December is often the busiest time in Washington, and this year is no different as Congress races toward the holiday finish line. There is still a multitude of problems to solve before members can head back to their districts, with the two most pressing issues being tax reform and funding the federal government beyond December 22.
On December 5 and 6, the House and Senate, respectively, each voted officially to begin conference negotiations on the Tax Cuts and Jobs Act of 2017 (TCJA). However, there are a number of key differences between the two chambers’ proposals that need to be resolved related to the corporate tax rate, individual tax brackets and rates, whether to keep the alternative minimum tax and how to provide tax relief to pass-through entities, to name a few.
All of this must be achieved while remaining under the $1.5 trillion reconciliation instruction established as part of the Fiscal Year 2018 budget resolution. President Trump has been urging Congress to get a tax bill on his desk before Christmas, and the pressure is especially high in the wake of Republicans’ failure to repeal and replace Obamacare.
While Congress managed to pass a stopgap funding measure yesterday to avoid a government shutdown, it will last for only two weeks, leaving a December 22 deadline for a budget cap deal and a number of expiring programs looming on the horizon before the holidays. It is not entirely clear whether Democrats in the minority or frustrated conservatives might thwart or delay a year-end package by using this must-pass deadline as leverage on other pressing matters, such as the Deferred Action for Childhood Arrivals (DACA).
Here are a few things that we believe are worth focusing on since our last issue.