Fri. May 24th, 2024

Impatience over stalled tax deal grows in Senate

Alex Thompson By Alex Thompson May11,2024

Supporters of a bipartisan tax deal that sailed through the House in January are growing impatient as the measure stalls in the Senate amid Republican opposition to the bill’s expansion of a credit for working families.

The deal, known as the Tax Relief for American Families and Workers Act, pairs an expansion of the child tax credit (CTC), which raised millions of children out of poverty during the pandemic, with established business tax breaks that were canceled to help pay for the 2017 Trump tax cuts.

Those breaks are a credit for research and development costs, an accelerated schedule for writing off depreciation costs for things like plants and equipment, and making interest payments tax deductible, which is valuable for companies that purchase assets with debt.

A cancellation of employee retention credit, which lawmakers have said is rife with fraudulent claims, would pay for nearly all of the $78 billion in tax credits included in the bill.

The deal’s business credits enjoy bipartisan support, but Republicans are sounding cagey about moving ahead on a bipartisan deal ahead of the November elections. A GOP sweep could give Republicans the power to enact another major tax bill and firm up Trump-era tax cuts set to expire in 2025.

Sen. Mike Crapo (Idaho), top Republican on the Senate Finance Committee and a key negotiator in talks, told The Hill on Tuesday that negotiations remain “at a standstill,” while accusing Democrats of “trying to just cram the bill down on the floor.”

“Look, if they succeed in cramming the bill through on the floor, then of course there’s no point to discuss negotiations,” Crapo said. “If they don’t succeed in that, then I hope negotiations will reopen.”

While a significant piece of tax legislation in its scope and design, the proposal is almost certainly more modest in scale than tax legislation that is expected out of Congress next year, when the individual provisions of the Trump tax cuts are set to expire.

Republicans largely want a blanket extension of the cuts, while Democrats likely want to amend certain provisions and do away with others.

Whatever comes out of negotiations following the 2024 election, the proposals could easily subsume the current tax deal, as the Trump tax cuts added about $1.5 trillion to the federal deficit through 2027, according to the Joint Committee on Taxation.

Senate Finance Committee Chair Ron Wyden (D-Ore.), one of the bill’s main architects, appealed to Republican senators on the fence in a Monday statement, arguing that he amended the bill in line with GOP demands on how far back the family credit should apply.

“Senator Crapo did not accept that offer,” Wyden said Monday. “The changes he asked for instead would have destroyed any chance of passing the bill and left way too many kids living in poverty. But I want the rest of the Senate to know, my offer still stands.”

“I’m here to say, this cannot wait,” he added.

A Republican aide on the Finance Committee told The Hill that Wyden and Crapo did not speak during the two-week spring recess. The aide said the senator declined to comment on Wyden’s remarks.

However, Wyden told The Hill on Tuesday that he spoke to House Ways and Means Committee Chair Jason Smith (R-Mo.), with whom he hatched the initial bipartisan tax deal, while working to advance the bill. 

“I had a long conversation with Chairman Smith last night, and we’re gonna be pulling out all the stops,” he said, adding both are reaching out to Republican senators as part of the effort. 

“He’s been very much involved. We talk constantly, and he’s been reaching out to a lot of Senate Republicans, and Senate Republicans are coming up to me and asking me questions,” he said. 

Rank-and-file Republicans so far aren’t rushing to heed Wyden’s call. Some are choosing instead to take their cue from leadership on the Finance Committee.

“I think I just have questions because of some of the provisions that Senator Crapo put forward, and I know that they’re working on it. So I just have to see right now. I’m kind of in a hold position,” Sen. Shelley Moore Capito (R-W.Va.) told The Hill last week about the bill.

Sen. Todd Young (R-Ind.), who supports the bill, said he’s been encouraged by the negotiations but has doubts about where the bill is headed.

“I don’t know if in fact they are continuing very much … but I hope they do,” he told The Hill last week.

Even Senate Republicans who are supportive of some aspects of the bill are holding out for further changes.

Sen. Josh Hawley (R-Mo.), one a handful of GOP supporters of an expanded child tax credit, took issue with the return of the research and development tax credit. He added that he would not vote for the bill unless it is amended to include a provision that reauthorizes compensation for victims of radiation exposure — the focus of a fight between him and Senate Minority Leader Mitch McConnell (R-Ky.).

“I think that’s the only way you’re going to get the thing passed,” Hawley said last Thursday. “Otherwise, I think it’s dead over here. I’ve listened to my Republican colleagues for weeks on end, and it’s a lot of negativity around that bill.”

Other key Republicans are dead set against the bill. 

Sen. Thom Tillis (R-N.C.), a member of the Finance and Banking committees, said he’s actively “trying to kill” the proposal for numerous reasons, including the retroactive expansion of the CTC and the cancellation of the employee retention credit, a key source of revenue for the bill.

“I have a problem with the pay-for, and I have a problem with the timing, because we’ve got a major cliff next year on tax extenders, and I felt like it should all be wrapped in,” he said. “We’re talking billions in this tax deal. Next year, we’re talking trillions. So, I think it needs to wait and negotiate next year.”

Tillis echoed Capito in suggesting Republican support for the bill would hinge on Crapo.

“There’s no way they [get] me [to a] ‘yes.’ They may get Crapo to ‘yes,’ if they negotiate with him. If they don’t, then I think Republicans will probably keep it from moving forward,” he said.

Democratic enthusiasm for the proposal is undiminished despite the various roadblocks the bill has encountered.

Sen. Tim Kaine (D-Va.) told The Hill he thinks the Senate should “put [it] on the floor and vote on it, just as is.”

“We’ll show some respect for the House if we take up a bipartisan bill that they [passed] by an overwhelming margin,” he said last week.

Longtime child tax credit supporter Sen. Michael Bennet (D-Colo.) said the 357-to-70 vote margin by which the bill passed the House was more than enough reason to vote on the measure in the Senate. 

“I just think that it’s very rare to have something that gets more than 350 votes in the House, and I think it’s got a lot of support in the Senate. So let’s put it on the floor and let’s see how people vote,” he said last week.

Big business is keen to have the bill move forward, as well.

“We’ve clearly reached a make-or-break moment,” Neil Bradley, chief policy officer with the U.S. Chamber of Commerce, told The Hill in an interview.  

“If we can’t get this across the finish line in the May work period, there’s little reason to believe that it’s going to get done this Congress,” he said.

Alex Thompson

By Alex Thompson

Alex is an award-winning journalist with a passion for investigative reporting. With over 15 years of experience in the field, Alex has covered a wide range of topics from politics to entertainment. Known for in-depth research and compelling storytelling, Alex's work has been featured in major news outlets around the world.

Related Post

2 thoughts on “Impatience over stalled tax deal grows in Senate”
  1. It’s frustrating to see the Senate unable to move forward on such an important bipartisan tax deal. The expansion of the child tax credit is crucial for supporting working families, and it’s disheartening to witness the delay caused by political opposition. Let’s hope for a breakthrough soon for the sake of American families.

  2. Impatience is mounting among supporters of the bipartisan tax deal as it languishes in the Senate. The expansion of the credit for working families is crucial, and it’s disheartening to witness the delay caused by opposition. Let’s hope for swift progress and benefits for American families and workers.

Leave a Reply

Your email address will not be published. Required fields are marked *