The Senate Finance Committee continued processing numerous Democratic amendments to the Tax Cuts and Jobs Act (H.R. 1), while also fending off the minority party’s concerns about increasing individual tax burdens, in hopes of voting on the bill’s final passage sometime late November 16.
Finance Committee ranking minority member Ron Wyden, D-Ore., during his opening remarks, sought information on the updated distributional table for the modified chair’s mark provided by the Joint Committee on Taxation (JCX-58-17). He pointed out that nearly all middle-income families earning under $75,000 would see tax increases beginning in 2027, while some low-income families earning between $10,000 and $30,000 may see increases as early as 2021.
Republican Finance committee member Rob Portman of Ohio rebutted Wyden’s claims, suggesting that those numbers reflect how the individual side of the proposal sunsets because of budget constraints. He pushed committee Democrats to offer an amendment to waive the budget rule and make those reforms permanent.
Committee member Debbie Stabenow, D-Mich., argued that low-income families would not reap any benefit from the increased $2,000 child tax credit under the modified chair’s mark because the credit refundability remains at $1,000, indexed for inflation. Senate Republican Whip John Cornyn of Texas responded that those households earning about $30,000 have no tax liability under current law, and would have none under H.R. 1.
Finance Committee Democrats also called out their Republican colleagues for planning a closed-door conference with House Republicans after the majority votes to report the bill out of the committee.
The chair's modified mark of H.R. 1 would eliminate the penalty under the Affordable Care Act's individual healthcare mandate and set an expiration date on almost all the individual tax provisions, among other changes.
GOP Plows Through Amendments
At press time, Democrats had offered more than 25 amendments that failed on a party-line vote 12 to 14. It remained unclear whether the Finance Committee would finish marking up the modified chair’s mark later that evening, or finish on November 17. According to a document obtained by Tax Analysts, Democrats planned to offer more than 50 amendments dealing with a host of issues, including language to curtail some corporate tax benefits and preserve other individual incentives.
The first amendment that Wyden offered would have changed H.R. 1 to make the individual side of the bill permanent and the corporate tax structures temporary. Wyden argued that individuals need more take-home pay to “drive the economy.”
Several Republicans expressed interest in an amendment to make the individual reforms permanent by waiving the budget rule that prevents legislation from adding to the federal deficit beyond the 10-year window, rather than by altering the entire bill. Sen. Mike Crapo, R-Idaho, told reporters there would be broad support for the amendment, noting that if it were not adopted on the Senate floor, it would likely be because of additional stipulations, similar to the language in committee.
Committee Chair Orrin G. Hatch, R-Utah, however, objected to Wyden’s amendment, claiming that it aims “to take down the mark,” not to improve the legislation. “I hope the ranking member and other Democrats on the committee will help us down the line to make our middle-class tax cuts permanent,” he said.
Sen. Patrick J. Toomey, R-Pa., echoed Hatch’s remarks, recommending that the business side remain permanent, but he also said both parties should continue to work together on the Senate floor to “make the individual side permanent.”
Off-Committee Republicans Remain Reserved
Sen. Ron Johnson, R-Wis., who announced his opposition to the tax bill November 15, offered more details to reporters about his objections to the proposal.
“I’m getting a lot of support from people who understand [this issue]. I don’t want to start talking about a fix until we really define the problem and know how much we’re going to need to solve the problem,” Johnson said. “The first imperative, truly, is making every American business globally competitive . . . but by doing that we have to maintain the competitiveness and balance between businesses domestically as well. That’s my concern. That’s what we’re trying to work on.”
Johnson said the treatment of passthrough businesses under the House and Senate versions of the bill leaves too many entities behind. “Both of them are inadequate; they address it from different vantage points. They use very blunt instruments to try and solve the problem. The big problem is we’re treating business income differently between different types of entities,” he said.
Johnson said his proposal to treat all business income the same has already been rejected by Senate GOP leadership.
Johnson also commented on the “pretty fast” closed-door process for the legislation, saying that he is “not a fan of how” Congress is progressing on tax reform. He pointed to the failed healthcare reform exercise as another example of this approach. As a caveat, Johnson noted that the Trump administration has been “extremely cooperative” in working on the passthrough issue with his staff.
However, the White House signaled otherwise. Asked whether President Trump offered any concessions to Johnson during their recent meeting, White House Press Secretary Sarah Sanders said he did not, and that it was up to the Senate members to work out disputes among themselves. Sanders added that Trump “did encourage [Johnson] to get on board and support the tax reform package.”
Sen. Bob Corker, R-Tenn., told reporters that he has yet to offer a position on the Senate tax bill, but he does have concerns about how it might affect the federal deficit. He also suggested that he may offer amendments to the bill on the floor pertaining to the bill’s impact on the deficit.
“My only focus here is on the global aspect — whether it’s good for our country or not,” Corker said.
Jonathan Curry contributed to this article.
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