Cost of tax reform bill could reach more than $2 trillion

By Allen Cone  |  Updated Dec. 18, 2017 at 10:17 PM
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Dec. 18 (UPI) -- The cost of the proposed Republican tax reform bill could exceed $2 trillion if temporary tax cuts are eventually made permanent, an analysis indicates.

A report by the Committee for a Responsible Federal Budget stated if future Congresses vote to extend temporary provisions of the bill -- including lower tax rates for individuals and families -- instead of letting them expire, the bill will ultimately cost between $2 trillion and $2.2 trillion.

"If expiring provisions are extended and late-stage tax hikes avoided, debt could reach as high as 98 percent or 100 percent of GDP by 2027," the group said. "In other words, the national debt could exceed the size of the economy."

The Tax Foundation issued a separate report stating the tax bill would cost $2.7 trillion on a static basis and $1.4 trillion using "dynamic" scoring that accounts for growth.

"This change would increase the cost of the plan, but also increase the economic growth and dynamic revenue generated by the plan," the Tax Foundation said.

The Republican-led House and Senate plan to vote on tax reform and government funding this week, before the holiday break.

Both chambers had planned to enter their recess last week but delayed the break to vote on the two key financial issues.

The rewrite of the tax code was finalized Friday with no changes now allowed in the 400-page bill. In the Senate, the Republicans, who temporarily have a 52-48 advantage, appear to have the votes to pass the tax legislation without any Democratic support. Sen. Bob Corker of Tennessee, the only Republican who voted against the Senate version, and Marco Rubio of Florida committed to voting "yes" on Friday.

Rubio changed from a "no" after the refundable portion of the child tax credit was increased. Corker changed his stance after being concerned about the impact on the federal deficit.

Sen. Bob Corker, R-Tenn., sent a letter to Senate Finance Committee Chairman Orrin Hatch, R-Utah, seeking clarity on how a a provision on pass-through businesses that would reportedly give real estate investors a large tax break made its way into the bill.

"My understanding from talking to leadership staff today is that a version of this provision was always in the House bill -- from the Ways & Means markup, through House floor consideration -- and in reconciling the divergent House and Senate approaches to pass-through businesses this House approach stayed in the final conferenced version," he said.

Corker announced he would back the plan on Friday and his office noted he was not involved in the writing of the legislation and was not a member of the conference committee that crafted it.

"Because this issue has raised concerns, I would ask that that you provide an explanation of the evolution of this provision and how it made it into the final conference report. I think that because of many sensitivities, clarity on this issue is very important and hope that you will respond in an expeditious manner," he said.

Sen. John McCain won't be back in Washington because he's in Arizona recovering from chemotherapy to treat brain cancer. Sen. Thad Cochran of Mississippi, also a Republican, was absent last week with illness.

House Speaker Paul Ryan announced during a conference call Friday night with his members that the House will vote Tuesday before the Senate.

Both chambers have approved the first major tax overhaul since 1986, which includes new tax rates for individuals and corporations and is projected to add $1 trillion to the debt over the next decade. Members of the House and Senate have met to reconcile the two bills' differences.

President Donald Trump has said he wants to sign the bill to give "the American people a giant tax cut for Christmas."

"We'll have very little Democrat support, probably none, and that's purely for political reasons," he said Wednesday. "They like it a lot, and they can't say it."

Democrats have criticized the rush to pass the bill and want newly elected Alabama Sen. Doug Jones to be sworn in before the vote. He defeated Republican Roy Moore in last week's special election in Alabama.

Both chambers hope to pass the tax bill before tackling government funding.

On Dec. 7, Congress passed a short-term funding bill that expires Friday.

Last Wednesday, House Republicans introduced legislation to fund most of the government through mid-January and the Defense Department through the end of the 2018 fiscal year.

But unlike the House, the Senate needs more than a majority and instead 60 votes to approve the spending bill.

Senate Minority Leader Charles Schumer of New York said 44 of the Democratic caucus' 48 members have indicated they won't support it. Democrats want any increased spending on defense spending to match funding for non-defense matters.

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