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House Releases $81 Billion Supplemental

Totaling $81 billion, the supplemental spending bill (HR 4667) released Monday evening is $37 billion more than the $44 billion the Trump Administration requested in mid-November. As supplemental appropriations, the money is designated as emergency spending, which does not require offsets under congressional budget rules. The White House included a list of offsets, which can be found here.

If approved as is, this latest disaster aid bill would bring the emergency spending total to $132.75 billion this year — significantly surpassing the $60 billion spent in the aftermath of Hurricane Sandy and the $120 billion appropriated after Hurricane Katrina.

The bill includes:

  • $27.6 billion for the Federal Emergency Management Agency
  • $26.1 billion for Community Development Block Grants for disaster recovery
  • $12.1 billion for the Army Corps of Engineers
  • $3.8 billion for agriculture recovery
  • $2.9 billion to assist schools in affected areas to rebuild and refurbish
  • $1.6 billion for the Small Business Administration disaster loan program
  • $1.5 billion to repair military facilities
  • $1.4 billion for damages to federal highways
  • $600 million in economic development grants

The bill includes language that would allow individuals who have lost property to wildfires to deduct damage costs on their taxes, would remove the penalty for withdrawing money from a retirement account and would incentivize donations to people and regions rebuilding after wildfires.

House leadership has not yet announced whether the supplemental aid package will be added to the stopgap spending bill (H J Res 124) heading to the House Rules Committee on today and the House floor after that.

Current stopgap funding  expires Dec. 22.

House Passes Tax Bill; Senate Action Awaits

Earlier this afternoon, the House passed H.R. 1, the Tax Cuts and Jobs Act, by a vote of 227 to 205. A total of 13 Republicans joined every Democrat in opposing the bill.

Even as the House was considering its bill on the floor, the Senate Finance Committee has been debating its version of the measure since Monday.  Late on Tuesday, the committee leadership decided to add a provision that would repeal the individual insurance mandate currently in law as part of the Affordable Care Act.  Sen. Ron Johnson (R-WI) announced his opposition to the bill yesterday, making the Republican leadership’s current vote margin on the bill even smaller.

The goal of the proponents of this effort is to get a bill signed into law by the holidays.

Tax Cuts and Jobs Act

The House Republican Leadership unveiled their much-awaited Tax Cuts and American Jobs act.

At first glance, the measure would:

  • cut the corporate tax rate to 20%;
  • reduce the seven individual tax brackets into four;
  • nearly double the standard deduction to $24K (married), $18,300 (head of household), and 12,200 (single);
  • increase the child care tax credit to $1,600 (from $1000);
  • change the mortgage interest deduction to apply to house loans up to $500,000 on new home purchases while existing homes would be grandfathered;
  • repeal the student-loan interest deduction;
  • private universities with assets exceeding $100,000 a student would pay a new 1.4% excise tax on their net investment income; and
  • businesses would no longer be able to deduct entertainment expenses, though today’s rules for business meals would remain.

The charitable deduction will not change, and the tax provisions related to 401(k)s are unchanged.

The bill text is here.

A section-by-section of the measure is here. 

Federal Relations is still going thought the measure and will continue to provide updates.

This Week: CHIP and Taxes

The House and Senate are back this today for what will be the long slog until Thanksgiving. There’s a ton of to-do items on the agenda, including tax reform, raising the debt ceiling, FY 2018 appropriations, the annual National Defense Authorization Act (NDAA), and the list goes on. The focus for the House this week will be extending the Children’s Health Insurance Program (CHIP), while the Senate will continue on more judicial nominations. Both Houses will begin to turn efforts into tax reform.

The House is set to unveil their version of a tax reform bill on November 1 and a mark up in committee shortly thereafter.  Tentatively, this means, the House could consider the measure on the Floor during the week of the November 6. After passage, the measure would move to the Senate the week of November 13 for mark-ups in the Senate Finance and Energy and Natural Resources Committees and floor consideration during the week of the 20, which is Thanksgiving Recess. Per the agreed expedited process, the tax measure would be considered as a reconciliation bill, so it would only get 20 hours of debate and a vote-a-rama — it could be considered in three days.  While this schedule is incredibly ambitious, this framework is the working schedule as of now.

The House— one month after funding for the CHIP has lapsed — is gearing up for a vote on extending funding for the federal program, which insures nine million children in the US. Both parties have been negotiating for weeks. Earlier this month, the House Energy and Commerce Committee approved a measure to fund CHIP for five years with zero Democratic support. Democrats opposed cutting dollars from Obamacare’s public health fund to pay for the measure — so it wasn’t sent to the floor for a vote. However, the GOP is now moving forward as the clock keeps ticking: several states are slated to run out of CHIP money in the next few weeks.

Meanwhile, at the other end of Pennsylvania Avenue, ehe Administration is set to announce a new Federal Reserve Chair this week and keep up the drum beat on opioids, but the Mueller investigation might make that difficult.

Stay tuned.