- House Republicans delayed the rollout of their tax reform bill from Wednesday to Thursday — less than 24 hours before it was set to be released.
- The delay was forced by key differences in the GOP conference that could not be resolved in time.
- The turmoil and delay could be a concerning sign for Republican leaders.
House Republicans were forced to push back the rollout of their long-awaited tax reform legislation from its originally scheduled Wednesday release to Thursday, in what analysts say is a concerning development for the viability of the bill.
“The delay is a clear negative as it underscores both the inherent difficulty and the unrealistic timing expectations,” said Isaac Boltansky, an analyst at the research firm Compass Point.
The delay puts more pressure on Rep. Kevin Brady, who heads up the Ways and Means committee and is the principal author of the plan. Brady has repeatedly pointed to the week-long Thanksgiving recess as the deadline for the House to pass the bill.
A one-day delay does not sink that possibility. But it highlights divisions within the GOP that could careen the legislation off course.
There are already reports that Republicans may be forced to delay the unveiling even further, possibly into next week, though so far leaders are publicly denying the reports. If this were to happen, said Chris Krueger, an analyst at Cowen Washington Research Group, Trump’s stated goal to complete the reform package by Christmas would go out the window.
“If the bill is not released by Friday, the Monday markup is probably going to be delayed,” Krueger said in a note Wednesday. “That means the entire schedule of getting the House to pass a bill by Thanksgiving is likely not possible — which means getting a bill passed into law by the end of 2017 is likely off the table. Time is quickly becoming the most precious commodity on Capitol Hill.”
The reason for the delay, however, is the bigger deal than the postponement itself.
Republicans are still attempting to settle key disputes about how to pay for the bill. Included in the discussions are possible changes to 401(k) retirement plans, the elimination of the state and local tax deduction, and at what income a new, top tax rate would kick in.
Republicans allowed the plan to add $US1.5 trillion to the deficit over 10 years as part of the recently passed budget. The GOP tax framework would cut around $US5 trillion in revenue over the next 10 years, based on analyses of the framework — meaning the tax writers have to find a variety of offsets in the bill by eliminating loopholes, deductions, and tax credits.
Some of those offsets are almost certain to face resistance from interest groups and constituents, making passage of the final plan more difficult. Additionally, some Republican lawmakers members have have expressed concern with proposals related to the state and local (SALT) deduction. The SALT deduction is used primarily by people in high-tax states like California, New York, and New Jersey.
Brady has floated a compromise solution on the issue that does not appear to have satisfied their concerns.
“It’s a geographical redistribution of wealth,” said Republican Rep. Lee Zeldin of New York, arguing that eliminating the SALT deductions “picks winners and losers.”
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