Wednesday, December 20, 2017

Congress Set to Pass Tax Reform

Despite procedural setbacks, the House is set to send a tax reform bill to President Trump's desk today after the Senate passed its own version on a party-line vote slightly after midnight on Wednesday morning.

The House already passed a reform package late in the day on Tuesday but must hold another vote after it was discovered there were provisions in the bill that violated Senate rules. The reconciliation process Congressional Republicans are using to avoid a Senate filibuster from Democrats dictates that legislation must follow a strict set of budgetary rules. The Senate stripped out the portions that violated the so-called “Byrd Rule” and sent a revised version back to the House.

The final bill expected to pass preserves private activity bonds and the medical expense deduction, two provisions AHCA/NCAL said should be included. The initial House version passed earlier this year eliminated these important tax resources for non-profit providers and long term care patients but revisions later reinstated the provisions.

The potential legislative victory for Congressional Republicans is overshadowed by lingering disputes on year-end government funding and spending deals. Unlike tax reform, Republican leadership will need help from Democrats to pass funding bills through the Senate, and Democrats have threatened to pull their support unless specific provisions are included, such as funding of health insurance subsidies.

Meanwhile, it does not seem as if the House version of any spending package will include the provision to help the insurance markets created by the 2010 health care law that still remain controversial with conservative Republicans. If the House passes a bill without the cost-sharing subsidy and leaves for the Christmas holiday, Senators could be forced to vote for a less-optimal bill or shut down the government.

Negotiations over tax reform have left little time for Congressional leadership to reconcile differences between the two chambers: the deadline for funding is December 22.

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