N.M. congressional Democrats decry tax cut vote

And if he was reluctant about it, that did not come across in his voice just moments after the bill passed the House of Representatives.

“We’re in the poor end of the economic spectrum,” Rep. Steve Pearce said of New Mexico during a telephone call early Tuesday afternoon. “To get a couple thousand dollars back means people can pay their bills.”

A Republican from Hobbs and the lone GOP member of New Mexico’s five-member congressional delegation, Pearce touted the legislation as a tax cut virtually across the board that will keep money in pockets of residents of one of the poorest states in the country.

Democrats, however, argued the benefits of the tax bill go overwhelmingly to the richest Americans and will force cuts to widely popular programs that are lifelines to many New Mexicans.

“Unfortunately, this bill gives 83 percent of tax cuts to corporations and the top 1 percent,” said Rep. Ben Ray Luján, a Democrat whose district includes Santa Fe.

Luján and other Democrats argue states like New Mexico are likely to lose out under the tax bill, maintaining that Republicans will move to cut social programs to pay for the tax cuts.

And in the short term, Democrats warn that the bill would require automatic rollbacks in some programs.

The plan is expected to add about $1.46 trillion to the federal government’s deficit over the next decade.

That in turn will trigger federal budget cuts under a process known as sequestration, which is meant to rein in the deficit. An analysis by the Congressional Budget Office said the bill would require slashing about $25 billion from Medicare. The cuts would also end payments of oil and gas revenue from federal lands to states like New Mexico.

Pearce, a candidate for governor, says the tax cuts will pay for themselves by boosting businesses. And he expects members of Congress will vote to waive the immediate budget cuts, as they have in the past.

Luján’s office would not comment without seeing a formal proposal on the cuts. But the congressman signed on to a letter with fellow Democrats earlier this month warning that Republicans cannot assume they will support waiving those budget cuts without steps to stabilize health insurance markets, which could be upended by another facet of the tax bill that ends a requirement that all American adults have coverage or pay a penalty.

While Pearce voted for the bill, New Mexico’s two other members of the House of Representatives — Luján and Michelle Luján Grisham — voted against it.

Both of New Mexico’s senators, Tom Udall and Martin Heinrich, were expected to oppose the bill when it reached the Senate on Tuesday night. House leaders said they would have to vote on it once more Wednesday for procedural reasons.

An analysis by the left-leaning Tax Policy Center found the bill would reduce income taxes by an average of $1,600 in 2018, with the biggest benefits going to households earning between $308,000 and $733,000. Middle income taxpayers would pay about $900 less than under the current law while families with even lower incomes would get a more modest break. Those tax cuts will expire after a decade.

The bill also contains at least one change that will impact some homeowners.

One will no longer allow a deduction of mortgage interest on loans above $750,000, according to ATTOM Data Solutions, a real estate data site.

Of the home transfers so far this year in Santa Fe County, 37 properties had loans over $750,000, according to the website. Bernalillo County was a close second at 36 properties, but no other areas of the state are in double digits.

For Pearce, the bill will mean more cash for many families. For Democrats like Luján, it is a question of which families and at what cost.