But about that shutdown… The House and Senate each voted last evening to keep the government open until December 22. The measure put off for a couple of weeks conflicts over increases in defense and domestic spending, funding to address opioid addiction, pensions, community health centers, veterans, children’s health insurance, the Dream Act, and emergency disaster relief.
The TCJA conference committee has four major problems to solve. Bloomberg explains the points of disagreement between the House and Senate versions of the Tax Cuts and Jobs Act. Will Congress make individual income tax cuts permanent or temporary? What individual income tax rates will it choose? What will happen to the individual and corporate alternative minimum tax, which the House would repeal but the Senate would keep? And how will the committee ultimately treat pass-through entities?
Then there is health care. Sen. Susan Collins’ price for supporting the TCJA conference report may have just gone up: She says the House must pass two bills aimed at bolstering the Affordable Care Act before she votes for final passage of the tax bill. Until now, Senate Majority Leader Mitch McConnell has been saying only that he “agreed to support the health bills” in return for Collins’ backing of the Senate version of the TCJA.
Most Americans (still) believe the GOP tax plan helps corporations and wealthy Americans. The latest CBS News poll finds that 76 percent of those polled believe the TCJA provisions would help corporations and 69 percent believe it would benefit the wealthy. Forty-nine percent of Americans believe their taxes will go up under the plan. In line with previous polls, it also finds 53 percent disapprove of the plan while 35 percent approve of it.
With no principles to anchor it, the TCJA is a magnet for special interest tax breaks. TPC’s Howard Gleckman notes that the House and Senate bills are filled with provisions that make no sense as tax policy. For example, the House bill would tax tuition waivers for graduate students, but continue to exclude much more lucrative forms of non-cash compensation such as employer-sponsored health insurance. The Senate bill would disallow a deduction for a portion of interest costs--but only for some business and not for others.
Who will sit on the conference committee? Senate Republicans are Orrin Hatch, Mike Enzi,, Lisa Murkowski,, John Cornyn, John Thune,, Rob Portman, Tim Scott, and Pat Toomey. Democrats are Ron Wyden, Bernie Sanders, Patty Murray, Maria Cantwell, Debbie Stabenow, Robert Menendez, and Tom Carper. The Wall Street Journal notes that eight states—Utah, Texas, Alaska, Oregon, Michigan, Washington, Illinois and South Dakota—have at least two lawmakers on the 29-member conference committee. Three of the most populous states have nobody on the committee: New York, Georgia, and North Carolina.
States and budget balancing: The “how” matters more than the “if.” TPC’s Megan Randall writes that balanced budget requirements have become a pillar of state budgeting practice. But do they work? And how do we determine whether they’re effective? She lays out the evidence and concludes that “states should assess the costs—and benefits—of a strict balanced budget rule, and policymakers should consider how to combine and refine budget practices to ensure long-term fiscal health.
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