In a testament to the fast-moving, partisan process, however, Republicans withheld the last details of their bill until 5:30 p.m. on Friday—a time usually reserved in Washington for announcing unceremonious departures and delivering other dreary news. Among other provisions, the legislation would reduce the corporate tax rate from 35 percent to 21 percent, slightly cut rates and double the standard deduction for individuals, double the child tax credit, and effectively repeal the Affordable Care Act’s individual insurance mandate beginning in 2019. The final compromise would cap the deduction for state and local taxes at $10,000, but it would preserve popular deductions for medical expenses, student loan interest, and graduate student tuition.
GOP leaders locked down the critical Senate votes one-by-one over the last several weeks through a combination of old-fashioned horse trading and appeals to unity. Earlier in the month, they bowed to Wisconsin Senator Ron Johnson’s insistence on more generous treatment of “pass-through” businesses like the one he partially owns. They changed a tax break for capital expensing to assuage Senator Jeff Flake of Arizona and gave him a verbal commitment to work together on immigration. They adopted a number of policies demanded by Senator Susan Collins, although the Maine moderate likely will be left to hope that Senate Majority Leader Mitch McConnell will keep his promise to enact a pair of bipartisan health-care bills that she extracted for her vote.
That left Rubio as the final apparent holdout, but the Florida Republican settled on a compromise in his bid to extend an expanded child tax credit to millions more families on the lower end of the income scale. The tax bill had already doubled the base credit to $2,000 per kid, but Republicans initially had made only $1,100 of that money refundable. The result was that many working-class families—earning, say, between $20,000 and $50,000 a year—would not have enough taxable income to take full advantage of the credit. Rubio and Senator Mike Lee of Utah campaigned to make the $2,000 fully refundable, but they accepted the GOP’s offer of $1,400.
“For far too long, Washington has ignored and left behind the American working class. Increasing the refundability of the Child Tax Credit from 55% to 70% is a solid step toward broader reforms which are both Pro-Growth and Pro-Worker,” Rubio tweeted on Friday, indicating his support.
Senator John McCain of Arizona remains hospitalized due to side effects of his brain-cancer treatment, but the remaining uncertainty over the outcome dissipated Friday afternoon when both Rubio, and more surprisingly, Corker, hopped on board. The Tennessee Republican opposed the bill initially because it added too much to the deficit, but with the legislation seemingly headed for passage anyway, he changed his mind. “After great thought and consideration,” he said in a statement, “I believe that this once-in-a-generation opportunity to make U.S. businesses domestically more productive and internationally more competitive is one we should not miss.” The GOP has more leeway in the House, where just 13 Republicans voted no on the initial bill in November. There’s been little uprising over potential changes since then.