President-elect Trump faces demands from House Republicans to resolve disagreements between the two chambers over how Republicans should begin tackling the issue.
As some House Republicans consider introducing a tax-focused reconciliation bill, members of the conference are looking to President Trump to set the tone.
“Ultimately, and quite intuitively, the president is going to ask questions on this issue and say we have to do two or one thing. There's not much said beyond that. [it] Smith,” said Rep. Kevin Hahn (R-Okla.), referring to Ways and Means Committee Chairman Jason Smith (R-Missouri).
Smith opposes the incoming Senate leadership's plan to split the Republican legislative agenda into two separate reconciliation bills. The first is on border policy, on which Republicans are largely aligned, with tax action to follow in late 2025.
The tax reform includes several issues that have already been controversial within the chamber, including caps on state and local income tax (SALT) deductions and which parts of the Biden administration's climate change law should be repealed. . The process is further complicated by President Trump's promise of further personal tax cuts.
Passing border and energy bills first could allow Republicans to show voters early policy results ahead of the midterm elections. But doing so could force Republicans to scale back their tax cut ambitions in order to pass a deal before key parts of the 2017 Tax Cuts and Jobs Act expire.
Now, House Republicans say they want some guidance on how to proceed.
“[We] I'm looking forward to seeing what President Trump has to say about that, because that's what we're going to do…whether it's one bill or two. The bottom line is that what the president believes is the best path to success is what we're trying to do,” Rep. Drew Ferguson (R-Ga.) said Wednesday. .
Rep. Mike Kelly (R-Pennsylvania), a member of the House Ways and Means Committee that handles tax policy, also spotlighted President Trump.
“There are so many things about what happens. [next] “That's a conversation to have with the next president of the United States,” he said.
President Trump signaled earlier this week that he is interested in advancing a tax bill in his first 100 days in office, but he has not said whether there will be one or two bills.
“I have a tax cut,” he told NBC's Meet the Press on Sunday. “As you know, we're going to submit a tax cut extension to Congress in either the first or second round. So there's a good chance it's there. Or it will come sometime after that. ”
Meanwhile, some House Republicans are pushing the tax bill, breaking with soon-to-be Senate Majority Leader John Thune (R.S.D.)'s plan to focus on border security and energy production. They are against doing it first. invoice.
“The Trump tax cuts were so beneficial to my constituents that I would like to see them all come together,” Rep. Joe Wilson, R-S.C., said Wednesday night.
Rep. Frank Lucas (R-Okla.), a member of the House Financial Services Committee, said he has observed differences in the approaches of tax officials in the House and Senate.
“This is a tactical difference between the House Ways and Means Committee leadership and my friends on the Senate side, the Senate Finance and leadership over there,” he said.
Tax leaders on the House's powerful Ways and Means Committee are particularly enthusiastic about tax cuts centered on extending specific provisions of the TCJA. The bill's personal income tax rate cut expires at the end of 2025, meaning Americans could face higher taxes ahead of the midterm elections if not extended.
“Ideally, we'd like to do the tax thing first, because we can't let it set,” said Rep. Vern Buchanan (R-Fla.), chairman of the Ways and Means Committee. “[Chairman Smith] I want all tax matters to be done in advance. ”
“We may not be able to reach second place,” he added.
Asked whether the Republican legislative agenda could have been better carried out across two separate pieces of legislation, Rep. Adrian Smith (R-Nebraska) told The Hill he was unconvinced.
“I’m not quite there yet,” he said. I prefer singleness, but I'm sure we'll be united in the end either way. ”
And not all House Republicans sit on the Ways and Means Committee.
The ultra-conservative House Freedom Caucus said Friday that Republicans should start with legislation focused on border security before moving on to tax and energy policy at the end of the year.
Republicans are largely in agreement on extending the 2017 tax cuts, but a number of additional tax cuts proposed by President Trump during the campaign have made the process more complicated.
President Trump would amend the SALT cap, make Social Security benefits tax-free, eliminate taxes on tips and overtime pay, eliminate double taxation for Americans living abroad, and create an auto loan interest deduction. , proposed creating a tax deduction for families. caregiver.
“I support a tax credit for family caregivers who are caring for a parent or loved one. Isn't it about time they get it too?” President Trump told Madison in October. He said this in a speech at the Square Garden.
He also proposes huge new tariffs, which even if enacted administratively, would not count toward deficit reduction.
The 2017 reduction deadline includes most personal income tax rates, the standard deduction, personal exemptions, child tax credit, charitable contributions deduction, state and local tax (SALT) deduction, mortgage interest deduction, and alternative minimum tax. Among other things.
According to one estimate by the Committee for a Responsible Federal Budget, tax cuts could increase the budget deficit by up to $15 trillion.
