The much-anticipated tax overhaul bill out of the House Ways and Means Committee was to be unveiled today, until Ways and Means Chairman Kevin Brady (R-TX) announced a one-day delay on Halloween night. Text of the bill is now planned for release on November 2, with the Committee scheduled to vote on the bill the beginning of next week.
Should the language be approved, the House and Senate will have to act fast in their attempt to pass the bill before the holidays. On the one hand, the Congress’ recently passed budget resolution allows the Senate to employ reconciliation – requiring only a simple majority of votes to make tax reform a reality. On the other hand, several Republicans in high-tax states are wary of losing certain tax deductions and their concerns have been the focus of recent negotiations. Deficit hawks in the Republican camp will prove to be another hurdle for tax reform, which has potential for greatly increasing the deficit (24 House Republicans voted against adopting the Senate’s budget resolution which allows for a $1.5 trillion deficit increase over the next ten years).
While the Low Income Housing Tax Credit appears safe from repeal, its important to remember that tax cuts could negatively affect the efficacy of the credit, making improvements for the credit essential. The same safety from repeal was also not guaranteed for the Historic and New Markets Tax Credits. The next several weeks will be critical for industry advocates to contact their elected officials to urge their support for the LIHTC, New Markets Tax Credit and Historic Rehabilitation Tax Credit.
October 30, 2017 — The US Senate and House of Representatives have both narrowly passed the Senate’s version of the FY-2018 Budget Resolution by 51-49 and 216-212 vote margins. The resolution paves the way for the Congress to pass tax reform legislation through reconciliation, a budgetary tool that allows the Senate to pass legislation with 50 votes. The budget allows the federal deficit to increase by $1.5 trillion over the next ten years. Democrats unanimously opposed the resolution in both the House and Senate.
House Ways and Means Chairman Kevin Brady (R-TX) has indicated his committee will publicly release text of the Committee’s tax reform legislation on Nov. 1, with a mark-up scheduled the following week and a House floor vote the week of November 13. The Senate Finance Committee is expected to consider the House legislation on the week of November 13 as well. The announced schedule for consideration is very aggressive and passage is by no means assured, even within the Republican Caucus, where several members have expressed concerns about the increase in deficit spending as well as the potential elimination of state and local tax deduction.
October 5, 2017 — October 5th proved an active congressional day in both the House and Senate regarding the Budget Resolution. The House passed its resolution by a narrow margin of 13 votes (219-206), with 18 members of the fractious House GOP joining Democrats in voting against the measure. Regardless, the result leaves Republicans one step closer towards reaching a friendly environment for tax-reform.
Meanwhile, the Senate’s budget committee approved its draft resolution 12-11 along part lines. Eyes will now be on the Senate floor, where at least 4 Republican Senators remain undecided on the resolution. The Senate can only afford to lose two Republican votes if it wants to pass a budget resolution.
If the Senate cannot pass its resolution, a tax reform bill will require support of at least some Democratic Senators. If the Senate is able to pass a budget resolution, the next challenge will be whether House and Senate Republicans can come to an agreement on a concurrent resolution. If they are successful, Congress will be able to utilize reconciliation, allowing the Senate to pass a tax reform bill along party lines.
October 4, 2017 — The House this week began debate over its fiscal 2018 budget resolution. While Tax Reform is a large task for Congress to take on, passing a concurrent resolution over the next month will be a critical first step in making tax reform more plausible for the coming year.
Each year, budget committees in both the House and Senate produce versions of a budget resolution for the upcoming fiscal year. The resolution is not a law, but instead serves as a set of guiding principles in regard to federal spending and revenue for the upcoming fiscal year.
If the House and Senate both pass resolutions, the two chambers will work towards a concurrent budget resolution. A concurrent resolution would grant the Senate the ability to approve a tax reform bill with a simple majority vote – doing away with the need for any democratic buy-in. If the chambers are unable to agree on a concurrent budget resolution, the Senate will have a much harder time passing tax reform (a lesser task for the House, where Republicans enjoy a much larger margin).
Even though the House and Senate are both Republican-controlled, a concurrent budget resolution is no guarantee. Resolutions from the two chambers have shown significant differences. For one, the House resolution requires a tax plan which doesn’t add to the deficit, while the Senate’s resolution allows for up to $1.5 trillion of additional debt over the next ten years. The Senate’s version also calls for level defense funding over the next few years, while the House proposes steep increases in defense spending.
While the House is two days in on floor debate, the Senate resolution has yet to leave committee. The Senate Budget Committee began markup today of its resolution and has another day of markup planned for tomorrow. The Senate is expected to begin floor debate of its resolution in the next 2-3 weeks.
