REAL-TIME Updates: Appropriations, Entitlements, Disaster-Aid, Debt-Ceiling, Taxes
Tax Bill Hits Americans with Disabilities — with Medicare cuts, higher health premiums, lower investment in accessibility, fewer job opportunities, and potentially huge cuts in Medicaid and other key entitlements.
- GOP Attempting to Avert Shutdown with 4th CR: With the current stopgap funding measure expiring this Friday, Jan. 19 at midnight, the House will vote Thursday on a 4th continuing resolution (CR) that would continue funding through Feb. 16 (aiming to complete action on a spending bill before President's Day recess). The stopgap CR includes:
- a 6-year reauthorization of the expired Children's Health Insurance Program (CHIP) -- a jointly financed Federal-State program that covers 9 million low-income children from families that have annual incomes above Medicaid eligibility levels but lack health insurance; and
- delays/suspends several Affordable Care Act taxes (medical device excise tax for another two years, "Cadillac tax" on high-cost employer-sponsored health plans for two years, and a fee on health insurance provides for one year).
- Senate will take up the measure on Friday if it passes the House. Many Democrats are expected to vote against another CR because it does not protect "Dreamers" from deportation with the impending expiration of DACA -- although it is unclear if Senate Democrats would filibuster a CR and raise the threshold for passage to 60 votes.
- Work on an omnibus funding measure for the remainder of FY '18 continues to be mired in negotiations over "parity" for defense and non-defense spending, and immigration issues (extending DACA protections, US-Mexico border security, and GOP proposals to limit family-based immigration and the diversity visa lottery).
- See our Appropriations Portal for details on the "parity" issue, discretionary spending caps, FY'18 continuing resolutions, and other appropriations developments.
- House GOP Backs Away from Social Security and Medicare Cuts: In a major policy reversal, House Speaker Paul Ryan. speaking at a WisPolitics event at the University of Wisconsin-Madison on Friday, Jan. 12, 2018, said regarding Social Security and Medicare cuts/reforms, "I don't see us tackling it this year."
- It is not clear, if Ryan is also backing away from promised Medicaid cuts.
- Speaker Ryan had said on Dec. 6, “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” signaling a renewed effort to make deep cuts in Medicare, Medicaid, and other entitlements.
- Ryan's December statement was contrary to the promise of Candidate Trump in June 2015 to “save Medicare, Medicaid and Social Security without cuts.”
- Debt Ceiling May Need to be Raised by Early March; Long-Term Debt Outlook Deteriorates: The recent suspension of the debt ceiling expired December 8, 2017. CBO had projected late last year that after Dec. 8th, Treasury's "extraordinary measures" to raise cash "would probably be exhausted in late March or early April.” However, a recent private sector report projects the drop-dead date may arrive in early March.
- Failure to raise the debt ceiling would result in a default by the U.S. Treasury with catastrophic economic consequences. Default has never occurred and would have catastrophic effects on the ability of the U.S. Treasury to issue bonds in the future, as well as destabilizing global financial markets.
- Background: Debt Ceiling. Background: Main drivers of Increasing Debt
- ACA Cost-Sharing Reduction Payments End: ACA cost-sharing reduction (CSR) payments ended in December, without congressional action on the Alexander-Murray Bipartisan Health Care Stabilization Act of 2017. There are, as yet, no reports of the legislation being included in the next stopgap CR.
- CBO projects termination of the payments will destabilize health insurance exchanges, increase premiums, and increase federal deficits $200 billion. More on CSR payments and ACA...
- Disaster Aid Stalled: House passed an $81 billion bill for hurricane and wildfire victims in December, but the Senate did not take up the measure due to concerns it didn’t do enough to help California, Puerto Rico, and the U.S. Virgin Islands.
- Dodd-Frank: Senate could vote this session on S. 2155, a bill to exempt small and mid-size banks from Dodd-Frank, although Democrats are split on the bill negotiated in committee, and House conservatives want a bill that places restraints on the Consumer Financial Protection Bureau (CFPB).
- Tax Regs/Legislation in 2018:
- Technical corrections legislation.
- Treasury/IRS action on implementing rules for Tax Reform;
- International Trade in 2018 (links to key issues):
- Foreign Policy and National Security in 2018 (links to key issues):
UPDATE: The conference agreement retains the credit for disabled employee access; retains the work opportunity tax credit; and retains the new markets tax credit. The GOP tax bill would adversely impact Americans with disabilities. Here’s why: Medicare cuts: The tax agreement would trigger automatic PAYGO...
December: Tax Cuts, Federal Shut-Down, ACA Mandate, Debt Ceiling
Tax Bill: House of Representatives passed its version of the tax bill (HR 1) November 16. The Senate Finance Committee approved its version the same day and the full Senate, following a procedural markup on Tues. Nov. 28 by the Budget Committee, will take up their version of the tax bill this week under strict Budget Reconciliation procedures. The tax debate is fraught with procedural hurdles (Byrd Rule and germaneness), persistent myths, big policy differences between the House and Senate bills, and a renewed debate on repealing parts of the Affordable Care Act, as explained below.... CLICK ON THE LINK BELOW FOR UPDATES
Tax Bills Advance; Latest on Appropriations, Debt Ceiling, Health
Federal Shutdown Possible as Funding Expires December 8: Federal government shuts down at midnight Dec. 8 unless bipartisan agreement is reached on new spending limits for defense and non-defense discretionary (NDD) spending, or another stop-gap continuing resolution (CR) is enacted. Congressional Quarterly reports that Administration and congressional negotiators are working on a two-year deal that could increase defense by $54 billion and NDD by $37 billion above existing statutory spending caps in fiscal years '18 and '19; this would amount to a total appropriations increase of $182 billion over two years -- but GOP defense hawks want larger defense increases; Dems are pushing for equal increases ("parity") in defense and NDD; and others want defense increases to be offset by NDD cuts. Negotiations face a major fight over Administration insistence on border wall funding and Democratic insistence on DACA (deferred action for childhood arrivals) relief for illegal immigrants brought to the U.S. as children....
Disaster Aid: Administration on Nov. 17 requested $44 billion in disaster aid for Texas and Florida but the request has been met with bipartisan rebuke as insufficient and unacceptable; the Administration request does not include aid for Puerto Rico hurricane relief or California wildfires....
Must-Do Items before December adjournment: FY 2018 Appropriations; Disaster Aid; Reauthorizing the National Flood Insurance Program; Extending Affordable Care Act (ACA) cost-sharing reduction (CSR) payments; Reauthorizing the Children's Health Insurance Program (CHIP) ; Reauthorizing the Community Health Centers Fund.....
Debt Ceiling: Although the debt ceiling extension expires December 8, Treasury can manage cash flows to avoid default through January 2018....
HOUSE: Rules Comm. and Floor action on tax bill (HR 1) this week; House passage of tax bill is likely.
What You Need to Know About Tax Reform
SENATE: Finance Committee marking-up Senate version this week, with consideration of amendments to begin Nov. 14.
List of Amendments filed for Finance Comm. markup
On Monday, 11/13, the Penn Wharton Budget Model, an analysis issued through the Wharton School of the University of Pennsylvania, found the House tax bill would increase deficits by as much as $1.7 trillion over 10 years, even after accounting for additional economic growth that tax cuts could spur.
APPROPRIATIONS: Stop-gap funding for FY 2018 will expire December 8; at that time, the federal government will shut down unless another stop-gap continuing resolution is enacted or full-year appropriations for FY 2018 are enacted.
DEBT CEILING: Treasury Dept. said in a November 1, 2017 statement that extraordinary accounting measures will "allow the government to continue to meet its obligations through January 2018," despite the current suspension of the debt ceiling ending on December 8.
Nov. 2, 2017: House Ways & Means Committee unveiled the Chairman’s Mark of the “Tax Cuts and Jobs Act” (HR 1)
What You Need to Know About Senate’s Budget-Tax Resolution and Complex Year-End Spending Negotiations
- CLICK HERE for the JCT description of the Chairman's Mark [released Nov. 6]
- CLICK HERE for the JCT distributional analysis (by income group) [released Nov. 3]
- CLICK HERE to read the full legislative text of the Tax Cuts and Jobs Act.
- CLICK HERE to read the section-by-section summary of the Tax Cuts and Jobs Act.
- CLICK HERE for JCT revenue estimates (Chairman's Substitute Amendment to be considered at Ways & Means Committee on Nov. 6)
See our tax reform page for a summary of key provisions, revenue estimates, and outlook.
Treasury Dept. said in a November 1, 2017 statement that extraordinary accounting measures will "allow the government to continue to meet its obligations through January 2018," despite the current suspension of the debt ceiling ending on December 8. See our Debt Ceiling page for details....
Nov. 6, 2017: House Ways & Means Committee mark-up scheduled
Nov. 2, 2017: House Ways & Means Committee unveils the Chairman’s Mark of the “Tax Cuts and Jobs Act.”
See our tax reform page for a summary of key provisions, revenue estimates, and outlook....
Budget Resolutions Advancing to Enable GOP Tax Cuts; Shutdown & Debt Ceiling Loom
Senate Likely To Consider Budget Resolution Next Week: Last Thursday the Senate Budget Committee voted to report an FY 2018 Budget Resolution on a party-line 12-11 vote. The Senate plan would launch a filibuster-proof tax cut bill that would add $1.5 trillion to the public debt to pay for corporate and pass-through tax cuts, lowering the top individual tax rate, eliminating the estate tax, and other tax cuts.
Senate Budget Committee Releases Budget Resolution
FY 2018 appropriations remain stalled and a fight looms over paying for disaster aid....
A major debt ceiling fight in December remains a possibility, given increasing partisan discord over ACA repeal, tax cuts, and immigration -- and the fact that the debt ceiling bill is "must-pass" legislation.......
The Senate Budget Committee today (Friday, 9/29) released the text of a fiscal 2018 budget resolution that would launch the process for GOP tax cuts without Democratic votes.
Tax Reform Framework; GOP Abandons ACA Repeal/Replace; Appropriations Stalled
The 89-page legislative text includes reconciliation instructions that allow the Senate Finance Committee to add up to $1.5 trillion to federal deficits over the next 10 years, reflecting the GOP decision to come up with offsets to reduce the net cost of their multi-trillion tax cuts to $1.5 trillion over 10 years.
The filibuster-proof reconciliation mechanism allows Republican-only tax legislation to advance with 50 votes in the Senate. However, the filibuster-proof mechanism is constrained by the Byrd Rule which does not allow increases in the debt beyond the 10-year budget planning window. Therefore, any tax cuts that are not paid for will have to expire at the end of 10 years. See our explanation of Reconciliation and the Byrd Rule.
The budget also includes instructions for the Senate Energy and Natural Resources Committee to advance filibuster-proof legislation.
According to Politico, a vote is expected next week and the resolution is expected to be approved by the Committee. If the resolution clears the full Senate, a common version will have to be negotiated with the House. The House version includes controversial cuts of more than $200 billion in entitlement programs.
Here is a summary of the draft FY'18 budget resolution and summary tables.
Tax reform framework to be released Wednesday...
Adoption of an FY 2018 Budget Resolution is a prerequisite to tax reform...
Senate GOP abandons ACA repeal & replace; Hatch opposes efforts to shore up ACA insurance markets...
FY 2018 appropriations remain stalled risking shutdown in December...