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News and updates

House Agrees to Senate Budget and Tax Guidelines

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Today, the House adopted the Senate-passed FY2018 budget resolution, H. Con. Res. 71, that would lay down the foundation for tax cuts.  While a budget resolution is traditionally used to set up the broad parameters for spending for a given fiscal year, this year’s resolution is being used as a vehicle to set up procedures to move changes to the tax code. The measure passed by a vote of 216-212 and allows allows for fast-track consideration of tax overhaul legislation, without being subject to filibuster in the Senate.

Assuming that the budget resolution would pass, the House leadership announced earlier this week a draft tax measure would be unveiled next week pending the approval of the budget in the House. With passage, the House Ways & Means Committee, which has jurisdiction on all revenue raisers, is on track to release their tax bill as early as November 1.  What the House’s reformed package will contain is still a moving target. There have been many issues raised with proposed cuts and offsets to such a measure — the most recent issue is the State and Local Tax (SALT) deduction. Eliminating this deduction has been a big issue for Republicans in blue, high-tax states, such as New York and California, who want to preserve the deduction. Other recent issues include limiting the 401(k) pretax contributions, expanding the child care tax credit, and including Unrelated Business Income Tax (UBIT) as an offset for tax cuts.

Stay tuned.

 

 

 

 

Budget and Taxes

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The Senate passed its FY 2018 budget by a vote of 51-49 on last night. The passage is a key step to Republican hopes of creating and passing any tax overhaul measure through Congress along party lines in the coming months. Senator Rand Paul (R-KY) was the lone Republican dissenter. Behind the scenes, GOP leaders have already hammered out an agreement to reconcile the differences between the House and Senate budget resolutions, likely negating the need for a formal conference and giving Republicans more time to focus on tax reform before the end of the year.

The Senate adopted a package of House-requested tweaks Thursday night, teeing up the budget resolution for House passage as soon as next week. Both chambers need to pass identical budgets in order to allow Republicans to use the fast-tracking tool for tax reform that permits them to bypass a Democratic filibuster in the Senate. As part of the deal, the House will have to accept the Senate’s plan to add $1.5 trillion to the deficit via tax reform after the lower chamber’s budget initially demanded a deficit-neutral tax plan.

If the Senate resolution can be passed in the House – potentially as soon as next week – it would eliminate the need for a conference agreement or other negotiations to resolve differences between the chambers, and the need for reconsideration of the resolution in the Senate. That would accelerate the process for tax reform given that House leaders have said a tax bill will not be released and processed until the budget is completed. President Trump has urged House members to accept the Senate budget resolution to avoid a conference, and the President will head to the Hill next week to talk to the Senate on a path forward with tax reform.

 

 

Senate Begins Debate on Budget Resolution

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The Senate has begun its floor debate on the FY2018 budget resolution. As mentioned previously, although usually used to determine parameters of federal spending, this year’s package contains a set of procedures that would enable the chamber to adopt a tax package by a simple majority.

With all Democrats expected to oppose it, one Republican Senator currently back home for health reasons, and a number of other members of the party expressing reservations about certain parts of the legislation, it is not yet certain that the Republicans have the votes for its passage.  A long list of votes on amendments is expected between now and the final vote on passage, which could take place on Thursday.

Marino Out as Drug Czar

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A Washington Post/“60 Minutes” investigation, which aired this weekend, examined Rep. Tom Marino (R-PA) efforts to guide legislation that weakened the Drug Enforcement Administration’s ability to go after drug distributors, even as opioid-related deaths continue to rise.

Marino was the Administration’s nominee for the position of Drug Czar. He has withdrawn his name from consideration.

President Trump has also promised a major announcement about opioids next week.

Senate Expected to Take Up FY2018 Budget Resolution

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The full Senate is expected to take up this week its FY2018 budget resolution.  The House cleared its version earlier this month.

While the budget resolution usually lays out the budget parameters for a given year, the primary goal of the FY2018 budget resolution is to set up for procedures that would allow Republicans to pass a tax reform package with the minimum number of votes.  The House adopted resolution would also allow for a similar process.

While Republicans are united in their push for a big tax package, there is disagreement on several issues associated with such a measure, including whether a tax-cut bill should increase the debt.  Read more here and here.