Senate, House GOP clash over tax bill  

A bipartisan tax cut bill that passed overwhelmingly in the House is facing a buzzsaw in the Senate, where Republicans are threatening to block it.

Senate Republicans are angry that they were left out of negotiations with Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Jason Smith (R-Missouri).

The bill would make the Child Tax Credit (CTC) available to tens of thousands of immigrants paroled by the Biden administration.

They argue that most of the benefits from expanding the child tax credit would flow out in the form of cash welfare rather than tax cuts for working families, undermining welfare reforms passed in the mid-1990s. There is.

The federal deficit could increase by nearly $400 billion over the next 10 years.

“Most of the issues identified from our perspective are [child tax credit side]” said Senate Republican John Thune (S.D.). “Some of the provisions, such as separating the CTC from labor requirements, have been significantly expanded and are causing heartburn to many.”

Thune said the bill “should pass through the Finance Committee” or have a public amendment process on the floor to give Republicans a chance to make changes to the bill.

He said the bill would not get the 60 votes needed to pass on the floor if Senate Majority Leader Chuck Schumer of New York blocks Republicans from proposing and voting on amendments to the bill. .

“There needs to be a process to allow for fixes in order to tweak and fix some of the issues,” he said.

Thune warned Schumer that without corrections, “you’re not going to get a 60 on this.”

Thune’s comments poured cold water on the prospects for the Senate to swiftly pass the House bill, known as the Tax Cuts for American Families and Workers Act.

The House of Representatives passed the $78 billion tax bill by an overwhelming vote of 357-70 on Wednesday night.

Stiff opposition from Senate Republicans sets the stage for another major policy clash with House Speaker Mike Johnson (R-Louisiana). House Speaker Johnson hailed the bill as “important bipartisan legislation to restore pro-growth conservatives.”

Sen. Thom Tillis, RN.C., chairman of the Senate Finance Committee, said it was ironic that House Republicans voted in favor of a bill that would pay benefits to hundreds of thousands of immigrants on parole. He said it was true.

At the same time, he noted, House Republican leaders are threatening to tear up the Senate’s border security deal that would have cut in half the number of immigrants allowed into the country.

“I’m confident that there will be a significant number of checks sent to families with children who are in the country illegally,” he said. “Why would it lose support from House Republicans?” [is] It was just shocking. ”

Tillis argued that blocking the Senate’s border deal would “add a layer” of undocumented immigrants who would be eligible for the expanded child tax credit.

“It doesn’t make sense to me,” he said. “I don’t know why you would do it now.”

Mr. Tillis also criticized the fees negotiators used to get favorable scores from the Joint Committee on Taxation, which determined it did not substantially increase the federal debt.

“This is fake pay,” he said of a proposal to crack down on fraudulent payments of employee retention tax credits during the coronavirus era.

The Congressional Budget Office estimates that the bill would increase the federal deficit by $44.7 billion from 2024 to 2028 and $399 billion from 2024 to 2033.

Sen. Mitt Romney (R-Utah) warned of the bill’s fiscal impact.

“Over the long term, it’s very expensive. I’d rather see the child tax credit paid,” he said. “If we keep spending more and more, we’re going to get into a deeper and deeper hole and it’s going to be difficult to get out of it.”

Wyden negotiated the bill with House Republicans in the second half of 2023, but pushed back on some Republican criticism.

He argued that the language surrounding the child tax credit expansion is nearly identical to what was included in then-President Trump’s 2017 Tax Cuts and Jobs Act.

“The language here is exactly the same as the language in President Trump’s tax bill from six years ago,” he said. “Many Republicans voted yes.”

He said the bipartisan majority in favor of the bill in the House changed the face of the debate. Because it’s been a long time since there’s been a bipartisan tax bill around here.

He also pushed back against criticism of the Joint Committee on Taxation (JCT)’s estimates that the fiscal deficit would not widen significantly.

“We use the official score from the Joint Committee on Taxation. Everyone is guessing, ‘This is what it costs over 10 years.’ I said, “Come on.” This is his three-year bill,” he said, noting that his official JCT score estimates that the bill’s benefits will be split almost evenly between families and businesses.

Sen. Mike Crapo (Idaho), the top Republican on the Finance Committee who was removed from negotiations, does not support the bill, according to Senate Republican sources.

He said he knows his Republican colleagues are upset about the prospect of child tax credits being extended to paroled immigrant children, but he said he is more focused on the lack of strong work requirements. He said he was guessing.

“We have made it clear that we are concerned about watering down labor requirements,” he said.

Nor is he in favor of requiring benefits to offset the cost of business tax cuts, even though his fellow Republican critics say it’s just a gimmick.

“I don’t think pro-growth taxation should be subject to offsets. We’ve never done that,” he said.

A Senate Republican staffer told a senior aide to House Minority Leader Steve Scalise (R-Louisiana) in a meeting last week that many Senate Republicans considered the House bill “garbage,” according to a Republican aide familiar with the discussions. He reportedly told them that he was there.

The aide cited the child tax credit’s lack of work requirements, its availability to paroled immigrants, and the political boost it provides to President Biden before the election.

The aide pointed out that in 2000, then-House Speaker Nancy Pelosi (D-Calif.) blocked a stimulus bill that Republicans tried to pass to help then-President Trump’s re-election bid.

At the time, Pelosi argued that the $300 billion economic relief bill that Senate Republicans wanted to pass did not meet the needs of voters.

Some Senate Republicans believe the bill would give large companies that rely on debt financing to operate their businesses, such as Anheuser-Busch, Apple, Ford, AT&T, and Verizon, to name a few. Some have criticized it for being too lenient.

The bill would tighten limits on interest deductions, which some Republican critics say would disincentivize large companies from raising capital on the stock market.