House tax panel adopts GOP changes after day of bickering

WASHINGTON -- After a day of partisan bickering over whether the Republicans' sweeping tax plan would help the middle class, a key House panel on Monday approved late changes.

Lawmakers restored the tax exemption for employees receiving child-care benefits from their companies but put new requirements on a tax credit used by working people of modest means.

The House Ways and Means Committee voted 24-16 along party lines to adopt the amendment from its chairman, Rep. Kevin Brady, R-Texas. The changes were made to the complex GOP tax legislation put forward Thursday.

The vote on the amendment capped a rancorous session in which Republicans and Democrats argued over the nearly $6 trillion plan. Democrats lodged objections to the bill, especially to its limits on deductions for homeowners and its repeal of the child-adoption credit and the deduction for medical expenses.

It was the first of what are expected to be several days of work on the bill, as Republicans drive to push legislation through Congress and to President Donald Trump's desk by Christmas.

Republicans focused on findings by Congress' nonpartisan Joint Committee on Taxation the bill would lower taxes across all income levels over the next several years.

"Clearly this is helping real people. It's helping teachers, it's helping students, it's helping struggling families that are living paycheck to paycheck," said GOP Rep. Erik Paulsen of Minnesota.

Democrats returned to a section of the analysis showing taxes would go up beginning in 2023 for 38 million taxpayers or families making $20,000 to $40,000 a year.

"There are a lot of people expecting a tax cut who would be big losers under this bill," said Democratic Rep. Bill Pascrell of New Jersey. "This is a joke and you've got to face up to it."

At stake is whether the GOP will succeed in passing the most sweeping rewrite of the tax code in decades, which would be a major achievement for congressional Republicans and Trump after a year largely devoid of legislative wins.

Looking ahead to 2018 midterms, Democrats and Republicans are trying to win the debate over who is truly looking out for middle-class Americans.

The legislation adds $1.5 trillion to the ballooning national debt, delivers a major tax cut to corporations, and repeals the estate tax, which would benefit a tiny percentage of the wealthiest families in the country. It also simplifies the loophole-ridden tax code by collapsing today's seven personal income tax brackets into four. It nearly doubles the standard deduction used by people who don't itemize, and it increases the child tax credit, an element championed by first daughter Ivanka Trump.

Republicans argued vociferously that the legislation is targeted toward the middle class.

"It's about making America's economy stronger than ever by delivering more jobs, fairer taxes and bigger paychecks across the nation," said Brady. He is aiming to push the legislation through committee and to the full House later this week, and GOP leaders are aiming for House passage before Thanksgiving.

The committee's top Democrat, Richard Neal of Massachusetts, countered that the bill "puts the well-connected first while forcing millions of American families to watch while their taxes go up." He complained that Republicans crafted it in private without input from Democrats.

The tax proposal is the first major rewrite of the U.S. tax code in three decades. After embarrassing failures to make good on years of promises to repeal "Obamacare," the tax bill is enthusiastically backed by Trump, House GOP leaders and many rank-and-file Republicans, who are promising a simpler IRS code, a more globally competitive business tax structure, and tax cuts for the middle class and families with children.

But there's considerable trepidation as well. In addition to the overall increases in later years for lower-income Americans, many earners in the upper-middle class, especially those from high-tax states, are facing tax increases. That's because the measure would no longer permit taxpayers to deduct state income taxes from their federal taxes.

Powerful lobbyists are fighting to protect favored deductions, while a few well-financed interest groups, including the National Association of Homebuilders, have already vowed to oppose the legislation. The homebuilders group has voiced concerns over Republicans' decision to lower the mortgage interest deduction from $1 million to $500,000.