On November 10, 1908, two days after the national election, the House Ways and Means Committee opened hearings on tariff revision, which lasted until the holiday recess on December 24.  Congressman Serano Payne of New York, chairman of the committee and House majority leader, joined Senator Aldrich and House Speaker Joe Cannon of Illinois in urging President-elect Taft not to intervene until the bill reached the House-Senate conference.  To the detriment of tariff reform, Taft largely heeded their advice, which coincided with his belief that a president should not take an active role in the legislative process.

The Republican Party had been strongly identified with support of protective tariffs since the 1880s, and so Taft distinguished himself from past Republican presidential candidates by calling for lower tariff rates.  In his inaugural address on March 4, 1909, Taft vowed to veto any bill that did not do so, and, in fact, almost seemed to endorse the Democratic position of tariffs for revenue only.  On March 15, he called the new Sixty-first Congress into special session to pass tariff reform and other legislation.  However, the president's message the next day was only a brief request that a tariff bill be enacted quickly so as not to interfere with other legislative business.

On March 17, Congressman Payne introduced his tariff bill, which was referred to committee.  Although a protectionist, Payne and his colleagues became convinced that some reduction in tariff rates was necessary to alleviate consumer hardship during the current period of high inflation.  Speaker Cannon, though, insisted that congressmen listen to the needs of businesses in their districts, so many tacked on rate hikes to the Payne bill.  Nevertheless, President Taft responded favorably when the House passed the measure, 217-61, and refused to threaten denying patronage to opponents of tariff reform, or threaten to veto an unsuitable bill.

In the Senate, the tariff bill became the virtual property of Aldrich, who was chairman of the Finance Committee and Republican majority leader.  The powerful Rhode Island senator had a long record of backing high protectionist tariffs.  In 1883, he jumped on the Congressional bandwagon that crushed an effort at genuine reform, producing a wreck called the "Mongrel Tariff."  In 1890, he was a leading force behind passage of the McKinley Tariff, which raised rates to their highest level in American history to that point (48%).  Four years later, he worked with other protectionists to undermine significant reform in the Wilson-Gorman Tariff, and then voted for the Dingley Tariff of 1897, which raised rates to an average of 46%. 

In the spring and summer of 1909, lobbyists for American industries had ready access to Aldrich and the Finance Committee in secret sessions.  Without explanation, Aldrich made nearly 900 changes to the Payne bill, including 600 rate-hikes, and tried to prevent tariff reformers from studying the details of the 300-page document.  In early July, the revised tariff bill passed the Senate, 45-34, over the objections of irate Republican reformers who publicly denounced Aldrich's strong-arm tactics.  President Taft, however, chose to take out his frustrations on the golf course, and he interpreted the verbal attacks on Aldrich as veiled criticism of himself.

To reconcile the two versions of the tariff bill, the House and Senate appointed members to a select conference committee, which Speaker Cannon and Majority Leader Aldrich stacked with a majority of protectionists.  In committee, Aldrich did concede to including a corporation tax in the final version, but otherwise would not budge on lowering rates further.  On July 30, the House passed the Payne-Aldrich bill, 195-183, with 20 Republicans breaking party ranks to join the nearly solid bloc of Democrats (all but two) who voted against the measure.  On August 5, the Senate passed the bill, 47-31, with ten Republicans casting "no" votes.

President Taft was pleased with the inclusion of a corporation tax, and satisfied that the overall tariff rate had been reduced to an average of 41%.  He had also scored an important victory when Senator Albert Beveridge of Indiana secured passage of Taft's suggestion of a permanent tariff commission to study rates and recommend changes.  Also, the president feared that vetoing the bill would further divide the Republican Party, so he signed the Payne-Aldrich Act into law on August 6. 

After resting for a month, President Taft left on a speaking tour in mid-September 1909 that took him to Boston, Chicago, Milwaukee, and other cities across the country.  At Winona, Minnesota, he described the Payne-Aldrich Act as "the best tariff bill the Republican Party ever passed," and said if the country really wanted free trade, then it could vote Democratic.  In 1910, campaigning on the issue of tariff reform, Democrats captured control of the U.S. House for the first time in fifteen years.  In 1913, with the strong backing of the new Democratic president, Woodrow Wilson, Congress passed the Underwood Tariff, reducing the overall rate from 41% to 27%.