WASHINGTON — Republicans powered a $4 trillion budget through the House Oct. 26 by a razor-thin margin, a close vote underscoring the difficulties that lie ahead in delivering President Donald Trump’s promise to cut taxes. And Democratic Indian American Congressmen Ro Khanna and Raja Krishnamoorthi released statements blasting the GOP budget.
For now, Republicans sidestepped divisions within the party by voting 216-212 to permit them to begin work on a $1.5 trillion tax cut without fear of blocking tactics by Democrats.
Khanna said in a statement: “I am disappointed to see wealthy corporations put before hard-working families. I pledge to fight for the middle class with solutions like my bill, the GAIN Act, which would double the earned income tax credit for working families and increases the credit for childless workers almost sixfold.”
Krishnamoorthi similarly blasted the resolution, saying: “Today the House Republican leadership forced through a budget resolution that would blow a $1.5 trillion hole in the deficit while paving the way to a tax plan that would increase taxes on working families while making it harder for them to save for retirement.”
The tax bill is the top item on the GOP agenda and would be Trump’s first big win in Congress.
The goal is a full rewrite of the inefficient, loophole-laden tax code in hopes of lower rates for corporations and other businesses and a burst of economic growth. But evidence is growing that some of their hoped-for bold steps — such as eliminating the deduction for state and local taxes — will be replaced by half-measures dictated by politics and a narrow margin for error.
“This isn’t over,” said Rep. Tom MacArthur, R-N.J., who opposed the budget after voting for it earlier. House Speaker Paul Ryan, R-Wis., said concerns by lawmakers such as MacArthur about the deduction would be addressed in coming days, and it was the topic of a post-vote meeting that included top GOP leaders.
That timetable is ambitious as numerous details, including ways to raise revenues to help finance cuts to individual and corporate tax rates, remain unresolved. The tax plan’s popularity is not a given with voters, however, and fissures among Republicans could to slow the measure.
A battle over tax-free contributions to retirement accounts has also broken open, and Republican tax-writers have yet to lock down dozens of crucial details on tax rates and preferences. Republicans may also drop efforts to fully repeal taxes on multimillion-dollar estates, even though the idea is a longstanding feature of the party’s tax agenda.
The underlying budget measure abandons the Republican Party’s promise to rein in deficits in favor of Trump’s boast of “massive tax cuts.” The measure drops proposed cuts to mandatory programs such as food stamps, though conservatives promise to take on spending cuts later.
“I still feel strongly about addressing unsustainable mandatory spending,” said Rep. Diane Black, R-Tenn., who chairs the House Budget Committee. “I think we will tackle this important issue in the future. We don’t have a choice.”
Democrats united against the plan, arguing its tax cuts will pad the bank accounts of the wealthy and the balance sheets of corporations, while delivering modest relief — or none at all — to middle-income taxpayers.
“These tax cuts will not create an economic boom, but will instead lead to a higher concentration of wealth among the rich, while dramatically increasing deficits and debt,” said Rep. John Yarmuth, D-Ky.