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Senate moves tax cut legislation to brink of final passage

President Donald Trump hailed the vote in an early morning tweet. Picture by Evan Vucci, Associated Press
President Donald Trump hailed the vote in an early morning tweet. Picture by Evan Vucci, Associated Press President Donald Trump hailed the vote in an early morning tweet. Picture by Evan Vucci, Associated Press

Jubilant Republicans pushed to the verge of the most sweeping rewrite of US tax laws in more than three decades early on Wednesday.

After midnight, the Senate narrowly passed the legislation on a party-line 51-48 vote.

Protesters interrupted with chants of "kill the bill, don't kill us" and vice president Mike Pence repeatedly called for order. Upon passage, Republicans cheered, with Treasury Secretary Steve Mnuchin among them.

Senate majority leader Mitch McConnell insisted Americans would respond positively to the tax bill.

"If we can't sell this to the American people, we ought to go into another line of work," he said.

President Donald Trump hailed the vote in an early morning tweet and promised a White House news conference on Wednesday after the House completes legislative action on the measure.

The early morning vote came hours after the Republican party rammed the bill through the House, 227-203. But it was not the final word in Congress because of one last hiccup.

Three provisions in the bill, including its title, violated Senate rules, forcing the Senate to vote to strip them out. So the massive bill was hauled back across the Capitol for the House to vote again on Wednesday, and Republicans have a chance to celebrate again.

Hours earlier, House Speaker Paul Ryan, who has worked years toward the goal of revamping the tax code, gleefully pounded the gavel on the House vote.

Republican House members roared and applauded as they passed the $1.5 trillion (£1.2 trillion) that will touch every American taxpayer and every corner of the US economy, providing steep tax cuts for businesses and the wealthy, and more modest help for middle- and low-income families.

Despite Republican talk of spending discipline, the bill will push the huge national debt ever higher.

"This was a promise made. This is a promise kept," Mr Ryan and other Republican leaders said at a victory news conference.

After the delay for a second House vote, the measure then heads to President Donald Trump, who is aching for a win after 11 months of legislative failures and nonstarters.

Congressional Republicans, who faltered badly in trying to dismantle Barack Obama's Affordable Care Act, see passage of the tax bill as crucial to proving to Americans they can govern - and imperative for holding on to House and Senate majorities in next year's midterm elections.

"The proof will be in the paychecks," Senator Rob Portman said during the Senate's night-time debate. "This is real tax relief, and it's needed."

Not so, said the top Senate Democrat as the long, late hours led to testy moments.

"This is serious stuff. We believe you are messing up America," New York Senator Chuck Schumer told Republicans, chiding them for not listening to his remarks.

The Republican party has repeatedly argued the bill will spur economic growth as corporations, flush with cash, increase wages and hire more workers. But they acknowledge they have work to do in convincing everyday Americans. Many voters in surveys see the legislation as a boost to the wealthy, such as Mr Trump and his family, and a minor gain at best for the middle class.

Democrats called the bill a giveaway to corporations and the wealthy, with no likelihood that business owners will use their gains to hire more workers or raise wages.

Tax cuts for corporations would be permanent while the cuts for individuals would expire in 2026 to comply with Senate budget rules. The tax cuts would take effect in January, and workers would start to see changes in the amount of taxes withheld from their paychecks in February.

For now, Democrats are planning to use the bill in their campaigns next year. Senate Democrats posted poll numbers on the bill on a video screen at their Tuesday luncheon.

"This bill will come back to haunt them, as Frankenstein did," House Democratic leader Nancy Pelosi said.

The bill would slash the corporate income tax rate from 35 per cent to 21 per cent. The top tax rate for individuals would be lowered from 39.6% to 37%.

The legislation repeals an important part of the 2010 health care law – the requirement that all Americans carry health insurance or face a penalty - as the Republican party looks to unravel the law it failed to repeal and replace this past summer.