GOP blocks Dem efforts to boost tax benefits for parents
House Republicans on Tuesday blocked Democratic efforts to secure bigger tax benefits for parents' costs of raising or adopting children, as they drove toward wrapping up their tax overhaul by week's end.
The daylong debate by the Ways and Means Committee came as the Senate's tax bill started to take shape. That version is expected to completely repeal the federal deduction for state and local taxes, a flashpoint of contention for Republican lawmakers from high-tax states like New York and New Jersey, as well as Democrats. Concessions were made in the House bill with a partial repeal.
The Senate measure also would retain the medical expense deduction, which the House plan eliminates. And the Senate would retain today's seven personal income tax brackets, not collapse them into four like the House bill.
Republicans hope to get Democratic support for their politically necessary legislation, and President Donald Trump's top economic adviser Gary Cohn met with Senate Democrats on Tuesday as Trump phoned in from his Asia trip.
Democrats weren't buying Trump's argument that the emerging GOP tax bill is "terrible for rich people." Ohio Democrat Sen. Sherrod Brown said Trump made that claim during the call.
But Brown said the Democrats adamantly disagree, telling reporters, "This bill is clearly overwhelmingly serving the rich." Brown said Trump likes Democratic ideas such as boosting the earned income and child tax credits for working families, but GOP leaders don't seem interested in them.
The House tax-writing panel voted 23-16 along party lines to reject Democratic amendments affecting parents. In its second marathon day of amendments and votes on the sweeping, nearly $6 trillion bill, the committee also rolled over other Democratic proposals, including one that would have forced businesses to suffer the same loss of the deduction for state and local taxes as individuals.
The GOP plan calls for repealing the adoption tax credit, a move roundly condemned by Democrats. One of the defeated Democratic proposals would have restored the adoption credit and allowed it to be fully refundable.
The proposal's sponsor, Rep. Danny Davis, D-Ill., said its aim was "so that more families can benefit and more waiting children can be adopted."
Davis said that In 2014, more than 73,000 U.S. households claimed the adoption tax credit, with an average value of $4,802. However, he added, nearly 60 percent of the credit went to families with annual incomes over $100,000.
The GOP plan also includes an increase in the child tax credit, to $1,600 from $1,000 per child. The amendment by Rep. Linda Sanchez, D-Calif., that was defeated would have added a $3,600 credit for families with children under age 6.
Trump and the Republicans need to show the tax bill — it would be the first major revamp of the tax code in 30 years — as a solid legislative accomplishment after a year of failure. At least one House Republican was blunt about the pressure from campaign-money donors to produce. "My donors are basically saying get it done or don't ever call me again," Rep. Chris Collins. R-N.Y., told reporters.
Collins' comments prompted a pointed retort from a fellow New Yorker, Democratic Rep. Joe Crowley.
"We know who's watching, we know who you're all catering to today," Crowley lectured Republicans on the Ways and Means panel.
Numerous issues were in play, including the precise levels for a mortgage interest deduction and whether the legislation would serve as a vehicle to repeal the "Obamacare" requirement for nearly all Americans to carry health insurance. A repeal would raise more than $400 billion to help pay for the tax measure, because the government would no longer be paying as much in Medicaid and Affordable Care Act tax credits.
Trump has called for repealing the individual mandate, but after a press conference Tuesday with congressional Republicans, Treasury Secretary Steven Mnuchin brushed aside a question about whether the president would accept a bill that didn't contain that provision.
"I'm not going to comment on that issue specifically. Again, the president wants to get a deal that will be signed," Mnuchin said. "Nothing is more important to the president's economic agenda than tax reform and tax cuts."
Republicans are working overtime to present their legislation as a boon to the middle class, citing beefed-up child tax credits and overall decreases in the tax burden across all income levels in the next several years. Democrats call it a gift to corporations and the wealthy, and point to a nonpartisan congressional analysis showing taxes would actually go up beginning in 2023 for some 38 million taxpayers, or families, making $20,000 to $40,000 a year.
The legislation would add $1.5 trillion to an already ballooning national debt. It would deliver a major tax cut to corporations and repeal the estate tax, which would benefit a tiny percentage of the wealthiest families in the country.
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Associated Press writers Andrew Taylor and Alan Fram contributed to this report.