A day after suffering a stinging setback in a crucial Senate contest, President Donald Trump appears to be bouncing back with a Republican deal in Congress that could help him deliver on his campaign promise of ushering in the biggest tax cuts in decades to stimulate growth and job creation.
At Trump’s bidding, Republican negotiators, who have been working overtime to reconcile the differing versions of the Tax Cuts and Jobs Act that had been passed by the Senate and the House of Representatives in recent weeks, disclosed on Wednesday that they have reached a deal.
“We want to give you, the American people, a giant tax cut for Christmas. And when I say giant, I mean giant,” Trump announced soon thereafter, adding that if only the Congress approves the reconciled Bill and sends it over to him Christmas, Americans will start seeing bigger paycheques from February.
If the measure goes through without any unexpected glitch, given that each chamber will have to vote again on the reconciled Bill, it will be the first major legislative victory for Trump. His earlier push to repeal and replace Obamacare had flopped with some Republican Senators voting against it.
While the measure is expected to sail through the House, where Republicans have a comfortable majority, it is the Senate where party bosses have to ensure that there no surprises are sprung. Republicans have a bare majority in the Senate (52-48), which is now down to 51-49 after the loss of the Alabama seat on Tuesday, albeit this will take effect only from January.
The agreement reached between the Senate and House Republicans will help deliver “more jobs, higher wages, and massive tax relief for American families and for American companies,” Trump said in a White House address in the course of which specially-invited representatives of middle class American families were asked to speak.
The new tax package will reduce the number of tax brackets, lower taxes at all levels, double the standard deduction and expand child credit, besides slashing the corporate tax rate from 35 per cent to 21 per cent – a move which has been touted as a big push to expand growth and job creation.
Democrats have all along sought to deride the Republican tax package as pro-rich. The package does bring down the tax rate for the wealthy class as well, lowering the top individual tax rate to 37 per cent from the present 39.6 per cent. But Trump sought to highlight the middle class tax reductions. A typical family of four earning $75,000 a year will see a tax cut of more than $2,000, he said.
Trump sought to repeatedly assert that with the big cut in corporate tax, American jobs that had been “exported” over the years will start coming back.