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The Journal Gazette

  • Associated Press House Minority Leader Nancy Pelosi, D-Calif., and Rep. Richard Neal, D-Mass., the ranking member of the Ways and Means Committee, hold a news conference to dispute Republican claims about their tax reform bill.

Saturday, November 04, 2017 1:00 am

House Republicans revise tax overhaul

GOP reduces many of the cuts in original bill

Associated Press

Also: School choice accounts in bill

WASHINGTON – Education Secretary Betsy DeVos' school-choice agenda is getting a bit of a boost from the Republican tax bill, which would allow parents to use education savings accounts to pay tuition at private elementary and secondary schools.

Expanding school choice – access to charter, private and other options besides neighborhood schools – has been a priority of the Trump administration and DeVos, who has spent decades working on that front in her home state of Michigan. But nine months into her tenure, DeVos has yet to come forward with a major school choice initiative, which her supporters have been hoping for and her critics have feared. The tax proposal, unveiled Thursday, stops significantly short of the $20 billion school-choice project that President Donald Trump promised on the campaign trail.

WASHINGTON – House Republicans on Friday quietly made changes to their far-reaching tax overhaul: Now its tax cuts would be less generous for many Americans.

A day after the GOP unveiled its plan promising middle-class relief, the House's top tax-writer, Rep. Kevin Brady, released a revised version of the bill that would impose a new, lower-inflation “chained CPI” adjustment for tax brackets immediately instead of in 2023. That means more income would be taxed at higher rates over time – and less generous tax cuts for individuals and families.

The change, posted on the website of the Ways and Means Committee, reduces the value of the tax cuts for ordinary Americans by $89 billion over 10 years compared with the legislation released with fanfare Thursday.

As wages rise, middle-class taxpayers would have more of their income taxed at the 25 percent rate instead of at 12 percent, for instance.

The change to the plan frees up money for Brady, R-Texas, the committee's chairman, to use to address concerns by lawmakers when changing the bill further next week. The Ways and Means panel begins work Monday, a final bill-writing process expected to take four days.

Brady on Friday called it “a challenge of a lifetime legislatively.”

President Donald Trump and the Republicans are driving to push through a major tax-cutting bill this year to secure a legislative accomplishment, following their stinging failure to overturn and replace the Obama health care law.

Trump is pressuring Republicans to repeal a health care law penalty in the tax rewrite, a step that Brady indicated is politically problematic.

Brady said Friday the president had spoken to him twice by phone and once in person, imploring him to scrap the individual mandate that requires Americans to obtain health insurance or face a penalty.

“The president feels quite strongly about including this at some step,” Brady said in an interview with Politico.

The Congressional Budget Office has estimated that repealing the individual mandate would save $416 billion over a decade. That's because without it, fewer people would enroll in Medicaid or buy federally subsidized coverage on insurance exchanges. The money represents a tempting revenue source for GOP tax writers whose plan for extensive tax cuts would add an estimated $1.5 trillion to the nation's debt over 10 years.

But Brady pointed out the Senate has been unable to muster enough votes for any health care legislation. “There are pros and cons to this. Importing health care into a tax reform debate does have consequences,” he said.

And Rep. Tom Cole, R-Okla., said, “I think the attitude is let's not mix up health care with this.”