The Senate worked late Friday night, remaining in its chamber until nearly two o’clock Saturday morning to hammer out the particulars of tax reform efforts backed by President Trump.
You already know where University of Pennsylvania President Amy Gutmann stands on tax reform. Here’s how Penn students’ representation in the U.S. Senate, Bob Casey (D-PA) and Pat Toomey (R-PA), came down on key tax questions late Friday night (and early Saturday morning).
The 429-page bill, H.R. 1 or the Tax Cuts and Jobs Act, passed the Senate 51-49 at 1:51 AM on Saturday morning. The bill heads next to House-Senate negotiations to reconcile differences between the reform bills each house has passed. The Senate’s version, summarized here, would simplify the tax code, lower taxes for individuals and businesses in the U.S., and repeal the individual mandate of the ACA. Casey: No. Toomey: Aye.
H.R. 1 contains an “endowment tax”— a provision cited by Penn President Gutmann in her opposition to the bill — levying a 1.4 percent excise tax on income from private college and university endowments that exceed $250,000 per student. A provision of H.R. 1 pushed by Toomey himself would exempt those private schools which forgo federal funds from this excise tax.
Jeff Merkley (D-OR) offered an amendment that he said would level the playing field for colleges and universities by making no exemption for schools that forgo federal funds. Merkley cited conservative Hillsdale College as the only known beneficiary of the Toomey-backed exemption. (Other schools, like religious Grove City College in Pennsylvania, also refuse federal aid but wouldn’t be subject to the excise tax since their endowments are smaller.) Toomey briefly defended the exemption, saying “Hillsdale College has been maligned” on the floor and reminding his colleagues that “many schools, including some in Pennsylvania” refuse federal aid. But Toomey neither earned full Republican support nor the vote of his senior senator, and Merkley’s amendment passed 52-48: Penn won’t be safe from the endowment tax, but neither will Hillsdale. Casey: Aye. Toomey: No.
Ted Cruz (R-TX) introduced an amendment that expands 529 savings plans for education, allowing parents to use tax-preferred money to fund their children’s K-12 education at private and parochial schools. Cruz’s amendment squeaked by with a tie-breaker appearance from Vice President Pence, 51-50. Casey: No. Toomey: Aye.
Tim Kaine (D-VA) proposed an amendment that would have made individual tax cuts permanent and removed the repeal of a corporate tax called the alternative minimum tax (AMT) at the expense of dropping the corporate rate from 35 to 25 percent instead of the 20 percent contained in the original bill. That amendment failed, 34-66. Pat Toomey spoke in opposition to the bill. Casey: Aye. Toomey: No.
Joe Manchin (D-WV) rose next to introduce an amendment. His would send the bill back to committee with instructions to drop the corporate rate to just 25 percent to pay for changes that would make the tax code friendlier to individuals. The amendment died on a 38-61 vote. Casey: Aye. Toomey: No.
Maria Cantwell (D-WA) later moved to send the bill back to committee to remove a title which would allow oil and gas drilling in the Arctic National Wildlife Refuge in Alaska. Lisa Murkowski (R-AK) spoke in defense of the provision. The amendment was rejected along party lines, 48-52, so drilling will be allowed on the Alaskan conservation site. Casey: Aye. Toomey: No.
Also proposing changes to the bill Friday evening were:
- Bernie Sanders (I-VT) with an amendment effectively assassinating H.R. 1., stating he “would be delighted to gut and destroy this legislation.” His proposal died instead, 46-54. Casey: Aye. Toomey: No.
- Sherrod Brown (D-OH) and Michael Bennet (D-CO), offering to further expand the child tax credit at the expense of pushing the corporate rate back up to 25 percent. Roll call vote killed Brown-Bennet 48-52. Casey: Aye. Toomey: No.
- Marco Rubio (R-FL) and Mike Lee (R-UT), proposing a similar–but less permanent–expansion to the child tax credit in exchange for inching the final corporate rate up to 20.94 percent. The amendment fell to a devastating 29-71 vote. Even Casey and Toomey joined sides to oppose the amendment in their sole agreement of the night. Casey: No. Toomey: No.
- Bob Menendez (D-NJ), requesting that the entire bill be sent back to the Finance Committee in order to remove the repeal of the State and Local Tax (SALT) deduction. If Menendez’s instructions were taken up in committee, Americans could continue to subtract SALT from their income before calculating their federal tax obligations. Menendez argued that repealing the deduction would “subject millions of middle-class families to double taxation” and set the stage for cuts to state and municipal programs. John Thune (R-SD) retorted, “SALT deduction disproportionately benefits wealthy taxpayers in high-tax states” and pointed to a new $10,000 property tax deduction. Votes were 48-52. Casey: Aye. Toomey: No.
Proceedings were broadcast live on C-SPAN2.
Before heading off to bed, Senators Casey and Toomey took to Twitter to share their thoughts on the final passage of the Senate bill.