Details of the framework for reconciling the House and Senate versions of the Tax Cuts and Jobs Act are still being negotiated, but congressional Republicans have reached an agreement in principle, Sen. John Cornyn, R-Texas, told reporters.
Cornyn’s remarks came as House and Senate conferees met in a conference committee December 13 to discuss differences in their respective versions of H.R. 1, which Republican lawmakers intend to send to President Trump before the end of 2017.
Aides close to the negotiations said the agreement sets the corporate tax rate at 21 percent and establishes a 20 percent deduction for passthrough businesses. Republican members of the House-Senate conference committee have also agreed to cut the top individual income tax rate to 37 percent and allow interest to be deducted on new mortgages on homes valued up to $750,000, according to media reports.
Provisions like the increased corporate rate and the reduced top individual rate are being modeled, said Rep. David Schweikert, R-Ariz., but he cautioned that there’s still room for changes in the package.
“Trust me, it’s not done until it’s done, because there’s still lots of interactions to be calculated,” he said. “I promise you there will be some interaction somewhere saying we [have] got to come back and adjust this and adjust that.”
Senate Finance Committee Chair Orrin G. Hatch, R-Utah, told reporters that he thinks lawmakers are still working to reach a consensus on the treatment of the state and local tax deduction.
“I don’t know if any decision has been made on that,” Hatch told reporters. “I think we’ll have to work on that problem.” He added that it is “a little early to tell” which chamber’s approach on passthroughs will be adopted.
Quick Votes Expected
Republicans are expected to release a conference report by December 15, and then lawmakers and members of the public will be able to examine the bill, House Ways and Means Committee Chair Kevin Brady, R-Texas, said during the conference committee meeting.
“The timetable will be driven by completion of the conference committee report,” he said.
Brady said after the meeting that lawmakers are still working on multiple issues. “Any final agreement will be reflected in the conference committee report. We expect that to occur at the end of the week,” he said, declining to comment on areas of common ground.
House and Senate Democrats complained that they have been kept out of the loop about GOP decisions, but Brady said Democrats will be able to show their disapproval of the report by choosing not to sign it. He said no lawmakers will be allowed to offer amendments before the conference report is released.
Ways and Means ranking minority member Richard E. Neal, D-Mass., asked Brady to postpone the conference committee meeting until Doug Jones, the Democrat who prevailed over Roy Moore for Alabama’s open Senate seat, is sworn in at the start of 2018. Neal cited the Democrats’ decision to postpone votes on the Affordable Care Act in 2010 until then Sen. Scott Brown, R-Mass., was sworn in after a special election.
A House GOP aide told Tax Analysts that “negotiators are close, but it's not quite done yet,” suggesting that while there are still details to be resolved, “we're still on track to be done this week.”
Lobbyists also expressed skepticism that a deal has been finalized. “I'd caution anyone who says this is ‘over,’” one GOP tax lobbyist told Tax Analysts. “They may be scoring high-level items, but this is far from . . . being finished and there’s a lot of work still going on behind the scenes.”
Another tax lobbyist said conferees are waiting on final scores from the Joint Committee on Taxation so they can make final decisions by the end of the day.
Republicans would prefer to finalize the bill’s language tonight, go through the process of ironing out parliamentary problems, and then file the conference report on Friday, the lobbyist said. A Senate vote on the measure is likely to come December 19, with the House voting on the bill the next day.
Democrats Left Out
Democrats on the conference committee argued that it does not make sense for members of the conference committee to ask Joint Committee on Taxation Chief of Staff Tom Barthold questions on the House and Senate tax bills that were passed by each chamber instead of on the alleged Republican agreement.
“Minutes after they have announced that they have an agreed bill, we don’t have that bill here,” House Ways and Means Committee member Lloyd Doggett, D-Texas, said in his opening remarks. “We’re told to make speeches and ask questions to [the] Joint Tax [Committee] about a bill they have but they’re not disclosing. We’re to ask questions about a bill that was, but may not be, currently the bill.”
Senate Finance Committee ranking minority member Ron Wyden, D-Ore., shared that sentiment.
“We’re not going to get a chance to ask questions about $10 trillion worth of tax changes in a real bill,” Wyden said.
Push for Tax-Exempt Bonds
As discussions continue, lawmakers continue pushing to save provisions that have been placed on the chopping block.
One Texas lawmaker argued in favor of private activity bonds, saying they play a role “with the right oversight” to help disaster-ridden constituencies finance recovery efforts.
Rep. Randy Weber, R-Texas, told Tax Analysts that he hopes some sort of private activity bonds will be maintained in the tax bill, and that he expects to speak with Brady soon on the issue. Weber said he would like to see language to designate private activity bonds for “all the disaster-declared counties.”
“If you’re going to give private activity bonds to businesses to come in at little to no cost to the government except for the tax revenue, I would argue this: if those companies go away, what kind of tax revenue is that? Zero,” Weber said.
Brady told reporters that conversations about including private activity bonds in the legislation are ongoing, but that no final decision will be announced until the conference report is released.
“We’ve heard a lot of good discussion in support for private activity bonds, so that’ll be a part of the conference report,” Brady said.
Another outstanding issue is the treatment of the deduction for medical expenses.
Rep. Tom MacArthur, R-N.J., told reporters he is hopeful that the medical expense deduction will make it into the conference agreement, “but it’s not settled yet.”
“Until the bill is final there’s a lot of moving pieces, and everything has to get paid for,” MacArthur said.
Stephen K. Cooper, David van den Berg, and Zoe Sagalow contributed to this article.
Follow Asha Glover (@AshaSGlover) and Dylan F. Moroses (@DMoroses3244) on Twitter for real-time updates.