Congress and White House Work Toward “Tax Cuts 2.0”
Since the days following the passage of the tax code overhaul last year, there have been whispers about whether and when Congress might try to move a second tax bill to address some technical glitches, as well as to extend or make permanent some of the temporary provisions from the 2017 legislation (namely, the decreased tax rates for individuals).
With the midterm elections nearing, and public interest in the hype around tax reform waning, many House Republicans are aiming to build support for their reelection by emphasizing the positive impacts they believe the tax reform is making for American workers and the economy. “A lot of Americans don’t know that it has helped them,” Ways and Means Chairman Kevin Brady (R-TX) said at an Americans for Prosperity event in his district recently, noting that “most of the audience look at each other like, ‘what is he talking about?’” This sentiment reflects the results of a CNBC All-America Economic Survey poll from late March, which found that 52% of working adults have not noticed a change in their paychecks since the tax code reform became law.
In an effort to revive energy and bolster talking points around Republicans’ key legislative achievement since President Trump took office, “Phase 2” of tax reform has started to gain momentum in policy conversations. Late last week, White House Director of Legislative Affairs Marc Short told reporters that officials from the Trump administration are working with congressional Republicans in an effort to have a second round of tax legislation ready for introduction by the end of this summer, according to POLITICO. Though Mr. Short did not discuss the specifics of what this legislative package could entail, he did note that they are “running numbers on several different components that are probably more focused on the individual side."
Rescissions Bill Introduced in Senate
Recently, Sen. Mike Lee (R-UT) introduced S. 2979, a bill that would advance President Donald Trump’s $15.3 billion rescissions request. The presidential rescission—resembling the line-item veto, which was struck down by the Supreme Court in 1996—is a measure that was enacted under the 1974 Congressional Budget and Impoundment Act and would allow Congress to consider a resolution (requiring only a simple majority for passage in the Senate) that would identify specific appropriations to cut from the recently passed spending bill.
This move in the Senate is a tactic to pressure the House to vote for its own version of the rescissions legislation (H.R. 3)—which has been stalled in the House due to the lack of enthusiasm among Republicans and opposition from Democrats. Congress has until June 22 to pass this before the presidential rescissions request fails.
According to POLITICO Pro, “The White House proposal would save $15.3 billion in budget authority, though the Congressional Budget Office has said it would only reduce the deficit by $1.3 billion.”
The bill has been referred to the Senate Budget and Appropriations committees, where it is awaiting further action.
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