Senate Republicans took a step Wednesday to overturn an emergency D.C. measure that divorced the city from certain federal tax cuts, creating an estimated $600 million hole in the District’s budget if it becomes law.
A party-line 7-3 vote advanced a disapproval resolution out of the Republican-controlled Senate Government Affairs Committee that District leaders say will upend their tax filing schedule and erase a child tax credit that was being funded by opting out of the tax cuts.
The District voted last fall to decouple itself from tax-saving provisions included in the One Big Beautiful Bill. That includes federal tax exemptions on overtime and tips, personal interest on car loans and an increase to the standard deduction.
Twelve other states took similar action to pull out of the tax cuts that don’t align with their revenue projections.
The District, which city leaders say is in for some belt-tightening due to the Trump administration’s downsizing of the federal government, withdrew from the tax cuts to bank an additional $600 million through 2029.
But Sen. Rick Scott, the Florida Republican who introduced the disapproval resolution, argued the tax cuts empower D.C. residents to spend their money how they want.
“Seems obvious that the D.C. Council of Democrats would love to undermine every single move President Trump makes, every promise he keeps, to the American people, but to deliberately deprive a sense of the opportunity to keep more of their hard-earned dollars is simply unfair and absurd,” Mr. Scott said during the hearing.
Sen. Maggie Hassan countered by saying the District should be in control of its own financial destiny.
“The people of D.C., through their elected representatives in the D.C. Council, have a right to decide their own local tax policy, just like the people of New Hampshire get to decide how much state taxes we have in New Hampshire,” the New Hampshire Democrat said. “That’s one of the reasons why Congress has never overturned a tax measure like this, a measure that was approved by the District of Columbia.”
The House will hold a vote Wednesday afternoon on the same resolution.
District leaders have sounded the alarm about the congressional momentum behind undoing their tax framework.
D.C. Mayor Muriel Bowser and D.C. Council Chairman Phil Mendelson, both Democrats, wrote in a joint letter that the resolution infringes on the District’s Home Rule authority.
The two further said Capitol Hill’s proposal would force a midyear change to tax policy that will cause delays in collection and increase costs on the city.
The Center on Budget and Policy Proposals, a nonpartisan research group, backed the District’s opposition to the measure because they said it helps patch a budget hole created by federal initiatives.
Delegate Eleanor Holmes Norton was more pointed in her criticism of the resolution.
“It will sow chaos in the middle of tax filing season, likely forcing the District to hold tax filings altogether while it scrambles to rewrite forms, systems and guidance,” the District’s nonvoting representative in Congress said during a Tuesday press conference. “That is not oversight. That is not governance. It is sabotage, and the damage would be severe and intentional.”
The resolution, if passed, would be another instance of Republicans exerting their will on D.C. policy.
Congressional lawmakers enforced a $1 billion budget cut on the District last year by removing language in a temporary spending package. By using some emergency maneuvers, the District was able to mitigate the cut to about $350 million.
Outside of taxation, President Trump launched a sweeping crime and immigration crackdown in the District last summer that involved deploying the National Guard and sending federal agents to patrol city streets.
Last month, military officials ordered National Guard troops to stay in the District through the end of this year.
Republicans in Congress also threatened to withhold federal funding from the District if it didn’t tear up a Black Lives Matter street mural that sat a block away from the White House.
Ms. Bowser did remove the mural, but said it was already scheduled to be replaced by new artwork for the nation’s 250th celebration.
• Matt Delaney can be reached at mdelaney@washingtontimes.com.
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