WASHINGTON — Americans who earn tips, overtime or Social Security benefits may not have to wait long for federal taxes on that income to end, the White House says.
President Trump wants all three of those major tax cuts to be included in a looming budget reconciliation bill that can pass with bare majorities in both the Republican-led House and Senate, press secretary Karoline Leavitt told reporters Friday.
“The president has made it very clear to our allies on Capitol Hill that is a critical piece of this reconciliation package,” Leavitt said in response to a question from The Post, confirming Trump’s wishes for all three to be included in the legislation.
The vehicle for the cuts had been unclear and congressional Republican leaders, including Senate Majority Leader John Thune (R-SD), had not specifically committed to a strategy for passing those three campaign-trail promises.
Although Trump, 78, campaigned on the policies, Republicans hold slim majorities in both chambers and can afford few defections from members potentially concerned about the impact on the federal deficit.
The budget reconciliation bill is expected to come in the first half of this year and it’s unclear whether legislators will impose income limits on beneficiaries.
It’s also unclear whether the provisions can pass muster with congressional parliamentarians, who have immense power to veto items that they deem non-germane to the budget.
Changes to the Social Security system — long regarded as a political “third rail” — are thought to be particularly vulnerable, sources tell The Post.
The precise timing of the reconciliation push isn’t yet known, and it may come after a March 14 government funding deadline.
Thune said earlier this month that Republicans have as a top legislative priority extending lower individual tax rates passed in Trump’s 2017 tax cuts law.
“Those things are all on the table. When that gets done is still a point of debate,” Thune said of abolishing taxes on tips, overtime and Social Security benefits.
“Obviously there is a lot involved in crafting a tax bill,” Thune said. “There are a lot of moving parts. There are a lot of suggestions that have come up, and the president has put on the table, which we will take under consideration.
“But in the end, we want to produce a bill that extends the existing tax policy that will prevent a $4.6 trillion tax increase on the American people at the end of the year, and hopefully accomplish some other things that the president has laid out as objectives.”
Trump won the Nov. 5 election after promising a raft of tax cuts to working-class Americans, beginning with his plan to spare tips, a policy to which he has credited his victory in Nevada, where many Las Vegas hotel and restaurant workers depend upon gratuities.
Democratic presidential candidate Kamala Harris, the then-vice president, ultimately backed the plan as well.
Trump later rolled out plans to abolish federal taxes on overtime and Social Security benefits — along with a variety of other reforms, such as scrapping the $10,000 cap on the amount of state and local taxes that can be deducted from federal tax bills, which particularly impacts high-tax jurisdictions like New York.
He additionally floated an initiative to allow people with car loans to write off the interest on domestic vehicles — similar to home mortgage deductions.
Trump generally argues that tax cuts spur economic growth, thereby indirectly increasing federal revenue to offset reduced rates.
The president has also asserted that significant new tariffs would add to government coffers.
