Congress approves Trump’s sweeping tax-cut and spending bill

Washington — President Donald Trump’s tax-cut package cleared its final hurdle in the US Congress on Thursday, as the Republican-controlled House of Representatives narrowly approved the huge bill and sent it to him to sign into law.

The 218-214 vote amounts to a significant victory for the Republican president that will fund his immigration crackdown, make his 2017 tax cuts permanent and deliver new tax breaks that he promised during his 2024 campaign.

It also cuts health and food safety net programmes and zeroes out dozens of green energy incentives. It would add $3.4-trillion to the nation's $36.2-trillion debt, according to the non-partisan Congressional Budget Office.

Despite concerns over the 869-page bill’s price tag and its hit to healthcare programmes, Republicans largely lined up in support, with only two of the House’s 220 Republicans voting against it. The bill has already cleared the Republican-controlled Senate by the narrowest possible margin.

Republicans said the legislation will lower taxes for Americans across the income spectrum and spur economic growth.

Republican representative Virginia Foxx of North Carolina described the bill as bringing “Historic tax relief for working families. Massive investment to secure our nation’s borders. Capturing generational savings. Slashing waste, fraud and abuse in government programmes so that they may run more efficiently.”

Every Democrat in Congress voted against it, blasting the bill as a giveaway to the wealthy that would leave millions uninsured. “The focus of this bill, the justification for all of the cuts that will hurt everyday Americans, is to provide huge tax breaks for billionaires,” House Democratic leader Hakeem Jeffries said in an eight-hour, 46-minute speech that was the longest in the chamber’s history.

Trump kept up the pressure throughout, cajoling and threatening legislators as he pressed them to send him the legislation by the July 4 Independence Day holiday. “For Republicans, this should be an easy yes vote. Ridiculous!!!” he wrote on social media.

Republicans raced to meet that deadline, working through last weekend and holding all-night debates in the House and the Senate. The bill passed the Senate on Tuesday in 51-50 vote in that saw vice-president JD Vance cast the tiebreaking vote.

According to the CBO, the bill would lower tax revenues by $4.5-trillion over 10 years and cut spending by $1.1-trillion.

Those spending cuts largely come from Medicaid, the health programme that covers 71-million low-income Americans.

The bill would tighten enrolment standards, institute a work requirement and clamp down on a funding mechanism used by states to boost federal payments — changes that would leave nearly 12-million people uninsured, according to the CBO.

Republicans added $50-billion for rural health providers to address concerns that those cutbacks would force them out of business.

Non-partisan analysts have found that the wealthiest Americans would see the biggest benefits from the bill, while lower-income people would effectively see their incomes drop as the safety-net cuts would outweigh their tax cuts.

The increased debt load created by the bill would also effectively transfer money from younger to older generations, analysts say. Ratings firm Moody’s downgraded US debt in May, citing the mounting debt, and some foreign investors say the bill is making US Treasury bonds less attractive.

On the other side of the ledger, the bill staves off tax increases that were due to hit most Americans at the end of this year, when Trump’s 2017 individual and business tax cuts were due to expire. Those cuts are now made permanent, while tax breaks for parents and businesses are expanded.

The bill also sets up new tax breaks for tipped income, overtime pay, seniors and auto loans, fulfilling Trump campaign promises.

The final version of the bill includes more substantial tax cuts and more aggressive healthcare cuts than an initial version that passed the House in May.

During deliberations in the Senate, Republicans also dropped a provision that would have banned state-level regulations on artificial intelligence, and a “retaliatory tax” on foreign investment that had spurred alarm on Wall Street.

Reuters