US Senate pushes ahead on Trump tax cuts as nonpartisan analysis raises price tag

WASHINGTON - The US Senate version of President Donald Trump’s sweeping tax-cut and spending Bill will add US$3.3 trillion (S$4.2 trillion) to the nation’s debt, about US$800 billion more than the version

passed in May by the House of Representatives

, a nonpartisan forecaster said on June 29.

The Congressional Budget Office issued its estimate of the Bill’s hit to the US$36.2 trillion federal debt as Senate Republicans pushed the Bill forward in a marathon weekend session.

Republicans, who have long voiced concern about growing US deficits and debt, have rejected the CBO’s longstanding methodology to calculate the cost of legislation.

But Democrats hope the latest, eye-widening figure could stoke enough anxiety among fiscally-minded conservatives to get them to buck their party, which controls both chambers of Congress.

“Republicans are doing something the Senate has never, never done before, deploying fake math and accounting gimmicks to hide the true cost of the Bill,” Democratic Senate Minority Leader Chuck Schumer said as debate opened on June 29.

“Republicans are about to pass the single most expensive Bill in US history, to give tax breaks to billionaires while taking away Medicaid, SNAP benefits and good paying jobs for millions of people.”

The Senate only narrowly advanced the tax-cut, immigration, border and military spending Bill in a procedural vote late on June 28, voting 51-49 to open debate on the 940-page mega-Bill.

Mr Trump on social media hailed June 28’s vote as a “great victory” for his “great, big, beautiful Bill.”

In an illustration of the depths of the divide within the Republican Party over the Bill, Senator Thom Tillis said he would not seek re-election next year, after Mr Trump threatened to back a primary challenger in retribution for Mr Tillis’ June 28 night vote against the Bill.

Mr Tillis’ North Carolina seat is one of the few Republican Senate seats seen as vulnerable in next year’s midterm elections. He was one of just two Republicans to vote no on June 28.

Mr Trump wants the Bill passed before the July 4 Independence Day holiday. While that deadline is one of choice, lawmakers will face a far more serious deadline later this summer when they must raise the nation’s self-imposed debt ceiling or risk a devastating default on US$36.2 trillion in debt.

“We are going to make sure hardworking people can keep more of their money,” Senator Katie Britt, an Alabama Republican, told CNN’s State of the Union on June 29.

Hits to benefits

Senator Mark Warner, a Democrat from Virginia, said this legislation would come to haunt Republicans if it gets approved, predicting 16 million Americans would lose their health insurance.

“Many of my Republican friends know ... they’re walking the plank on this and we’ll see if those who’ve expressed quiet consternation will actually have the courage of their convictions,” Mr Warner told CBS News’ Face the Nation with Margaret Brennan.

The legislation has been the sole focus of a marathon weekend congressional session marked by political drama, division and lengthy delays as Democrats seek to slow the legislation’s path to passage.

Mr Schumer called for the entire text of the Bill to be read on the Senate floor, a process that began before midnight June 28 and ran well into June 29 afternoon.

Following up to 20 hours of debate on the legislation, the Senate will enter an amendment session, known as a “vote-a-rama,” before voting on passage. Lawmakers said they hoped to complete work on the Bill on June 30.

Senator Rand Paul of Kentucky, the other Republican “no” vote, opposed the legislation because it would raise the federal borrowing limit by an additional US$5 trillion.

The mega-Bill would extend the 2017 tax cuts that were Mr Trump’s main legislative achievement during his first term as president, cut other taxes and boost spending on the military and border security.

Representative Michael McCaul, however, warned that fellow Republicans who do not back Mr Trump on the Bill could face payback from voters.

“They know that their jobs are at risk. Not just from the president, but from the voting – the American people. Our base back home will not reelect us to office if we vote no on this,” Mr McCaul also told CBS News.

Senate Republicans, who reject the CBO’s estimates on the cost of the legislation, are set on using an alternative calculation method that does not factor in costs from extending the 2017 tax cuts. Outside tax experts, like Mr Andrew Lautz from the nonpartisan think tank Bipartisan Policy Centre, call it a “magic trick.”

Using this calculation method, the Senate Republicans’ budget Bill appears to cost substantially less and seems to save US$500 billion, according to the BPC analysis.

If the Senate passes the Bill, it will then return to the House of Representatives for final passage before Mr Trump can sign it into law. The House passed its version of the Bill in May. REUTERS