The Senate will vote Thursday on a bipartisan House-passed bill that would renew a handful of expired business tax breaks and expand the child tax credit to more low-income families, but it is expected to fail.
The test vote comes on the last day the Senate is scheduled to be in session before it departs for a monthlong summer recess. Republicans say it’s being set up as another “show vote” that Democrats know they do not have enough bipartisan support to meet the Senate’s 60-vote threshold to advance.
“This is not about a policy outcome. It’s about a political outcome,” Sen. Steve Daines, Montana Republican, said.
However, the tax bill is different from prior show votes this summer on reproductive rights that largely fell along party lines because it already passed the Republican-controlled House and has supporters and opponents in both parties.
The bill originated as a bipartisan compromise negotiated between Senate Finance Committee Chairman Ron Wyden, Oregon Democrat, and House Ways and Means Chairman Jason Smith, Missouri Republican.
The measure would renew expired business tax breaks that allow more generous write-offs for research and development, assets that lose value over time and interest expenses.
It would also expand the child tax credit to more low-income families by making the full $2,000 credit available to families that do not have a tax liability as a refund and allow them to claim the maximum credit for each child instead of just one.
Both the business and child tax breaks would be retroactively renewed to cover the 2023 tax year and sunset at the end of 2025 when trillions of dollars worth of tax cuts from the 2017 tax law Republicans passed under former President Donald Trump are also set to expire.
The House passed the bill in late January in an overwhelming 357-70 bipartisan vote.
Senate Republicans, however, have largely objected to the bill for months amid a myriad of concerns. Many oppose the design of the child tax credit expansion and worry that giving any ground to Democrats on that now takes away a key piece of leverage they may need to negotiate a deal on extending the Trump tax cuts next year.
Senate Majority Leader Charles E. Schumer said Senate Republicans are the only ones standing in the way of the bill becoming law.
“Everyone else – even House Republicans, hardly known for their moderation – support this tax bill,” the New York Democrat said.
Given that Mr. Schumer sat on the bill for six months after the House passed it, Senate Republicans say Thursday’s vote is not a serious attempt at legislating.
“This is something they’ve designed to be able to put out, to be able to have as a messaging piece for his senators in August to travel around and say, ’Hey, I would save you money, but those Republicans don’t want to send everybody money in the mail,’ and that’s really what it is,” Sen. James Lankford, Oklahoma Republican, told The Washington Times.
Mr. Lankford also took issue with the bill applying the tax breaks to the 2023 year that has long passed, calling it retroactive tax breaks “on steroids.”
Some Republicans argued they might have supported the bill if they had more time to make changes, like tweaking portions of the child tax credit.
Sen. Cynthia Lummis, Wyoming Republican, said there had been negotiations on the “look-back” provision of the child tax credit, which would allow taxpayers to use their previous year’s income if it yielded a larger child tax credit than the income for the year in which they’re filing.
Senate Finance ranking member Mike Crapo of Idaho and other Republicans argued the look-back provision would weaken incentives to work.
Mr. Wyden said he provided a “huge compromise offer” for the child tax credit that Republicans ignored.
“They’re putting it off because they believe they’re going to be in power in 2025,” he said. “And if that’s the case, they can give even more breaks to their friends and there will be crumbs for kids and families.”
Indeed, Ms. Lummis concluded that voting on the limited tax deal is unwise since lawmakers will need to take a broader look at the tax code next year when many of the Trump tax cuts expire.
“Taking a time-limited slice of that pie out of the pie before we consider the ramifications of the whole pie is, I think, premature,” Ms. Lummis said. “I think it’s a mistake.”
Not every Senate Republican is voting against the tax bill.
Sen. Josh Hawley, Missouri Republican, said while the bill isn’t quite what he would have written, he will vote for it, largely because of the beefed-up child tax credit.
Sen. Markwayne Mullin, Oklahoma Republican, is also reportedly supporting the bill, while Sen. Todd Young, Indiana Republican, is waffling because he supports the policy but opposes Mr. Schumer using it to score political points.
“Substantively, I’m not undecided. It’s clear where I am,” Mr. Young said. “But the question is, do I want my vote to be perceived as something it’s not.”
While the bill is likely doomed on Thursday, Mr. Hawley argued that it could have passed if Mr. Schumer acted sooner and been more amenable to addressing GOP concerns.
“You could have adjusted a few things to meet Republican concerns and gotten 60 — and they didn’t want to do that,” Mr. Hawley said. “It is a show vote. And I think that’s too bad because I think we could have made some policy here.”
Unlike other Senate messaging votes this summer on reproductive health issues where Democrats have been united, the tax bill is likely to draw some opposition from progressives who think it benefits corporations more than working families.
“I am really frustrated about the tax bill,” Sen. Elizabeth Warren, Massachusetts Democrat, said. “The Republicans have said the terms on which they’re willing to help children is only if every dollar that goes to kids has to be matched by at least $3 for corporations. Those are not our values, and those are not the folks who need help.”
Ms. Warren would not say whether she plans to oppose the bill, nor would Sen. Bernard Sanders, Vermont independent, who expressed similar concerns.
“At a time when we have massive income and wealth inequality, when corporations are enjoying record-breaking profits and when many of them are paying virtually nothing in taxes, do I have concerns that this gives massive tax breaks to very large corporations? Yes, I do,” Mr. Sanders told The Times.
• Lindsey McPherson can be reached at lmcpherson@washingtontimes.com.
• Alex Miller can be reached at amiller@washingtontimes.com.
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