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In Critical Test Of Tax Reform Bill, Senate Narrowly Approves Motion To Start Debate With 52-48 Vote

Courtesy of ZeroHedge. View original post here.

Update (5:55PM EST): After a full day of debating the GOP tax reform bill, the Senate has now approved a motion to…drum roll please…debate the GOP tax reform bill.  As we detailed below, this was the first big test for the GOP's tax bill before the entire Senate and it narrowly passed with a vote of 52-48.  No Democrats voted in favor of the procedural motion to begin debate and all Republicans towed the party line.

Of course, the GOP's efforts to repeal and replace Obamacare also managed to survive this very same procedural vote earlier this year only to be killed at the last minute by John McCain. Which begs the question of whether the current tax reform bill will finally hand the Trump administration its first legislative victory or if it will meet the same fate as the numerous healthcare failures that preceded it…we should know later this week when the Senate is expected to vote on the legislation.

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Update (3:15PM EST): Senator Lisa Murkowski (R-AK), who was a key swing vote against several Obamacare repeal and replace bills earlier this year, has confirmed that she will vote in favor of the Senate's tax bill.

Alaska's Sen. @lisamurkowski will vote YES on the GOP tax bill, her office tells me.

— Garrett Haake (@GarrettHaake) November 29, 2017

Meanwhile, an earlier holdout on the procedural vote expected to be held within the next couple of hours, Senator Steve Daines (R-MT), has just confirmed that he's now a 'yes'…at least for the motion to proceed to debate.

[1/2] There has been some good progress for Main Street businesses in the tax cut bill. I was able to secure more than 60 billion in tax cuts for Main Street businesses. These Main Street businesses will be able to provide more jobs and higher wages in Montana and across the

— Steve Daines (@SteveDaines) November 29, 2017

[2/2] country. I've seen enough progress to vote yes to move the debate forward.

— Steve Daines (@SteveDaines) November 29, 2017

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Update (2:45PM EST): Although no official time has been provided, according to The Hill, Senator Tom Tillis (R-NC), who presided over the Senate floor during lunch, said he expected a vote on the tax bill in the 4 – 5pm EST timeframe.

Meanwhile, Senator Susan Collins (R-ME) has just confirmed she will support the procedural vote for tax reform today but is still on the fence regarding her final support of the legislation.



* * *

Just yesterday a 12-11 party-line vote in favor of the tax reform bill by the Senate budget committee allowed Mitch McConnell to breathe a temporary sigh of relief after earlier objections by GOP members left many wondering whether the bill would even make it out of committee. 

Now, the controversial legislation is set for its first key test before the entire Senate after McConnell just confirmed that a crucial procedural vote intended to allow debate on the bill has been scheduled for later this afternoon.

As expected, McConnell says the Senate will vote later today on the Motion to Proceed to the GOP tax reform bill.

— Frank Thorp V (@frankthorp) November 29, 2017

Of course, the bill will need at least 50 votes to pass, with Vice President Mike Pence breaking a potential tie; Republicans hold 52 seats in the chamber, and no Democrats are expected to support the bill.

As the Wall Street Journal notes, key, last-minute modifications to the bill that allow for tax increases in the event of deeper deficits managed to attract the support of several key Senators who had previously been on the fence.

One group of senators that were on the fence and now appear set to support the bill are lawmakers concerned about the federal deficit. Led by Sens. Bob Corker (R., Tenn.), James Lankford (R., Okla.) and Jeff Flake (R., Ariz.), the group has been working on a plan to trigger automatic tax increases if the tax cuts lead to deeper deficits. By Wednesday, the deficit hawks sounded optimistic and said the details of a deal were closer to being worked out.

New details about the design of the fallback plan could mitigate some concerns. Republicans briefed on the plan said that it could be designed in a way to keep the backup plan from activating in the event of an economic recession. For it to work, the government would have to distinguish between a slowdown in tax revenue caused by tax cuts and a slowdown that is a normal feature of the economic cycle.

“We’re writing in a protection from recession so that way if there is a recession, the trigger turns off,” Mr. Lankford said on CBS. “The second part of that is if we do this large tax cut and we broaden the base of what’s happening economically, we better not have a recession at that point. This should actually charge up the economy.”

Meanwhile, Trump seemed confident yesterday after describing a GOP meeting on the legislation as "somewhat of a lovefest."

Trump calls today's meeting with Republican senators "very special" and "somewhat of a lovefest"

— Aaron Rupar (@atrupar) November 28, 2017

Of course, not all Republicans are onboard with the "lovefest" just yet at Senator Steve Daines (R-MT) still has some reservations over the treatment of pass-through income and Senators Mike Lee (R-UT) and Marco Rubio (R-FL) would like a slightly higher corporate tax rate to help fund a larger child tax credit for low-income families.

Still, not every Republican is ready to vote yes. Sen. Steve Daines (R., Mont.), who is concerned about the treatment of partnerships and other “pass-through” entities whose earnings pass through to individual owners’ tax forms, said that he wasn’t quite ready to cast a vote to allow the tax debate to begin.

Separately, Republicans were planning to try to make more changes to the tax bill by offering amendments later this week.

Sens. Mike Lee (R., Utah) and Marco Rubio (R., Fla.) are proposing an amendment to the tax bill that would increase the child tax credit for low-income families and pay for it by setting the corporate tax rate at 22%, instead of 20%.

That amendment would make the child tax credit fully refundable against payroll taxes and index the tax credit to inflation. Refundable tax credits go to households that don’t pay income taxes.

Passage of this key procedural vote today could setup the Senate to pass whatever modified version of the bill comes out of debate by Thursday or Friday of this week.

We will provide updates on this crucial procedural vote as they develop throughout the day.

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