DONALD TRUMP HAILED a “historic” victory today as the US Congress passed a massive Republican tax cut plan, handing the president his first major legislative achievement since taking office nearly a year ago.
The House of Representatives voted along party lines to greenlight a $1.5 trillion overhaul that will impact every corner of the US economy through dramatic tax cuts for corporations and temporary reductions for individuals.
Opposition Democrats have branded the tax plan a giveaway to the wealthiest that risks blowing a hole in the national debt, but the revamp fulfills a core Trump campaign pledge to redirect money from government coffers into the pockets of working Americans.
“I promised the American people a big, beautiful tax cut for Christmas,” Trump said in a statement following the bill’s adoption.
With final passage of this legislation, that is exactly what they are getting.
The most sweeping rewrite of the US tax code in decades, the bill represents Trump’s most important legislative victory in the 11 months since his inauguration, until now marked by the stinging failure to repeal his predecessor’s health care law.
The Tax Cuts and Jobs Act also takes a major step toward crippling Obamacare, by scrapping the individual mandate that requires nearly all Americans to have health insurance or pay a fine.
“With this bill… we have essentially repealed Obamacare and we will come up with something that’s much better,” Trump declared.
With the House vote underway, Trump gathered his cabinet members for a celebratory address – that gave way to an extraordinary scene as the president invited those present to join in prayer.
Ben Carson, the secretary of housing and urban development and a fervent member of the Seventh Day Adventist Church, proceeded to say grace, thanking God for giving America Trump and his tax cut plan.
“We’re thankful for the unity in Congress that has presented an opportunity for our economy to expand so that we can fight corrosive debt that has been destroying our future,” Carson added.
Having taken months to get across the finish line, the bill was delayed at the last moment Tuesday after a technical glitch required the Senate to strip three minor provisions from the bill before approving it overnight.
Since the House had already voted – and the versions approved by both chambers must be identical – it was forced to vote again on the changes. The bill passed the House 224 to 201, with 12 Republicans siding with all Democrats in voting no.
Republican lawmakers were headed to the White House later today to celebrate with the president.
The measure tests conservatives’ fidelity to the principle of fiscal discipline, as it is projected to add nearly $1.5 trillion to the national debt over the coming decade, according to the Joint Committee on Taxation.
That figure drops to about $1 trillion when economic growth is accounted for.
Trump had leaned heavily on Republicans to push the contentious package through Congress. The party had been deeply fractured after the Obamacare repeal failure, and the prospects of success on tax reform in 2017 appeared remote.
Now, Republicans hope their success in passing tax cuts plays to the party’s advantage in next year’s mid-term elections.
But it appears unpopular: a CNN poll shows that 55% of Americans oppose the tax plan, widely criticized as favoring wealthy people over the middle class, while just 33% support it.
Republicans pushed back at that notion, with House Speaker Paul Ryan predicting that Americans would be won over once they start to reap the benefits next year.
“I think minds are going to change and I think people are going to change their view on this,” he said.
The tax bill slashes the federal corporate tax rate from 35% to 21%, and the maximum individual income tax rate, for the nation’s wealthiest, would drop from 39.6% to 37%.
It also doubles the standard deduction for families, and doubles the child tax credit, while eliminating or limiting several deductions that millions of middle-class families currently claim.
Economic ‘rocket fuel’
Ryan stated that a median-income family of four earning $73,000 annually would save $2,059 in taxes next year.
But he could not say whether the plan will generate enough economic growth to match the costs of the deficit increase.
“Nobody knows the answer to that question because that’s in the future,” Ryan told NBC.
Trump however was bullish.
“By cutting taxes and reforming the broken system, we are now pouring rocket fuel into the engine of our economy,” he said.
While Republicans celebrated, Democrats were scathing of the plan’s implications for ordinary Americans, and for a national debt that has already surged past $20 trillion.
“It is a victory for billionaires like Donald Trump… but this is a disaster for the American people,” independent Senator Bernie Sanders told CNN.
Under the law, the corporate tax cuts are permanent, while those for individuals phase out beginning in 2026. By 2027, the Tax Policy Center warns, 53% of households will see their taxes rise.