alternative minimum tax.

Sen. Jeff Flake, R-Ariz. -- who like Corker had been a holdout and has sharply attacked Trump's capabilities as president -- voted for the bill. He said he'd received commitments from party leaders and the administration "to work with me" to restore protections, dismantled by Trump, for young immigrants who arrived in the U.S. illegally as children. That seemed short of a pledge to actually revive the safeguards.

The Senate bill would drop the highest personal income tax rate from 39.6 percent to 38.5 percent. The estate tax levied on a few thousand of the nation's largest inheritances would be narrowed to affect even fewer.

Deductions for state and local income taxes, moving expenses and other items would vanish, the standard deduction -- used by most Americans -- would nearly double to $12,000 for individuals and $24,000 for couples, and the per-child tax credit would grow.

The bill would abolish the "Obamacare" requirement that most people buy health coverage or face tax penalties. Industry experts say that would weaken the law by easing pressure on healthier people to buy coverage, and the nonpartisan Congressional Budget Office has said the move would push premiums higher and leave 13 million additional people uninsured.

Drilling would be allowed in the Arctic National Wildlife Refuge. Another provision, knocked out because it violated Senate budget rules, would have explicitly let parents buy tax-advantaged 529 college savings accounts for fetuses, a step they can already take but which anti-abortion forces wanted to inscribe into law. There were also breaks for the wine, beer and spirits industries, Alaska Natives and aircraft management firms.

(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)

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• Tax Reform