GOP Tax-Cut Effort Enters Critical Phase in House, Senate

By Siobhan Hughes and Richard Rubin Features Dow Jones Newswires

The Republican effort to pass a $1.5 trillion tax cut and deliver President Donald Trump his first major legislative win entered a critical period Thursday, with the House and the Senate operating on parallel tracks to clear legislation over a series of hurdles.

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Passage of legislation through the House Ways and Means Committee, followed by the unveiling of a Senate alternative, will move the debate beyond fights between the GOP and Democrats and into an arena marked by differences between Republicans in each chamber.

Senate Republicans were set to release a plan that diverges from the House version, which cuts individual- and corporate-tax rates and repeals the estate tax. High-income households would get the biggest boost under the House plan, garnering 20.6% of the cut next year and almost half in 2027, according to the Joint Committee on Taxation.

The cuts would be paid for in part by the elimination of various household deductions.

Senate Republicans were leaning toward preserving medical-expense deduction and the estate tax, which the House plan eliminates, and toward striking the deduction for property taxes, which the House plan cuts to $10,000 annually. Senate Republicans may eliminate the property tax deduction altogether along with other state and local tax deductions.

"You go down the path of trying to repeal the entire state and local tax in the Senate, then that is just not going to work," said Rep. Tom Reed (R., N.Y.), who fought to preserve the property-tax deduction in the House plan, in a preview of the intraparty battles.

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The House picks up where it left off Wednesday, facing the problem of how to fill a $74 billion hole in the budget -- and beyond that, the emerging hesitation of more Republicans.

A Wall Street Journal tally has identified at least nine House Republicans who are either against the House GOP plan or undecided. House Republicans can lose only 22 GOP votes during a floor vote planned for next week if they are to pass the legislation given that no Democrats are expected to support it.

On the Senate side, White House economic adviser Gary Cohn huddled into the evening with Senate Republican aides and Sen. Rob Portman (R., Ohio) to finish the plan. Senate Finance Committee Chairman Orrin Hatch (R., Utah) left the meeting saying the tax package wasn't completed.

"We've resolved a lot of problems -- we still have a lot more to do," Mr. Hatch told reporters.

Said Mr. Cohn: "Everything is never always resolved. We're in good shape, though."

(END) Dow Jones Newswires

November 09, 2017 10:43 ET (15:43 GMT)