Trump tax overhaul adopted by House

House Speaker Paul Ryan (at centre) with fellow House Republicans after the passage of the tax cut Bill at the US Capitol on Thursday.
House Speaker Paul Ryan (at centre) with fellow House Republicans after the passage of the tax cut Bill at the US Capitol on Thursday.PHOTO: AGENCE FRANCE-PRESSE

Debate shifting to Senate, where Republican victory is less certain

WASHINGTON • House Republicans have delivered a first-step victory to United States President Donald Trump by passing a landmark tax overhaul, but the debate now shifts to the Senate, where a narrower path to success awaits.

Mr Trump had rallied his party foot soldiers barely an hour earlier in the US Capitol, leaning on them to advance the sweeping tax cuts for corporations and individuals as he seeks to lock down a first major legislative win by year's end.

The House of Representatives on Thursday voted 227 to 205 to pass the legislation after Mr Trump addressed Republican members in person and urged them to get the measure over the finish line.

Mr Trump, in a tweet, congratulated the House for taking "a big step towards fulfilling our promise to deliver historic TAX CUTS for the American people by the end of the year". The Bill's success also marked a key victory for House Speaker Paul Ryan, who has struggled to get Mr Trump's agenda through Congress.

Mr Ryan reiterated his assertion that in the first year, the cuts will save US$1,182 (S$1,600) for a typical family of four earning US$59,000. The overhaul is "about tax relief, it's about fairness, it's about simplicity, it's about easing the stress and anxiety in this country", he said.

It was also clearly about checking a key box that had been a prominent campaign pledge after Mr Trump and his Republicans failed on several attempts to repeal former president Barack Obama's healthcare law.

House Republican Don Bacon told reporters that Mr Trump saw Thursday's vote as a "do-or-die" effort. "Hey, you got a chance to be mediocre or to be great. Today's your chance to get it right," Mr Trump told the Republicans, according to Mr Bacon.

Speaker Paul Ryan reiterated his assertion that in the first year, the cuts will save US$1,182 (S$1,600) for a typical family of four earning US$59,000. The overhaul is "about tax relief, it's about fairness, it's about simplicity, it's about easing the stress and anxiety in this country", he said.

Several lawmakers burst into applause on the House floor when the Bill passed, despite concerns by some Republicans in high-tax states like New Jersey that their constituents could end up paying more to Uncle Sam. Thirteen Republicans voted against the legislation. No Democrats supported it.

With the first major hurdle cleared, conservative congressman Dave Brat said Mr Trump's role will be as messenger in chief.

"We just want him to sell it to America," Mr Brat said.

The overhaul is a dicier proposition in the Senate, where Republicans hold a slim majority, 52-48.

Mr Ron Johnson became the first Senate Republican to publicly oppose the measure, saying it hands major tax breaks to corporations while treating other businesses differently. "I'm not going to vote for this tax package," he told the Wall Street Journal on Wednesday.

With senators expected to vote along party lines, Republicans can afford only two defectors. If three vote "no", the Bill fails.

Adding a new twist to the ambitious legislation, Senate Republicans have bowed to Trump pressure and included a repeal of the Obamacare individual mandate in their tax overhaul. Republicans are keen to take another stab at crippling the 2010 healthcare law.

Repealing the rule that requires individuals to have health insurance or pay a fine would save US$338 billion, the non-partisan Congressional Budget Office (CBO) projected, money that could help pay for tax reform. But the CBO also projected it would raise health insurance costs by 10 per cent, and lead to 13 million fewer people with coverage over the next decade.

Top Senate Democrat Chuck Schumer said such cost increases could "more than wipe out" the tax cuts seen by middle-class families.

A handful of Senate Republicans could make or break the legislation.

They include Mr John McCain, Ms Susan Collins and Ms Lisa Murkowski, who together sank Mr Trump's Obamacare repeal effort this summer.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on November 18, 2017, with the headline 'Trump tax overhaul adopted by House'. Print Edition | Subscribe