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Full GOP Tax Proposal Will Wait Until Later

Outline to be released this week, but full treatment awaits budget resolution

House Ways and Means Chairman Kevin Brady says more details on the GOP tax plan are coming, but not the full package. (Tom Williams/CQ Roll Call)
House Ways and Means Chairman Kevin Brady says more details on the GOP tax plan are coming, but not the full package. (Tom Williams/CQ Roll Call)

If the tax overhaul framework congressional leaders and White House officials are releasing Wednesday fails to appease rank-and-file member calls for more details, House Republican leaders may find themselves still short of the votes needed to pass a budget. That’s especially problematic given that tax writers are not planning to unveil a full tax plan until after the House and Senate pass a reconciled budget.

“After the unified Republican plan is announced on Wednesday, the House and Senate will turn toward passing a budget that includes reconciliation instructions that will ensure that we can deliver tax reform to the president’s desk by the end of the year,” House Ways and Means Chairman Kevin Brady told reporters Monday during a break from a retreat the GOP committee members held to discuss the tax plan.

The Ways and Means Committee will unveil a “comprehensive tax reform” bill after the House and Senate pass a reconciled budget, the Texas Republican added. The Senate Finance Committee is planning to release its own bill.

That decision could delay the tax overhaul effort even further than it already has been because of House Republicans’ struggles to pass a budget.

House GOP leaders and Budget Chairwoman Diane Black of Tennessee are hoping that Wednesday’s framework will provide enough details to members who have said they want to have a better understanding of what would be in the tax bill before agreeing to vote for the budget.

“We’re still working with those who wanted more answers,” Black said Monday, suggesting the needed votes still aren’t lined up.

Chasing permanency

Meanwhile, the Senate has yet to even release or mark up a budget. But senators have announced that their budget reconciliation instructions specify a tax reduction, whereas the House budget resolution has instructions for a deficit-neutral tax bill with $203 billion in mandatory spending cuts.

Under the reconciliation rules, the tax bill cannot become permanent law if it loses revenue outside the 10-year budget window. However, individual provisions can be made permanent if they pass the revenue test.

The Senate’s plan for a tax reduction seems to acknowledge that full permanency is a difficult goal to achieve.

Even Brady, who has long advocated revenue neutrality to ensure the tax overhaul will be permanent, acknowledged Monday that Republicans may fall short of that goal.

“Our goal is permanency or as much of it as we can get in all the key provisions,” he said. “The framework is going to address some of that.”

With the House and Senate working toward different revenue targets in their budgets, it’s unclear whether the framework will attempt to close that gap or remain silent on the issue.

Asked Monday how the House and Senate will reconcile the differences in their budgets, Black said a conference committee (assuming both chambers can pass budgets) remains an option but that no decisions have been made.

“We need to have the budget done before we can start to mark up,” Black said.

A conference committee on the budget would likely take more time than Republicans realistically have to meet their goal of passing a tax bill through both chambers by the end of the year.

Waiting on details

If Wednesday’s tax framework does not provide enough details to help House GOP leaders shore up the needed votes to pass a budget, it is unclear what their plan B is.

Black has previously suggested she would not make further tweaks to the budget, but on Monday she left the door open to amending it before it goes to the floor.

“I don’t know; that’s yet to be answered,” she said when asked if changes were possible.

Rank-and-file members’ reactions to the tax framework will likely determine how leaders proceed.

House Republicans are expected to be briefed on it Wednesday morning during a half-day, off-campus retreat.

Brady declined to reveal much of what would be included in the coming framework, saying he did not want to get ahead of Wednesday’s release.

“It will have specific rates on businesses of all sizes and families as well. It will be left up to the committee to determine the final design,” the chairman said, confirming that would include the income thresholds at which individual rates being announced Wednesday would apply.

That means it won’t be entirely clear how much the wealthy would benefit compared to low-income and middle-class taxpayers under the plan until the committees release their bills.

Brady made no assurances on how individuals would fare but said businesses will see record tax cuts.

“My prediction is the framework will deliver the lowest tax rates on businesses in modern history,” he said.

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