Tax lobbyists worry that long-awaited tax reform could be in jeopardy if Congress uses the first settlement to boost funding for immigration and border security.
The tax cuts signed into law by President-elect Trump in 2017 will expire at the end of next year. Lobbyists already believe that passing tax reform is likely to take longer than Republicans initially hoped, and that if Republicans choose to hold up their tax plan to push for reconciliation. It may take more time.
“Delaying is killing,” warned Grover Norquist, founder and chairman of Americans for Tax Reform, which opposes tax increases. “And all it takes is one bad car accident or some interesting scandal and the Republicans no longer have a majority in the House.”
The budget reconciliation process allows Republicans to bypass a potential Democratic filibuster in the Senate and pass the bill with a simple majority in both chambers.
In that case, House Republicans would need near-unanimous support to pass the bill along party lines, but that narrow majority would include a small but vocal group of budget hawks that could cause problems. is included. Some House Republicans in New York and New Jersey are also pushing for expanded state and local tax deductions in separate bills, which could pose a challenge for the rest of the session.
Senate leaders want to start at the border.
Taxes are a top priority as the deadline approaches, but Senate leaders earlier this month prioritized policies focused on border security before crafting a tax plan and passing a second reconciliation bill. I suggested that.
A source close to Republican Senate leadership told The Hill that while there are discussions about what to include in the package, they are still “trying to figure out what the process is to accomplish all of these goals.” he said.
Incoming Senate Republican Leader John Thune (RS.D.) said, I want to bring about “big wins early on.” If you cross the border first unprepared, it will take longer to get both bills together.
“Reconciliation is a two-step process,” said Rosemary Becchi, a former tax adviser to the Senate Finance Committee and current shareholder at law and lobbying giant Brownstein, Hyatt, Farber, and Schreck. The committee will begin work.”
“There's going to be debate and dialogue and things like that, and that's going to take time. If we get stuck on a particular point, it just postpones the next step in the process,” he added of the tax bill. “You're not writing from scratch, but new questions and new things will come up in the process.”
Small House Majority Could Mean Big Problems
President Trump did not sign the 2017 tax bill Until December 22ndIt's been almost a full year into his first term since Republicans first tried to pass an Obamacare repeal bill.
Although the Republican majority is now much smaller, Republicans will need to find a way to extend the expiring provisions and incorporate President Trump's campaign promises, such as eliminating taxes on tips and Social Security, but by doing so could raise prices and risk stripping key budget hawks of their votes. .
A spokesperson for Mr. Thune, who outlined his two-pronged plan earlier this month, said in an interview with conservative commentator Hugh Hewitt last week that “failure is not an option as far as taxes are concerned.” I pointed this out to The Hill.
“What I have proposed is a pathway to advance the president's policies and secure early, big wins that are critical to our national security.” Tune said.
Mr. Tune told Mr. Hewitt, “The goal is to [taxes] We'll have it done by summer.'' Hewitt used the opportunity to “lobby'' Thune to pass the tax cuts “early.'' Norquist also emphasized the importance of passing tax extensions quickly to give businesses enough time to plan.
“If you're a small business owner trying to decide whether to invest and you don't know if it's going to be an expense a year from now, don't invest now,” Norquist says.
Still, proponents of a two-track settlement plan argue that separating taxes and border funding reduces the risk of one big package submerging both priorities.
But Norquist insisted on including the 2017 tax extension in the border adjustment bill because “these are not new ideas.”
“There are no secret problems that you will encounter,” Norquist argued.
But Thune told Hewitt that passing parts of the tax bill in the first settlement could make negotiations in the second settlement more complicated.
“I think if you do that part early on, it makes it more complicated to get the rest later on, because there's a lot of give-and-take and trade-offs in this fight. ,” Thun said.
There are rifts among Republicans on Capitol Hill over how to use budget reconciliation to tackle the border and taxes, and the GOP's House majority is much smaller this time around than it was in 2017.
Lawmakers are also struggling to find common ground on a resolution to continue funding the government with less than a week until the funding deadline.
Leaders were expected to release the document over the weekend, but those hopes were dashed after economic aid for farmers derailed bipartisan talks and sparked a blame game across the aisle.
President Trump's position is unclear
President Trump has not wavered, at least in public.
Incoming Senate Budget Chairman Lindsey Graham, R.S.C., and Trump's deputy chief of staff for policy, Stephen Miller, are both urging Congress to address border security funding first. .
But Rep. Jason Smith (R-Missouri), chairman of the House Tax Law Committee, said: broke the plan as “reckless.”
“If they go through that process, I think it creates an opportunity for all Americans to raise taxes,” Punchbowl News said.
Larry Kudlow, who chaired the National Economic Council during Trump's first term, suggested last week that Thune and Miller were ahead of the curve in pushing for non-tax reconciliation legislation.
“John Thune was a little bit ahead of the curve. My friend Steve Miller in the White House was a little upset about this because the bosses haven't looked into it yet.” said Kudrow. he told Fox Business..
President Trump's press secretary did not respond to The Hill's request for comment on his position.
The narrow Republican majority in the House remains an obstacle, especially for a group of fiscal hawks pushing for cuts in federal spending.
House Freedom Caucus sent a letter Last week, he wrote to House Speaker Mike Johnson (R-Louisiana) urging him to first work on a “completely offset, focused and rapid border reconciliation package.”
“President Trump's agenda will pass, and we must move forward on border security first, followed by a second, larger package that targets taxes, spending, energy, bureaucracy, and more,” the House Freedom Caucus board said in a statement. We should move forward with a reconciliation bill.”
While Johnson has announced that he was open It remains to be seen whether multiple reconciliation bills will be passed, and whether the chair will support the president-elect's representative or his own committee chair.
But despite the threat of infighting, tax lobbyists don't expect Republicans to push past the deadline, even though they expected them to work on the bill this time next year.
“We're talking about massive tax increases on individuals, so there's no way any member of Congress can go home next December without addressing the extension. There's no chance,” Becchi said.
