1. The House voted to pass the first major reform of the tax code rates in over thirty years. Thirteen Republicans crossed party lines and voted against the measure. As previously reported, the plan would lower the corporate tax rate to 20 percent from 35 percent and reduce the number of individual-income rates to four from seven. It would also repeal the estate tax and the Alternative Minimum Tax. The bill, however, limits the ability of pass-through firms to fully take advantage of the new 25 percent tax rate and limits the ability of the state and local tax deduction to only the first $10,000. The Senate Finance Committee, meanwhile, spent the week on its version of the bill. NECA has major concerns with their version because the proposed measure does not significantly reform tax rates and only makes the rate changes temporary for individuals, does not eliminate the estate tax, and takes away the ability for individuals to deduct their state and local taxes. NECA has prepared a side-by-side of the major differences between the House and Senate bills in this presentation.
NECA’s Look Ahead:
NECA has spoken with multiple Members of the House Ways and Means Committee expressing our concerns over the limited ability for pass-through firms to achieve a 25 percent tax rate, as has been promised by House and Senate leaders for years. It has been reported that there is still a chance to reform the pass-through provisions once the bill goes into conference with the Senate. Meanwhile, the Senate bill would also eliminate the individual mandate as required by the Affordable Care Act. That provision was included to give some Senators the incentive to vote for the bill as it would save the federal government more than $300 billion over 10 years but leave millions of Americans uninsured and likely increase the cost of health insurance. The Senate measure is already in big political trouble as Sen. Ron Johnson (R-WI) became the first GOP Senator to state he opposes the bill due to the limited pass-through provisions. Meanwhile several other GOP Senators, including Jeff Flake (R-AZ), Susan Collins (R-Maine), Lisa Murkowski (R-AK), and John McCain (R-AZ), among others, have expressed their own concerns about the tax bill but have not yet publicly come out against it. Under budget reconciliation procedures that allow for simple-majority passage of the bill, Majority Leader Mitch McConnell (R-KY) can lose only two Republicans in the face of united Democratic opposition. If all goes as planned, the Senate Finance Committee will wrap up work on the bill by the end of the week and plan to bring it to the Senate floor the week after Thanksgiving.
2. Once tax reform is addressed, Congress still has several major issues to tackle, including a December 8 deadline for agreeing on legislation to keep the government funded through fiscal 2018.
NECA’s Look Ahead:
NECA is being told that there is already talk of a short-term continuing resolution (CR) to fund the government until late December. It should be noted that Congress has a soft deadline of leaving town by December 15, but with many other issues hanging in the balance, that deadline could easily shift back.
3. On November 15, 2017, the House Committee on Education and Labor, Chaired by Rep. Virginia Foxx (R-NC), held a hearing “Examining the Policies and Priorities of the U.S. Department of Labor”. During the hearing, Secretary of Labor Alexander Acosta gave extensive testimony on the priorities of the Department of Labor.
NECA’s Look Ahead:
This hearing was specifically called to coincide with the U.S. Department of Labor’s National Apprenticeship Week. Secretary Acosta spoke many times about the importance of apprenticeships and mentioned the excellent standards the building trades have established without the use of federal money. Outside of expanding apprenticeship programs, the Secretary was vague on many topics of importance to NECA, including the silica rule. The hearing was an especially short one to accommodate the Secretary’s schedule. Members were only given three minutes for questions and answers, but in the coming weeks Members will submit written questions to the secretary, which will provide a much more in-depth overview of the DOL’s priorities.