House Republicans, touting the tax cuts that remain popular among their core voters, are poised to pass a $631 billion extension of them in their final legislative push before the midterm elections.
GOP Senate leaders aren’t eager to spend any time on tax policy before the Nov. 6 elections, however, and some Republicans say that the votes are largely about sending an election-year message to voters rather than making law.
“It’s not going to pass the Senate,” said Rep. Thomas Massie (R, Ky.) “But I’ll vote for it.”
The House passed two tax bills Thursday and was expected to pass a third on Friday. One bill passed Thursday, on a 240-177 vote, would expand retirement-savings incentives. The second, passed 260-156, would add tax breaks for startup businesses. Among other items, the retirement bill would allow individuals to contribute as much as $2,500 a year of after-tax money into a new type of universal savings account, where the money would grow tax-free and could be used for nonretirement purposes.
The largest and most controversial bill is expected to pass Friday by a vote similar to the 227-203 split on the first round of tax cuts last December. All Democrats and 12 Republicans—mostly those from high-tax states concerned about the cap on the deduction for state and local taxes—voted no.
Last year’s law made the corporate tax rate cut permanent but set individual tax cuts to expire after 2025. Republicans did that to comply with procedural and budgetary rules that allowed that law to get through the Senate without Democratic votes.
“It’s important we make that tax relief permanent for middle-class families and Main Street America,” said Rep. Kevin Brady (R., Texas), chairman of the House Ways and Means Committee. “These are driving the economy and giving people hope for jobs that frankly had given up hope for years. We’re seeing the impact of a new tax code every day in nearly every community.”
The bill set for a vote Friday would extend the important changes to the individual tax code. Those include the larger standard deduction and child tax credit, expanded estate-tax exemption, lower individual tax rates, the cap on the state and local tax deduction and a 20% break for businesses such as partnerships and S corporations.
“We know, politically, getting it all across this finish line this fall would be a tough task,” said Brad Close, senior vice president at the National Federation of Independent Business. “The new tax law has been a very big positive for small business and we really just want to see it made permanent.”
The bill would reduce federal revenue by $631 billion over the next decade, but the full effect is much larger because so much of the tax cut would be felt beyond 2028. The bill would generate enough economic growth to pay for 14% of that cost in the first decade, according to the nonpartisan congressional Joint Committee on Taxation.
But in the long run, because of increasing budget deficits, the bill would shrink the economy compared with doing nothing, according to the nonpartisan Joint Committee on Taxation, though the report notes the difficulty of long-run forecasting.
“There is substantial uncertainty arising from how future Congresses, foreign governments, and investors will react to growing deficits,” the joint committee wrote in its analysis this week.
Economically, Republicans have plenty to tout about last year’s tax cut. Millions of middle-class households are getting tax cuts. Corporate balance sheets are strong. Growth has been solid. Unemployment is low. Investment is up.
That data have made the law popular among Republicans and business executives, but that hasn’t translated into broad public support. A Fox News poll in August found 40% of Americans with a favorable opinion of the law and 41% with an unfavorable view.
In criticizing the law, Democrats have pointed to a boom in corporate stock buybacks and the lack of significant growth in real wages. The Democrats also say Republicans will use the budget deficits exacerbated by the tax cuts to justify cuts in Social Security and Medicare.
“As Republicans have often demonstrated, they are committed to cutting more taxes for the rich, fretting when deficits rise, and then attacking crucial programs American families rely on,” said Rep. John Yarmuth (D., Ky.).
—Anne Tergesen contributed to this article.
Write to Richard Rubin at richard.rubin@wsj.com