- The House Ways and Means Committee is set to begin their multi-day markup of the Tax Cuts and Jobs Act on Monday.
- The markup will allow Republicans to iron out some issues with the bill and attempt to bring sceptical members on board.
- For Democrats, the markup is an opportunity to air grievances about the bill and slow down its progress.
The House Republican bill to reform the tax code meets its first real test Monday, with House Ways and Means Chair Kevin Brady bringing his bill to the committee for the start of a multi-day markup.
The Tax Cuts and Jobs Act (TCJA) is expected to face a marathon markup in the committee, which will provide an opportunity for members from both sides of the aisle to express their views on the legislation and offer possible tweaks.
Given the relative power of each party on the committee, the two sides will likely come in with diverging goals, said Isaac Boltansky, an analyst at the research firm Compass Point.
“We expect the markup to include a series of technical corrections, a focus on more precisely tailoring the bill’s pass-through treatment, an airing of grievances regarding the removal of sacred deductions, and a heap of Democratic amendments,” Boltansky wrote in a note to clients Monday.
For Brady and the GOP members, it is also an opportunity to offer changes that could make the bill more palatable for some disgruntled lawmakers in their own party.
A coalition of GOP representatives from states like New Jersey and New York have expressed concerns about proposed changes to the state and local tax (SALT) deduction. The current version of the TCJA proposes to eliminate a significant amount of the deduction. The bill would allow people to deduct up to $US10,000 in property taxes, but no state or local sales or income tax.
Additionally, several influential industry groups, like the National Association of Realtors and National Federation of Independent Business, have expressed concerns about various aspects of the bill.
Republicans could target Obamacare’s individual mandate
A possible wild card that could complicate the markup is a call from President Donald Trump and other Republicans to include the repeal of Obamacare’s individual mandate in the bill. While the move would likely help Republicans fit the bill into a tight budget window, it would also leave as many as 15 million more people without insurance over the next 10 years, according to the Congressional Budget Office.
The inclusion of the mandate’s repeal would likely lead to similar resistance that other Obamacare repeal and replace measures faced in the Senate and complicate the political maths for the GOP. Greg Valliere, chief strategist at Horizon Investments, said that adding the repeal to the bill would be a serious error.
“Are the Republicans really determined to attach an Obamacare replacement provision to the tax bill? Do they want to touch that hot stove once again?” Valliere said Monday. “We’re hearing that Paul Ryan is aghast at the prospect, which could derail the tax bill in the Senate, but President Trump and party activists want to give it one more try. They don’t have the luxury of getting all that ambitious, because the tax bill already faces plenty of other obstacles.”
Democrats look to delay
For Democrats, the markup is mostly about the potential to score political points and slow down the bill as much as possible. Since the party does not have enough members on the committee to hold up the bill, much of their time will be spent trying to add as many amendments as possible and express gripes.
So far, Democrats have highlighted the legislation’s benefits for wealthier Americans and charged that the bill favours businesses over the middle class.
In the end, however, the Ways and Means markup may be more about setting principles than about specifics. The Senate tax reform bill, expected sometime later this week, will likely carry more weight since the Republican majority in the chamber is much slimmer.
Additionally, stricter rules in the Senate may necessitate changes to the bill’s proposed cuts and deduction eliminations.
Perhaps most at question in the markup will be the timeline. House GOP leaders are still pushing to pass the bill by Thanksgiving. And to make that happen, Brady is targeting a Thursday wrap-up for the markup.
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