Both houses of the US Congress approved a sweeping tax reform bill on Wednesday, giving President Donald Trump his first major legislative victory.
The House of Representatives by passed the bill 224-201 Wednesday afternoon, shortly after the bill passed through the Senate 51-48 along party lines. All Democrats voted against Trump's tax overhaul, which slashed the corporate tax rate from 35 percent to 21 percent. It also lowers rates for families at all income levels, but the biggest benefits go to America's wealthiest.
The corporate tax cut is permanent but all of the voters' tax cuts will fade out by 2026 to comply with Senate rules.
Read more: US tax reform breaks global rules, EU says
Vice President Mike Pence presided over the Senate Chamber in case he needed to break a tie vote. After the bill passed the Senate floor, Pence proclaimed to loud cheers that "the Tax Cuts and Jobs Act has passed."
Shortly after the Senate approved the bill, Trump took to Twitter, saying: "The United States Senate just passed the biggest in history Tax Cut and Reform Bill. Terrible Individual Mandate (ObamaCare) Repealed."
Delay in the vote
Republicans had already passed the sweeping tax reform measure in the House of Representatives on Tuesday, but were forced to send the bill back for revision after it appeared to violate Senate rules.
The offending provisions related to educational savings accounts for home schooling and private university endowments.
"In the mad dash to provide tax breaks for their billionaire campaign contributors, our Republican colleagues forgot to comply with the rules of the Senate," Democrat Senators Bernie Sanders and Ron Wyden said in a joint statement after the blunder emerged.
About an hour after the bill passed the House on Tuesday, the Senate voted along party lines to debate the legislation.
The $1.5-trillion (€1.27-trillion) package will provide steep tax cuts for businesses and the wealthy and more modest cuts for middle- and low-income families starting in January and February 2018. It revamps how the US taxes multinational companies, and introduces a new tax deduction for the owners of "pass-through" businesses, ranging from mom-and-pop stores to large real estate and financial enterprises.
President Donald Trump initially celebrated the bill's passing by the House on Twitter, congratulating House Speaker Paul Ryan along with Representatives Kevin McCarthy, Steve Scalise and Cathy McMorris Rodgers, who he called "great House Republicans who voted in favor of cutting your taxes!"
Ryan hailed the package, saying "today, we give the people of this country their money back."
The House initially voted largely along party lines: 227-203, with zero Democrats voting in favor. Pence postponed a trip to the Middle East in case he was needed to break a tie vote.
US stocks fell on Tuesday over concern about the bill's effect on years of monetary policy stimulus and the future of interest rates.
GOP Senate leader McConnel: 'Public will learn to love it'
Despite passing in both chambers, Trump's tax reform package remains deeply unpopular with most of the public, who see the bill's biggest benefits going to the wealthy. The Republicans' drive to slash taxes is also expected to push the US' national debt even higher.
Democrats have labelled it a "giveaway" to corporations, whom they don't see hiring more workers or raising wages on the back of the breaks.
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Nevertheless, Republicans insisted that the public would benefit and eventually respond positively. "If we can't sell this to the American people, we ought to go into another line of work," Senate Majority Leader Mitch McConnell said.
"The proof will be in the paychecks," Rob Portman, a Republican Senator from Ohio, said during the nighttime debate. "This is real tax relief, and it's needed."
Democrats, however, continued to chide the bill after it passed the Senate, with New York Senator Chuck Schumer telling Republicans "This is serious stuff, we believe you are messing up America."
Democrats are expected to seize upon the bill's unpopularity ahead of next year's congressional elections.
"Every fundraiser, every fat check from a billionaire, and every champagne and caviar party has been about getting to this day, the day when the politicians they put in charge of Washington would pay them back with a $1.5 trillion giveaway," said Democratic Senator Elizabeth Warren.
bik, dm, aw/cmk (AP, Reuters)