Senate Republican holdouts warm to Trump tax plan, now

Donald Trump's sweeping tax reform plan overcame resistance Friday from Republicans concerned about its high cost, setting up a Senate vote that could give the US president his first major legislative victory.

"We have the votes," Senate Majority Leader Mitch McConnell told reporters as he entered the chamber.

If accurate, the count represents a major boost for Republicans just 24 hours after momentum to pass the tax code overhaul stalled when a handful of deficit hawks balked at the controversial plan's $1.5 trillion price tag.

After marathon overnight negotiations, the bill looked like it was on track for passage later Friday.

"We're seeing consensus," Senator Ted Cruz said.

"There's still work to be done, but we are very close and I now believe it is likely that we will pass this bill later today."

Trump, who has been more active in the legislation's navigation through Congress than he was with the Obamacare repeal bill that failed earlier this year, weighed in to encourage his party.

Republicans "are working hard to pass the biggest Tax Cuts in the history of our Country," Trump tweeted. "The Bill is getting better and better."

Trump has been desperate for a congressional win, and he has repeatedly stressed he wants the tax bill on his desk by year's end.

- Holdouts relent -

With (Other OTC: WWTH - news) tax writers still scrambling to put the final tweaks into the legislation, Cruz said efforts by some Republicans to include tax hikes in order to offset costs failed.

Senators Bob Corker and Jeff Flake, who have been critical of Trump in recent months, were concerned about the impact of the tax cuts on the country's massive deficit, and had wanted a so-called "trigger" to automatically raise taxes if revenues fall short of projections.

But late Thursday, the Senate parliamentarian said such a mechanism did not comply with budget rules.

Last-ditch negotiations then opened over how to offset the cost of dramatic tax cuts for corporations and more modest cuts for individuals.

Earlier Thursday, a nonpartisan congressional tax scorekeeper had projected that the tax overhaul would add $1 trillion to the deficit, even after accounting for expected economic growth from the plan.

The analysis complicated Trump's argument, shared by many Republicans, that the tax cuts would pay for themselves through additional economic growth.

The reforms would lower the corporate rate from 35 percent to 20 percent, and Cruz said there would be no stair-step increase in that rate, as some had sought.

Flake eventually agreed to back the legislation, after receiving assurances from the White House that action would soon be taken to shield from deportation hundreds of thousands of young immigrants who were illegally brought to the United States as children.

Lawmakers said a deal was reached to raise tax deductions for certain small businesses, a move that got two more wavering senators on board.

As an offset, the bill's tax rate for US corporations repatriating profits from abroad would rise, from 10 percent to possibly 14 percent.

"It's like the Rubik's Cube trying to fit everybody's concerns in. But I think we've ended up with a better bill," Senator Rob Portman said.

- 'Rubik's Cube' -

Republicans hold a narrow 52-48 Senate majority. With all Democrats expected to oppose the tax plan, just three Republican defectors would kill it.

Senator Susan Collins had voiced deep skepticism about the bill. But she said she managed to secure changes including on health care and local taxes, and was now in the yes camp.

That left Corker as the last Republican holdout -- but his opposition is not enough to defeat the bill.

If the legislation passes the Senate, it still must be reconciled with the recently passed House version. The plans differ on some points.

Democrats argue that the plan is too expensive and will accommodate only the rich.

Top Senate Democrat Chuck Schumer called the plan a "ticking time bomb of middle class tax hikes."

The final bill had yet to be released Friday afternoon, but Republicans were so eager to rush it through that they could vote just hours after the updated version is introduced.

"Notching a political win ... isn't a good enough reason to throw common sense and responsibility out the window," Schumer said.

Source: AFP