Johnson plans to bring bipartisan tax package to House floor Wednesday
The decision follows a chaotic day on Tuesday in which four New York Republicans threatened to grind the House floor to a halt over their problems with the tax package.
House Speaker Mike Johnson plans to bring a $78 billion bipartisan tax package to the House floor on Wednesday after a long night of negotiations with a small band of New York Republicans who protested the deal over its lack of state and local tax relief.
The vote would be under a suspension of the rules, which requires a two-thirds majority to pass and would therefore need strong showings from both Democrats and Republicans.
“The Tax Relief for American Families and Workers Act is important bipartisan legislation to revive conservative pro-growth tax reform,” Johnson (R-La.) said in a statement. “Crucially, the bill also ends a wasteful COVID-era program, saving taxpayers tens of billions of dollars.”
The legislation would expand the Child Tax Credit for millions of families, revive a trio of business tax breaks, provide tax relief for victims of major federal disasters and reduce tax burdens on companies operating in the U.S. and Taiwan. It would be funded by a crackdown on the Employee Retention Credit, the Covid relief program Johnson was referring to, which has been rife with fraud.
The decision puts a cap on a breathless stretch that lasted little more than 24 hours in which four New York Republicans voted “no” on House floor action to bring up unrelated legislation over their complaints that the tax deal does not include larger deductions for state and local tax relief.
After meeting with Johnson, the four GOP members reversed their votes and let floor action proceed.
The speaker then had prolonged meetings into the night with House Ways and Means Chair Jason Smith (R-Mo.) — the chief tax writer who brokered the tax deal along with Senate Finance Chair Ron Wyden (D-Ore.) — and the four New York members over how to break the impasse.
Reps. Nick LaLota, Anthony D’Esposito, Mike Lawler and Andrew Garbarino were hopeful that they could either leverage some of the state-and-local tax relief, known as SALT, in the deal or else get the speaker to allow a vote on a separate bill to expand the SALT deduction that would be considered by the chamber contemporaneously.
However, the tax package to be considered this evening by the House remains unchanged from that reported out of the Ways and Means Committee 40-3 on Jan. 19.
A House leadership aide — granted anonymity to discuss private ongoing discussions — told POLITICO that the speaker is committed to finding a resolution with the New York Republicans that could result in a SALT bill going through regular order at some point. The aide pushed back against reports that there was a final agreement to bring up one of Lawler’s bills next week.
Some Democrats have also objected that the child credit expansion is not generous enough, though their opposition isn’t expected to stand in the way of passage of the bill.
A vote of approval by a two-thirds majority in the House would send the package straight to the Senate, where its fate is uncertain.
According to attendees, Democrats had a spirited debate on the tax package at a House leadership meeting Wednesday morning, including over whether the deal gave too much away to corporations, but many Democratic moderates seem to be poised to endorse the deal.
“It remains to be seen in terms of what members will do,” said House Minority Leader Hakeem Jeffries (D-N.Y.) said after the meeting. “I plan to support the legislation, the Ways and Means Democrats clearly support the legislation, and we’ll see what happens on the floor.”
“This was a very good debate,” said House Ways and Means ranking member Richard Neal (D-Mass.). “I thought was very sincere. And I don’t think that there was a big difference over the child credit other than whether or not it can be enhanced more at this moment or not, and we made the argument on that basis.”
Minority Whip Katherine Clark (D-Mass.) said Democratic leaders weren’t whipping the vote but predicted a showing of Democratic support that mirrors the markup — where 15 Democrats voted to report the tax deal to the floor and only three voted against it.
Moderate Republicans have likewise expressed support for the deal, but some House Freedom Caucus members have expressed concerns that the child credit under current law allows undocumented immigrants with U.S.-born children to get tax refunds.
Several members are also opposed to increasing “refundability” of the credit as written under the deal, which allows low-income families to get part of the credit in the form of a check.
But the legislation’s momentum has overcome several obstacles that have threatened to derail efforts to get it to the House floor.
For instance, a resolution circulated on Monday by Rep. Tom McClintock (R-Calif.) to block the speaker from sending the deal to the floor until Johnson stripped all provisions related to the child credit — a decision that would have killed the bipartisan deal — has been retracted by McClintock, according to the lawmaker’s office.
If the House does vote on the package tonight and sends it over to the Senate, Wyden still has some convincing to do with the chamber’s Republicans.
GOP tax writers have indicated they want their own markup of the bill to potentially force amendments to the package. Finance Committee ranking member Mike Crapo (R-Idaho) told POLITICO Wednesday that he would like to remove a feature of the expanded child credit in the deal that allows parents to use income from a prior year to qualify or get more of a refundable credit.
Crapo opposes the feature out of concern it would be a disincentive to work, but progressives who want to get as much of the credit to low-income families as possible are likely to push against efforts to strip it.
Senate Majority Leader Chuck Schumer (D-N.Y.) has said he supports the legislation, and the White House has given its nod of approval to the deal.
“It’s been a long time since there’s been bipartisan tax policy,” Wyden said Wednesday. If there is a big vote in favor of the bill tonight, it could send “a very powerful message that the country’s coming together.”