House Passes ‘Trojan Horse’ Tax Bill To Expand Welfare For Illegal Aliens

Speaker Mike Johnson (R-LA) rushed through a tax bill unveiled only days ago over significant policy objections from both conservative and centrist factions of the Republican Party.

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bipartisan bill to slash taxes for businesses and enhance the child tax credit for illegal aliens is one step closer to becoming law. The legislation passed the House on Wednesday evening by an overwhelming 357-70 vote, with Republicans backing the bill by 169-47 and Democrats by 188-23. The vote gave House Speaker Mike Johnson a much-needed win but underscores his struggles within a currently divided Republican Party. It now heads to the Democrat-run Senate for final passage.

Congressional Conservatives have spoken out against provisions in the bill they see as handouts to illegal immigrants, particularly an expansion of the Child Tax Credit without any language requiring the parent to have a Social Security number. They argue the expansion would serve as an additional powerful migration pull, even as migrant encounters at the border reach record highs under President Joe Biden.

Despite the broad bipartisan support in the House, the bill’s passage wasn’t without hiccups. To avoid GOP amendments that could sink the bill, Mr. Johnson, Louisiana Republican, used a maneuver that requires a two-thirds majority to pass.

In addition to concerns over the Child Tax Credit, a group of New York members have spearheaded opposition from Republicans from high-tax states over the state and local tax (SALT) deduction cap

He also had to cut a side deal with four New York Republicans who threatened to jam the chamber on other unrelated votes because the bill didn’t increase federal deductions for state and local taxes (SALT) that would deliver big savings to residents in high-tax blue states.

The speaker committed to the New Yorkers, who are in swing districts, to work with them on changing SALT but in separate legislation.

The SALT-cap opponents want to nix the “marriage penalty” by raising SALT deductions for married couples from $10,000 to $20,000 and leaving the individual $10,000 deduction unchanged. SALT caps were imposed under the Trump tax cuts.

“To not include a SALT fix is idiotic, and it’s political malpractice,” said Rep. Mike Lawler, a Republican from a New York swing district. He said denying him a win on SALT would risk his reelection and Republicans holding the majority.

That tax credit fight takes place as Senate negotiators continue seeking a separate compromise on border security and foreign aid. In that fight, conservatives have accused Democrats of prioritizing policies that would alleviate border bottlenecks by more speedily processing migrants and hiding and housing those already here instead of deterring future migration in an election year ploy to obscure the severity of the border crisis and show action, even if contrary to the American interest.

Johnson indicated Wednesday morning he would move the bill later in the evening under suspension of the rules. “Suspension votes” require two-thirds support – but allow for speedier passage – and are generally used for non-controversial or low-profile votes, like renaming post offices.

However, Johnson is signaling a new normal for suspension votes that could sidestep opposition in his own party. Only weeks ago he suspended the rules to move another consequential piece of legislation – a continuing resolution which extended government funding levels and priorities enacted in December 2022 by Speaker Nancy Pelosi (D-CA) and Majority Leader Chuck Schumer (D-NY) during a lame duck Congress.

That bill enjoyed overwhelming Democrat support. Johnson secured majority Republican support of the bill by only one vote, garnering 107 in support over 106 nays. Johnson only secured a last-minute switch to yes in order to achieve a majority.

Meanwhile, the Freedom Caucus disliked the child tax credits, which for most families would increase by $100 from the annual $2,000 per child. Those with lower incomes who have little or no tax liabilities would also for the first time receive the full amount of the credit as a cash payment.

Despite the criticism within his party, Johnson has touted the bill, calling it “important bipartisan legislation to revive conservative pro-growth tax reform.”

Yet significant conservative opposition to the bill exists. Richard Stern, Director of the Heritage Foundation’s Herman Center for the Federal Budget and a former budget staffer to Johnson, said the bill is “a Trojan horse to expand welfare programs, including those that go to illegal aliens.”

He continued:

“Most of the bill is an increase in spending and subsidies, not tax relief. 91.5% of what is being labeled as “middle class tax cuts” are actually going to a dramatic expansion of the welfare state. Further, the bill will create at least $155 billion in new federal deficits that will drive inflation and mortgage rates even higher. This is a reckless and fiscally irresponsible measure that will burden hard working American families.”

In a sign that the vote will be close, staff for the Ways and Means Committee, which recommended the bill only days before Johnson scheduled a vote, encouraged committee members to cast their vote as soon as the vote opened as a show of force.

In an email to the committee’s GOP members’ staffs, a staffer for Ways and Means Chairman, Jason Smith (R-MO), told members they “need to light up the board with GREEN as quickly as possible.

“We know it is probably when Members are coming back from dinner but if they can prioritize voting early in the tally it would be appreciated by the Chairman.”

Smith, who negotiated the deal with Senate Finance Chairman Ron Wyden (D-OR), and the bill’s other proponents argue that changes to the bill could endanger the bill’s passage in the Senate.

An array of Senate Republicans have expressed reservations about the costs of the bill and lack of input from members. They questioned whether the elimination of the pandemic-era employee retention tax credit would offset the costs and feared that illegal immigrants would be able to receive the child tax credit.

“I’m just not going to make it easy,” said Sen. Thom Tillis of North Carolina, who is a member of the GOP leadership team. “It’s amazing to me that we have Republican members who are voting on something that would without question provide child subsidies to illegally present people.”

However, Republicans who oppose the legislation question why Johnson is prioritizing a bill with bad policies unsupported by conservatives that would hand the unpopular President Joe Biden a rare election year win.✪