House and Senate lawmakers are poised to begin working as soon as Monday on compromise tax-overhaul legislation—a key step in their drive to send a bill with tax cuts for corporations and individuals to President Donald Trump by the end of the year. Here are the latest developments, updated throughout the day:
Senate May Name Negotiators Later This Week (3:54 p.m.)
The Senate may hold off on adopting a motion to go to a conference committee with the House for tax overhaul legislation—and naming its attendees—until later this week, according to David Popp, a spokesman for Senate Majority Leader Mitch McConnell.
The House will vote on a similar motion Monday evening, and its delegates should be named later that night, according to a senior Republican aide, who asked not to be named in order to discuss the plans. The House delegates could include members of the tax-writing Ways and Means Committee and the Natural Resources Committee, according to the aide.
While members may be jockeying for positions on the committee, most of the negotiations over the House and Senate tax plans’ sticking points will be between the chambers’ leaders. The committee will be made up of about two dozen lawmakers. Democrats will get to name some participants, but they aren’t sounding very hopeful that their ideas will carry any weight.
“My sense is they may have a conference in name only,” said Senator Ron Wyden, the ranking Democrat on the Finance committee, after the bill passed early Saturday morning. “We’ll have to see.”
The Senate calls for all individual tax breaks to expire after 2025 to comply with budget rules, while the House would keep most of the individual changes in place, except for a $300 per person family credit. So-called pass-through businesses, such as partnerships and limited liability companies, are also treated differently under the bills. And the Senate bill would postpone a corporate tax rate cut—to 20 percent from 35 percent—for one year, until 2019.
Representative Dave Brat of Virginia, a conservative House member, applauded the Senate’s work, but added: “We’ve got a few things we’ve got to work out.”
The delay of the 20 percent corporate rate is “one of the things I think is worth fighting it out over,” Brat said Monday afternoon during a Bloomberg Television interview.
“If you don’t implement those rates right away, I think you’re putting the economy in harm’s way as well as the markets as well as wage rates for the people back home,” Brat said.
On the individual side, the House bill would consolidate the current seven individual tax brackets to four, leaving the top tax rate at 39.6 percent. The Senate bill would have seven brackets—with lower rates, and a top rate of 38.5 percent.
In a last minute change, the Senate GOP decided to keep the alternative minimum tax for individuals, while raising the exemptions until 2026, and preserve the corporate AMT. The House would repeal both levies. The Senate bill also keeps the estate tax (while doubling the exemption amount until 2026). The House plan doubles the threshold, but eventually fully repeals the levy.
The Senate legislation also calls for repealing the Obamacare individual mandate—and while House Republicans mostly support that, it could get tricky if moderates’ votes are needed.
The Senate was scheduled to resume business at about 3 p.m Monday.
House Speaker Paul Ryan has repeatedly emphasized the importance of going to conference, seeking to reassure his members that they won’t just be forced to swallow the Senate version.
“This is such an important piece of legislation -- it’s generational-defining, and you don’t skip the legislative process,” Ryan told reporters last week. “And that means we will be going to a conference committee.”
—Laura Litvan and Anna Edgerton
What to Watch on Monday:
House Freedom Caucus is holding a meeting at 5 p.m. to discuss tax legislation, according to a person familiar with the gathering who asked not to be named. House conference committee members are expected to be announced late Monday. The U.S. Chamber of Commerce issued a blog post calling for the repeal of corporate AMT. Other business groups may follow suit.
Here’s What Happened over the Weekend:
Senate Republicans narrowly approved the most sweeping rewrite of the U.S. tax code in three decades, slashing the corporate tax rate and providing temporary tax-rate cuts for most Americans. After the vote, Trump said on Twitter that he looks forward to signing a final bill before Christmas. Last-minute changes to the legislation—including a provision that would leave the so-called alternative minimum tax in place for corporations and retain a modified version of that tax for individuals—left many tax experts scrambling over the weekend to understand the revisions’ impact. Democratic senators, including Ron Wyden of Oregon and Elizabeth Warren of Massachusetts, harshly criticized Republican leaders for rushing the bill and making last-minute changes with little discussion. On Saturday, Trump said the corporate tax rate—which would be cut to 20 percent from 35 percent in both the House and Senate bills— “could be 22 (percent) when” a final bill emerges. Revisions made to the Senate tax bill to help shore up GOP senators’ votes added roughly $32.5 billion to its 10-year cost, according to a one-page document posted late Friday night by the Congressional Budget Office.
