GOP Tax Bill Passes in Senate
December 04, 2017
Senate Republicans Pass Tax Bill; GOP pushes to pass measure to avoid government shutdown; U.S. factory orders edge slightly lower and core capital goods orders revised up.
- Senate Republicans Pass Tax Bill. The Senate passed the most sweeping tax reform bill in decades early on Saturday, in a 51-49 vote, with only Republicans voting for the bill. Republicans have pitched the bill as a middle-class tax cut. The overhaul is intended to immediately cut taxes for about 70 percent of middle-class families, yet it would raise taxes for millions of others, as the Senate plan eliminates some tax breaks like the deduction for state and local income taxes and phases out the individual tax cuts at the end of 2025. Businesses would enjoy a deep corporate tax rate cut, from 35 percent to 20 percent. The tax reform also provides a large tax break for the owners of small businesses and other companies not organized as traditional corporations. Democrats opposed the tax bill as a bloc. With the Senate split 52 to 48, Republicans barely squeezed by with the number of votes it needed to pass the bill. However, the bill’s passage was made possible by a near-complete Republican embrace of the idea that nearly $1.5 trillion of tax cuts would pay for themselves by producing enough economic growth and additional federal revenue to offset their costs to the Treasury Department. [NYTimes]
- GOP pushes to pass measure to avoid government shutdown. Republicans are working towards passing a two-week stopgap measure to avoid a looming government shutdown; however, they face several obstacles in the next few weeks. With government spending set to expire at the end of Friday, Republicans are aiming to buy more time to negotiate a long-term spending package. Congressional Republicans will need votes from President Trump and Democrats to secure the passage of the spending bill and will also need to navigate measures on immigration and the Affordable Care Act. The stopgap spending measure would extend government funding through Dec. 22. [NYTimes]
Economic Indicators & News
- U.S. factory orders edge slightly lower and core capital goods orders revised up. New orders for U.S.-made goods fell less than expected in October, as shipments of core capital goods were revised up. According to the Commerce Department, factory goods orders dipped 0.1 percent amid a demand decrease for both civilian and defense aircraft. September data was revised to show orders increasing by 1.7 percent instead of the previously reported 1.4 percent rise. Economists polled by Reuters had expected factory orders to fall 0.4 percent in October. Meanwhile, orders for non-defense capital goods excluding aircraft – a measure of business spending plans – rose 0.3 percent in October instead of the 0.5 percent drop reported last month. These “core” capital goods orders rose by 2.3 percent in September. Shipments of core capital goods, used to calculate business equipment spending in the gross domestic product (GDP) report, increased 1.1 percent in October instead of the previously reported 0.4 percent rise. [Reuters]