The $79 billion tax bill the House passed by an overwhelming margin this week is likely to face a speed bump in the Senate, as Republicans vow to slow down the process and make changes to the package.
Senate Finance Chair Ron Wyden, D-Ore., who negotiated the family and business tax break deal with House Ways and Means Chairman Jason Smith, R-Mo., is pushing for the Senate to move quickly on the bill, given its potential implications for tax filing season. The House voted 357-70 to pass the bill Wednesday evening.
“I’m gonna do everything I can to get this done quickly and get a presidential signature on it,” Wyden said.
But Republicans insist they want changes to the bill and are willing to block it from going to the floor if Democrats try to speed up the process. The Senate is back next week, but then leaves for a two-week recess, returning to the Capitol on Feb. 26.
“We should not just swallow hook, line and sinker what the House passed,” said Sen. John Cornyn, R-Texas. “I’m going to oppose it until it goes through the Finance Committee. I may be a speed bump, but I’m probably not alone.”
The package would devote about $33 billion to reviving a trio of business tax breaks, including full, upfront deductions of research and development investments. It would devote roughly the same amount to expanding the child tax credit with the most significant gains going to families with more than one kid. The rest would go toward boosting affordable housing construction credits, ending double-taxation of U.S. companies operating in Taiwan and providing tax relief to disaster victims.
Cornyn said he would oppose cloture on the bill if Majority Leader Charles E. Schumer of New York tries to bring it to the floor without first reaching an amendment agreement with Republicans.
“It’s not our fault they waited this long to do it, so I don’t feel any pressure to try to wave it on through,” Cornyn said.
Sen. Steve Daines, R-Mont., said he wasn’t swayed by the outcome in the House.
“Last time I checked, there’s two chambers,” he said. “I think we’re going to need to see some changes on it. I think it’s pretty clear from Republican senators that it’s not ready yet.”
‘A political year’
Still, the 357-70 vote in the House prompted some Senate Republicans to give the package a second look.
“You’ll see some Republicans more receptive to the package than they otherwise would be,” Sen. Todd Young, R-Ind., said of the House vote. Young added that he shared some of his colleagues’ concerns about the bill, but would support it on the floor.
“In the end, I think it’s really important that we support the legislation because I think the merits outweigh the demerits,” he said.
Sen. Kevin Cramer, R-N.D., said he was open to supporting it, but needed to take a closer look.
“If Jason Smith and Ron Wyden can agree on something to this degree that’s this complicated, I start with the notion that it’s certainly serious and worth taking a look,” he said, noting that he liked the business provisions, even if the child tax credit expansion is too generous in his eyes.
“Perfect can’t be the enemy of good,” he said. “When there’s enough for everybody to like most of it, and enough for at least several to not like parts of it, it looks like a bipartisan bill.”
There will always be a group of senators who want to see a lot of changes to the package and still vote against it in the end, Cramer added.
“I think some of us get a little bit tired of that,” he said. “And it’s a political year in case you missed it. I’ll leave it at that.”
Republicans have objected to the expansion of the child tax credit, with some zeroing in on a provision that they say would weaken work requirements by allowing families to use the previous year’s income to qualify. Others painted it as an expansion of an entitlement program that America can ill afford.
“The reality is that money spent on child credit is going to be permanent. No one’s going to get rid of it,” Sen. Mitt Romney, R-Utah, said. “Once it gets put in place, it’s going to end up being another hugely expensive entitlement program, which simply doesn’t make sense.”
Some Republicans have also called into question the validity of provisions intended to offset the bill’s price tag. The bill would cover its costs by bringing an early end to the fraud-ridden employee retention credit put in place during the pandemic.
“We should get rid of that by itself,” Romney said of the program. “A temporary offset is phony baloney.”