Cathy McMorris Rodgers stands by tax reform bill

Dec. 19--With Congress on the brink of approving the first major overhaul of the federal tax code since the Reagan era, U.S. Rep. Cathy McMorris Rodgers said she and her colleagues "have served the American people well."

In a teleconference with reporters Monday, McMorris Rodgers, R-Wash., kept to the party line, saying the $1.5 trillion tax reform bill that's expected to pass this week "will (result in) more jobs, fairer taxes and bigger paychecks" for American taxpayers and their families.

Her comments came just hours before the Joint Committee on Taxation released a new analysis showing that the bill will save the top 1 percent of taxpayers $60.8 billion in 2019, compared to $16.9 billion for the bottom 51 percent who earn less than $50,000.

By 2025, according to the analysis, the bottom half will be paying $4.5 billion more than under current law, while the top earners will still be saving $23.2 billion.

The committee previously estimated that tax reform would add at least $1 trillion to the national debt over the next 10 years, even taking into account its positive impact on economic growth.

McMorris Rodgers questioned that analysis, however, saying its growth assumptions were too low.

"I think we will see much stronger economic growth," she said. "That will create more economic activity and help us balance the budget. If we continue on with the status quo, we're never going to fix the federal debt. I'm very hopeful this (reform effort) will be part of getting us to a place where we can address the deficit."

The House is scheduled to vote on the bill today; the Senate could take up the measure as well, later in the day.

Among other provisions, the legislation cuts the corporate tax rate from 35 percent to 21 percent, lowers the rate at which most other "pass through" business income is taxed and allows companies to immediately deduct the cost of new equipment.

For individuals, it lowers income tax rates, nearly doubles the standard deduction and increases the child tax credit, while eliminating the personal exemption. For those who itemize, the bill caps state and local tax deduction at $10,000.

The measure also eliminates the individual mandate, a provision in the Affordable Care Act that fines people who don't buy health insurance if they don't already have insurance through the government or a private employer.

The Congressional Budget Office estimates the move will boost insurance premiums and price millions of Americans out of the insurance market by removing the incentive for healthy people to purchase insurance -- increasing the number of uninsured by 4 million in 2019 and 13 million by 2027.

McMorris Rodgers said she was "pleased" that the repeal was included in the final bill.

"We need reforms to address what's driving the cost of health insurance," she said, "but I believe that's a separate conversation. Imposing a fine on people who don't have insurance, I don't think that's right."

The final reform bill also includes two provisions that were McMorris Rodgers-sponsored, related to people with developmental disabilities.

One would allow the individuals to save more money, without putting their disability benefits at risk; the second would allow their families to roll over money from an educational savings account into a separate account the individuals could use to pay for expenses that aren't covered by Medicaid.

"I'm excited about what tax reform means for our families and communities in eastern Washington," she said.

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Spence may be contacted at [email protected] or (208) 791-9168.

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