Weekly Legislative Update - October 23, 2017
We've attached an updated statement we gave Ways and Means last May so you and others can use it as a reference in making our case for permanent WOTC.
Consider distributing it to educate clients and branches in states where you have operations. Lobbying targets in those states are named in our recently-issued Fifty-State Lobbying Plan. Give priority to Ways and Means and Finance Committee members in choosing lobbying targets.
At minimum, your client and branch workhorses should fax the model letter, in their own words, to the target congresspersons as soon as possible, followed no more than a week later by a phone call to the target's office to speak to the tax legislative assistant.
Advise your people to explain their interest in WOTC and ask the tax LA how things look for continuation of the program because, "in our experience it's the best way to help people on welfare get a job and work their way up." Consider using the line, "We ourselves won't be hurt because we'll be getting a tax cut, but we know a lot of people who'll be hurt because there won't be jobs going to welfare people or those who didn't finish high school or have other problems-those jobs will go to better qualified applicants and people who need help the most will be left behind."
Turning now to current status of tax reform, the House has passed its budget resolution for fiscal year 2018 with reconciliation instructions calling for revenue-neutral tax reform.
The Senate Budget Committee approved its budget resolution with a reconciliation instruction calling for net $1.5 trillion in tax cuts over ten years, which implies adding $1.5 trillion to the deficit. The Senate is now debating the resolution and Republican leaders hope to pass it, without help from Democrats, tomorrow.
A budget resolution requires only a simple majority-51 votes in the Senate-to pass. The vote will be close as Republicans hold 52 seats and can't afford to lose more than two votes. (The vice president will break a tie.)
Under the Budget Act, reconciliation for tax reform takes effect when Senate and House agree on a joint budget. Budget Committee chairs Enzi and Black, Finance Committee chair Hatch, Ways and Means chair Brady, Speaker Ryan, and Majority Leader McConnell will produce a bicameral deal after the Senate resolution passes. If it doesn't have the votes, the schedule for tax reform will be slip.
Treasury Secretary Mnuchin and the President will be active because there may be trouble passing the final joint resolution in the House. Democrats are opposing reconciliation and piling on debt to fund a tax cut, so any joint resolution will have to pass with GOP votes alone, requiring President Trump to call on GOP holdouts to not delay tax reform.
If the 35-member Freedom Caucus sticks together, they can prevent the joint resolution from passing. They may try to get the Speaker to agree to their demands as a condition for their support. But Ryan has his own red line, and there could be an impasse until the Freedom Caucus relents. Ryan is counting on the President hounding any recalcitrants and make them see reason.
Ways and Means and Joint Tax Committee staff are working frantically to make adjustments to the tax reform draft needed to accommodate powerful voices inside and outside Congress demanding attention, not least of which are the several members of his own committee, Ways and Means, who are conduits for the voices of hundreds of interests wanting to get their oar in.
Big changes are being made in the deductions for interest and state and local taxes. Business expensing of capital outlays is still in flux after several iterations.
Ways and Means Chairman Kevin Brady says that, "in all probability" the House will pass the Senate budget resolution next week, at which point he'll release his "chairman's mark" (draft tax reform bill) and schedule a markup by the full Ways and Means Committee.
We'll likely see the mark-the draft bill Ways and Means will be asked to approve-the first week of November, with markup the second week.
House To Vote On Senate's Budget Resolution, Tax Reform Markup To Follow
House Rules Committee meets Tuesday afternoon, October 24, at 3 PM to vote on whether to adopt or amend H. Con. Res. 71, "Establishing the Budget for the Government of the United States for Fiscal Year 2018."
On Wednesday, October 25, the House meets at noon for legislative business and the Majority Leader has scheduled a vote on final passage of H. Con. Res. 71.
If the House votes to accept the Senate budget resolution, both bodies will have adopted the same budget, thus reconciliation procedures for tax reform will be in effect. The budget resolution is a congressional document and doesn't have to be signed by the President.
Ways and Means Chairman Brady says that after House passage of the budget resolution he'll release the chairman's mark for tax reform and schedule a committee meeting to consider the mark, which is essentially the House GOP leadership's proposed tax reform bill.
Ways and Means Committee members will have the opportunity to offer amendments to be voted up or down during consideration of the mark, which may take several days. As the GOP holds a 24-16 majority on the committee, amendments supported by both Republicans and Democrats will have the best chance of passing.
If permanent WOTC isn't in the chairman's mark, our bi-partisan supporters on Ways and Means are preparing to offer an amendment to include it in the bill.
The Senate plans to write its own tax reform bill and we are working to include permanent WOTC in the measure. Republicans have a 16-14 majority on the Senate Finance Committee, thus we need at least two GOP senators to join Democrats to win a vote to include permanent WOTC in the Senate bill.
We well be in Las Vegas at the Global Tire Expo next week and will resume the newsletter the following week.
Come see us in booth #40069!