Major divisions remain as gop nears its tax deadline – the washington post gas chamber jokes

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Republicans set an aggressive timeline for passing legislation to overhaul the nation’s tax code, putting pressure on senior lawmakers and the White House to resolve major disagreements about the effort before a Wednesday deadline to introduce a bill.

In a sign of the challenge to come, House Republicans narrowly passed a budget measure on Thursday allowing the tax overhaul to increase the deficit by $1.5 trillion over a decade. The effort succeeded with support from only two lawmakers to spare, as a group of northeastern Republicans opposed the budget resolution because of concerns that the tax rewrite could hurt their constituents.

The Wednesday deadline sets up what is likely to be several days of intense lobbying to shape the bill. The House and Senate aim to pass legislation by Thanksgiving, with the goal of finalizing the bill and sending it to President Trump by year’s end.

But as they rush forward, lawmakers have not resolved basic questions about how the tax overhaul would affect the wealthy, the middle class or lower-income earners. Still unresolved were several questions: whether the legislation would moderate the expected benefits for the wealthy; whether it would cap or eliminate popular middle-class tax breaks like the state and local tax deduction or the tax benefit of 401(k) retirement plans; and how dramatically it would expand a child-care tax credit that helps working-class families. Also on the table were several critical questions about how the corporate tax code would change.

Lawmakers planned to spend the coming days trying to resolve those concerns, with hopes that they would avoid the kind of intraparty squabbles that have doomed other major legislative efforts this year. They also hoped to avoid unexpected criticism from Trump, who has railed against GOP hopes of overhauling the 401(k) provision.

House Ways and Means Committee Chairman Kevin Brady (R-Tex.), the head of the House GOP effort to draft legislation, said that after he introduces a bill on Wednesday, his committee will swiftly move to refine it and make changes before voting on it and sending it to the full House.

With the budget behind them, Republican lawmakers can no longer put off answering a host of thorny questions. There are deep divisions over which taxes or deductions to eliminate to offset some of the trillions of dollars in revenue lost to proposed steep tax cuts for corporations and some individuals.

Options to raise revenue have been met with stiff resistance. A Republican proposal to eliminate or scale back a deduction that allows individuals to deduct state and local taxes from their federal payment turned into a major sticking point in Wednesday’s budget vote. Twelve Republicans from the high-tax states of New York, New Jersey and Pennsylvania, where many voters stand to be hit hard if the deduction were eliminated, voted against the budget.

Every Republican member of the California and Illinois delegations, whose constituents are subject to relatively high local taxes, supported the budget, and several New York members waited to cast their no votes until GOP leaders had obtained a majority, indicating that they were unwilling to hold up the tax bill.

No Democrats supported the budget, and the party is staunchly opposed to the GOP proposal. Democrats are accusing Republicans of pursuing tax cuts that will expand the budget deficit to deliver tax cuts that mainly benefit the wealthy and corporations.

Democrats also have seized on the potential changes to retirement accounts and to the state-and-local-tax deduction, arguing that the GOP plan could lead to a tax increase for many middle-class households — particularly in high-cost-of-living suburban areas.

"With this budget, House Republicans are officially on the record supporting a middle-class tax increase — something they’ll be forced to defend repeatedly in the midterms," said Democratic Congressional Campaign Committee spokesman Tyler Law.

House Minority Leader Nancy Pelosi (D-Calif.) urged colleagues in a letter Thursday to draw attention to what she called a "monumental assault on the middle class and the future of our nation" when Republicans release their tax bill next week.

Striking SALT from the tax code entirely would generate more than $1 trillion in additional revenue that could offset the rate cuts that are integral to the GOP plan. If Republican leadership is forced to compromise, they may have to set less ambitious goals for tax cuts more broadly or find other ways to offset them.