US Senate Pushes Ahead On Trump Tax Cuts As Non-partisan Analysis Raises Price Tag

Senate Republicans pushed forward President Donald Trump's sweeping tax cut and spending bill on Sunday in a marathon weekend session even as a non-partisan forecaster said it would add an estimated US$3.3 trillion to the nation's debt over a decade.

The estimate by the Congressional Budget Office (CBO) of the bill's hit to the US$36.2 trillion federal debt is about US$800 billion more than the version passed last month in the House of Representatives.

Republicans, who have long voiced concern about growing US deficits and debt, have rejected the CBO's long-standing methodology to calculate the cost of legislation.

Democrats, meanwhile, hope the latest, eye-widening figure could stoke enough anxiety among fiscally-minded conservatives to get them to buck their party, which controls both chambers of Congress.

“Republicans are doing something the Senate has never, never done before, deploying fake math and accounting gimmicks to hide the true cost of the bill," Democratic Senate Minority Leader Chuck Schumer said as debate opened on Sunday. "Republicans are about to pass the single most expensive bill in US history, to give tax breaks to billionaires while taking away Medicaid, SNAP benefits and good paying jobs for millions of people."

The Senate only narrowly advanced the tax-cut, immigration, border and military spending bill in a procedural vote late on Saturday, voting 51-49 to open debate on the 940-page megabill.

Trump on social media hailed Saturday's vote as a "great victory" for his "great, big, beautiful bill". In a separate post on Sunday, he said: "We will make it all up, times 10, with growth, more than ever before."

In an illustration of the depths of the divide within the Republican Party over the bill, Senator Thom Tillis said he would not seek re-election next year, after Trump threatened to back a primary challenger in retribution for Tillis' Saturday night vote against the bill.

On Sunday, Trump celebrated Tillis' announcement as "great news!" on Truth Social and issued a warning to fellow Republicans who have concerns over the bill. "Remember, you still have to get re-elected. Don’t go too crazy!" Trump wrote in a post.

Tillis' North Carolina seat is one of the few Republican Senate seats seen as vulnerable in next year's midterm elections. He was one of just two Republicans to vote no on Saturday.

Trump wants the bill passed before the July 4 Independence Day holiday. While that deadline is one of choice, lawmakers will face a far more serious deadline later this summer when they must raise the nation's self-imposed debt ceiling or risk a devastating default on US$36.2 trillion in debt.

“We are going to make sure hardworking people can keep more of their money,” Senator Katie Britt, an Alabama Republican, told CNN’s State of the Union on Sunday.

Hits to benefits

Senator Mark Warner, a Democrat from Virginia, said this legislation would come to haunt Republicans if it gets approved, predicting 16 million Americans would lose their health insurance.

"Many of my Republican friends know...they're walking the plank on this and we'll see if those who've expressed quiet consternation will actually have the courage of their convictions," Warner told CBS News' "Face the Nation with Margaret Brennan."

The legislation has been the sole focus of a marathon weekend congressional session marked by political drama, division and lengthy delays as Democrats seek to slow the legislation's path to passage.

Schumer called for the entire text of the bill to be read on the Senate floor, a process that began before midnight Saturday and ran well into Sunday afternoon. Following up to 20 hours of debate on the legislation, the Senate will enter an amendment session, known as a "vote-a-rama", before voting on passage. Lawmakers said they hoped to complete work on the bill on Monday.

Senator Rand Paul of Kentucky, the other Republican "no" vote, opposed the legislation because it would raise the federal borrowing limit by an additional US$5 trillion.

The megabill would extend the 2017 tax cuts that were Trump's main legislative achievement during his first term as president, cut other taxes and boost spending on the military and border security.

Representative Michael McCaul, however, warned that fellow Republicans who do not back Trump on the bill could face payback from voters.

"They know that their jobs are at risk. Not just from the president, but from the voting, the American people. Our base back home will not reelect us to office if we vote no on this," McCaul also told CBS News.

Senate Republicans, who reject the CBO's estimates on the cost of the legislation, are set on using an alternative calculation method that does not factor in costs from extending the 2017 tax cuts. Outside tax experts, like Andrew Lautz from the non-partisan think tank Bipartisan Policy Center, call it a "magic trick".

Using this calculation method, the Senate Republicans’ budget bill appears to cost substantially less and seems to save US$500 billion, according to the BPC analysis.

If the Senate passes the bill, it will then return to the House of Representatives for final passage before Trump can sign it into law. The House passed its version of the bill last month.

Source: Theedgemarkets