$78 Billion Tax Package Passed By House Now Faces Roadblocks In The Senate
On Wednesday, the House passed a $78 billion bipartisan tax package which revives various business tax breaks relat4ed to R&D and capital expenses, and expands the child tax credit.
While the package passed by a vote of 357-70, a major win for House Ways and Means Committee Chair Jason Smith (R-MO), and it handed Democrats a significant win on the child tax credit, it faces serious hurdles in the Senate.
As Punchbowl News suggests: "This popular bipartisan tax bill is going to get caught up in a Senate legislative logjam over the next few weeks Just consider what’s on the agenda already for the World’s Greatest Deliberative Body":
The Senate is currently in the middle of trying to craft a national defense supplemental, including border security money and aid to Israel, Ukraine and Taiwan. This is the chamber’s top priority right now.
The federal government’s shutdown deadlines under the current continuing resolution are coming up very soon — March 1 and March 8. Each of these bills include hundreds of billions of dollars in spending, and party leaders will need plenty of time to get them across the floor.
The FAA’s authority expires March 8. The Senate Commerce Committee has yet to mark up the upper chamber’s version of the FAA reauthorization. But March 8 is a hard deadline for the FAA to be reauthorized.
Most importantly, if the House impeaches Homeland Security Secretary Alejandro Mayorkas — which could happen as soon as next week — the Senate will need to hold an impeachment trial immediately. Impeachment has the highest privilege in the Senate.
And after next week, the Senate will leave town for two weeks during the Presidents' Day recess. According to the report, both the House and Senate will only be in session at the same time for just three days in February.
That said, Senate Minority Whip John Thune said that part of the recess may be scrapped if the Senate addresses the border security-Ukraine bill by the end of next week. "I don’t know that you could let this thing hang out there much longer," he told Punchbowl.
This bill will be inflationary.
— Matt Gaetz (@mattgaetz) February 1, 2024
2/3 of the House (at least) is about to vote for it.
Lobbyists will be thrilled, donations will flow.
Your prices will go up.
Our fight continues… https://t.co/lFse93yHIn
And even if Sen. Majority Leader Chuck Schumer tries to move the tax legislation as a standalone bill, it would likely take at least two weeks to process.
GOP is in no rush...
In the lead-up to the House vote, Republican Senators weren't getting on board Wednesday - and have instead been pushing for changes to the tax bill. What's more, they've been pushing for it to be marked up by the Senate Finance Committee, which could stall the entire effort.
The top Republican on the Finance panel, Sen. Mike Crapo of Idaho, has been in no rush to embrace it, and he’s pointed to concerns over the child tax credit expansion as the reason why.
“I look forward to working with my colleagues to vet the legislation, address concerns, and make the necessary changes to build support,” Crapo said in a statement.
Senate Republicans have picked at the child tax credit policy in the bill, the pay-for and the broader politics.
“I think passing a tax bill that makes the president look good, may allow checks before the election — means that [Joe Biden] could be reelected and then we won’t extend the 2017 tax bill,” Sen. Chuck Grassley (R-Iowa) told reporters. Those are the 2017 Trump tax cuts. -Punchbowl
The new tax plan would be financed by curbing the employee retention tax credit, a pandemic-era measure which was designed to keep workers on the payroll - but which as the NY Times notes, has become a magnet for fraud.
The Wednesday package that passed the house was brokered by the two top tax writers in Congress, Smith, and Sen. Ron Wyden (D-OR), Chairman of the Finance Committee, and has the support of the White House.
Republican proponents have held up the business tax breaks as a win, and have even framed the child tax credit as a victory.
"The child tax credit reforms in this bill are pro-family policies that maintain the child tax credit structure of the Trump-era G.O.P. tax reform," Smith said in a statement. "The child tax credit provisions in this bill help families crushed by inflation, remove the penalty for families with multiple children and maintains work requirements."