SCOTT SIMON, HOST:
Congressional Republicans appear to be on track to pass their $1.5 trillion tax cut. They would like it to be on the president's desk by Christmas Day. House and Senate negotiators released a final draft of the bill late yesterday, and two senators who had been undecided or even opposed announced their support. And that removes a potential roadblock in time for a vote next week. NPR's Scott Horsley joins us. Scott, thanks for being with us.
SCOTT HORSLEY, BYLINE: Good to be with you, Scott.
SIMON: Bob Corker, senator of Tennessee, was the only Republican who had voted against the Senate version of this bill. Senator Marco Rubio had been threatening to withhold his support. They both say they're now on board. What brought them around?
HORSLEY: Well, Rubio won some concessions on the child tax credit for working-class families. That makes the credit a little bit more valuable for lower-income parents who don't pay a whole lot in federal taxes. Some of his Republican colleagues had been saying they couldn't afford that. Rubio countered that they were able to afford a lower tax rate for people making more than half a million dollars. And he held out for a more generous tax credit. He got it. Advocates for the poor, however, complain that the measure still doesn't go far enough.
Corker's concern was the trillion dollars this bill's expected to add to the deficit or the federal debt. He didn't really win any concessions, but he ultimately came around, saying, this is a once-in-a-generation opportunity to make U.S. corporations more competitive.
SIMON: So with those two votes, Republicans seem to be on target to pass the bill. What's in it?
HORSLEY: The big thing in this bill is what Corker likes - that's a deep cut in the corporate tax rate. It comes all the way down from 35 percent to 21 percent. Both the House and Senate had initially wanted a 20 percent corporate tax rate, but negotiators nudged that up just a little bit to free up money for other things, including that cut in the top tax rate for wealthy people.
The bill also temporarily cuts individual tax rates and creates a lower rate for so-called pass-through businesses, like partnerships. The corporate cuts are permanent. The individual tax cuts expire at the end of 2025.
SIMON: What side - House or Senate - does the final version seem to come down on?
HORSLEY: It's probably a little bit closer to the Senate version. That's where the Republican margin was narrower, so they kind of stuck with that. On the state and local tax question, for example, it was the Senate version that prevailed. So people in high-tax states will be able to deduct up to $10,000 in local tax, including both property taxes and either income taxes or sales tax. So the final bill is not quite so punitive for people in those high-tax states.
On the mortgage interest deduction, the House wanted to limit that to mortgages of half a million dollars. The Senate wanted to leave the cap where it was at a million dollars. They split the difference, so interest is going to be deductible on mortgages up to $750,000. The bill also doubles the size of estates that can be passed on to heirs tax-free. That means it's a $22 million exemption for couples. And a provision in the House bill that would've taxed graduate students on the value of tuition waivers - that's now gone.
SIMON: It'll reach the president by December 25?
HORSLEY: It looks like it. The House is scheduled to vote on Tuesday and the Senate on Wednesday. President Trump said this week, as long as he gets the bill before Christmas, the IRS will have withholding tables ready by February. So paychecks or direct deposits should begin to reflect the new tax rates by then.
SIMON: NPR's Scott Horsley, thanks so much.
HORSLEY: Good to be with you, Scott. Transcript provided by NPR, Copyright NPR.