Congressional Priority Pileup Slows Tax Reform Timeline

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By Laura Davison and Colleen Murphy

Republicans need to make sure “not to overload the end of the year” with overlapping priorities, because they need time to handle tax reform, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said.

Congressional leaders and President Donald Trump reached agreement about a package that would raise the debt limit, fund the government for three months, and include disaster-relief funding. This would delay the spending and debt-limit fight to December, when lawmakers could be making a final push on tax legislation.

Brady insists tax reform must happen this year, but final decisions will likely drag into December as funding battles clog up the fall. Negotiations are unlikely to continue past early spring 2018. Conventional wisdom holds that lawmakers will be hesitant to vote on a large tax bill so close to the midterm elections, especially one that could be contentious for many House Republicans.

GOP staffers have said privately that they are looking at what a year-end tax cut or tax extenders bill could look like, if a sweeping reform bill isn’t possible. Former Ways and Means Chairman Dave Camp (R-Mich.) said Sept. 6 in a Bloomberg TV interview that he doesn’t see a bill passing this year, but that something could reach Trump’s desk next year.

Calendar Chaos

Lawmakers left for the August recess with a busy fall calendar: Raise the debt ceiling, fund the government, pass a budget, and reauthorize federal programs, including the National Flood Insurance Program and the Children’s Health Insurance Program.

They returned Sept. 5 with more items looming: emergency funding for Harvey victims in Texas and Louisiana, the fate of the Deferred Action for Childhood Arrivals program, and potentially more emergency funding after Hurricane Irma, which appeared likely to devastate parts of Puerto Rico and Florida.

Passing a comprehensive tax bill by the end of the year was always a stretch. Republicans so far haven’t coalesced around a plan. Trump spoke at a North Dakota refinery Sept. 6 to sell his vision for tax reform, the second in a series of speeches aimed at gaining public support.

In the speech, he promised more details in two weeks and made an appeal that tax reform is for “the pipefitters and plumbers, the nurses and police officers, all the people like you who pour their hearts into every penny earned,” according to Trump’s prepared remarks.

Congressional leaders and White House officials are still hammering out a plan, which has some Republicans concerned that the opportunity for big tax changes could elude them.

“Well, I’m always the eternal optimist,” Rep. Chris Collins (R-N.Y.) told Bloomberg BNA. “But there is always the realist that says we didn’t get health care done.”

Important Steps

Members are also wary of decisions about which tax benefits will be tapped to raise revenue to fund lower tax rates. Provisions under discussion, including elimination of the state and local tax deduction, are already mobilizing resistance among lawmakers in high-tax states.

“I want to see what the pay-fors are,” Rep. Tom Cole (R-Okla.) said. “If it’s going to be revenue neutral and we don’t have the border adjustment tax and we don’t have savings from Obamacare, I want to see where they are going to find the money to get this done.”

Rep. Mark Sanford (R-S.C.), a member of the conservative House Freedom Caucus, said Congress has “a more than hectic legislative calendar for the month of September,” further complicated by the pressing need for disaster-relief funding. The challenge is exacerbated by the lack of details on a plan—something Freedom Caucus members have said they need before they can back the fiscal year 2018 budget resolution.

The budget resolution, which contains the instructions to pass a tax bill through a streamlined process requiring only 51—not 60—votes in the Senate, is facing resistance from both Freedom Caucus members who want to see the tax framework before offering their support and moderates who are uncomfortable with the spending cuts in the bill.

Budget Committee Chairman Diane Black (R-Tenn.) said she is counting members who support the budget and hopes to have an idea soon of where it stands so it can pass in the coming weeks.

“I hope that those numbers are so good that we just count it and we can put it on the schedule for next week,” Black said.

(Updated to correct name of Children's Health Insurance Program)

With assistance from Jonathan Nicholson in Washington.

To contact the reporters on this story: Laura Davison in Washington at ldavison@bna.com; Colleen Murphy in Washington at cmurphy@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

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