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Tax reform dominates as Congress takes a Thanksgiving break

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Congressional Republicans left Capitol Hill late last week excited about the prospects for sweeping legislation which would deliver tax cuts and tax reform, as with approval of a House tax bill, the focus has shifted to the Senate, and whether GOP leaders can muster the needed votes to approve a slightly different GOP tax measure after Thanksgiving.

“This bill gives Americans more take home pay by cutting taxes and preserving deductions for home mortgage interest and charitable contributions,” said Sen. Bill Cassidy (R-LA) – while he’s on board, only a handful of GOP Senators are expected to determine the fate of this legislation.

Here’s where things stand on Capitol Hill as you get ready to talk politics (or try not to talk politics) with your relatives over the Thanksgiving holiday:

1. Remember, there is more to do than tax reform. Yes, Republicans want to get tax reform done by the end of the year. But there are other measures which will need attention as well after the Thanksgiving break. For example, the Children’s Health Insurance program needs to be reauthorized, and has been in limbo since October 1. A temporary federal budget runs out on December 8, and there still hasn’t been a deal announced on how much Congress will decide to spend on the discretionary budget, which is what funds pretty much everything outside of mandatory spending items like Social Security and Medicare. There had been talk earlier this year of a possible government shutdown showdown, but that seems unlikely right now, because it would really get in the way of GOP efforts on tax reform. House Speaker Paul Ryan still wants all that spending work – a giant omnibus funding bill – done by the end of the year.

2. A rush of spending seems likely. In order to get a deal on the discretionary budget for 2018, it’s expected there will be a sizeable increase in defense spending in any final spending deal for next year – President Trump had asked for $54 billion in extra military funding, but there’s no sign of any budget cuts to immediately offset the cost of that. Not only is that extra money likely to be approved, but a third hurricane disaster relief bill seems likely to be voted on by Congress in December as well. The latest White House request was for $44 billion, much less than what Texas, Florida and Puerto Rico have asked for in terms of hurricane aid. That would make total aid close to $100 billion just this year. In the latest disaster aid plan, the White House for the first time is seeking offsetting budget cuts to pay for some of that extra spending. The plan unveiled last Friday has $14 billion in cuts now, and another $44 billion in cuts later – later, as in between 2025 and 2027, after President Trump is gone from the Oval Office.

3. Some Senators to watch on tax reform. When lawmakers return to legislative sessions the week of November 27, the main political game on Capitol Hill will be figuring out where everyone stands on the GOP tax reform bill in the Senate. This is a similar scenario to what went on with Republicans on health care reform, and many of the same players are involved. On the bubble right now would be Sen. Susan Collins (R-ME), Sen. John McCain (R-AZ), Sen. Bob Corker (R-TN), Sen. Lisa Murkowski (R-AK), and Sen. Jeff Flake (R-AZ). Also, Sen. Ron Johnson (R-WI) has said he wants major changes on how small businesses and pass through businesses are dealt with. Don’t count the bill out yet, but there is a lot of work to do. And one thing is for sure – someone will be watching them very closely.

4. Some items you probably won’t see in 2017. One item that won’t be acted on this year is an infrastructure bill. President Donald Trump has talked about his grand $1 trillion infrastructure program since the 2016 campaign, but at this point, there is still no detailed plan, and there is no bill in the Congress. On immigration, there’s still lots of talk about wheeling and dealing on DACA and border security, but I’m not sure there’s the political will to do that. Don’t look for funding for the border wall, but instead for something that sounds like border security, but isn’t the wall. With tax reform dominating the agenda, don’t look for anything on DACA until 2018.

5. One issue that has disappeared – the deficit. It used to be that Republicans were all about reigning in spending, and cutting the size of government. Now that they have had control of the House, Senate and White House, they are poised to, to, to, do nothing in 2017 on that front. The budget doesn’t balance for at least ten years (if not more), there were no major spending cuts enacted by the Congress, there was no appetite for savings in mandatory spending programs, either. The cuts included in the President’s budget have pretty much been ignored by lawmakers, and it took the White House three disaster aid bills before any offsetting budget cuts were proposed. Meanwhile, the yearly federal deficit is trending back up, and with the disaster relief bills, and an increase in the federal budget caps, there will be more red ink in 2018. Only a few Republicans have stuck with their familiar call for budget discipline.


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