for the week ending November 10, 2017
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For the most part legislative activity was reasonably normal this week as the House leadership prepares it tax reform bill for the floor next week and the Senate shapes up its version for a vote before Christmas.
Not legislative material but certainly on the back of Republican minds and the considered among Democrats as a political wave getting started what with the election returns in Virginia and New Jersey where voters rejected Republican candidates and incumbents, particularly in Virginia where, once some recounts are done came close ow will win the majority in the Virginia House of Delegates.
Republicans don’t have much going for them, particularly those who continue to support Trump, if they do not pass the tax reform / cut package now shaping up on the Hill.
The Affordable Care Act so far has survived any number of attempts to drain it of resources; the possibility of repealing the mandate to buy insurance or face penalties the most current. The provision mandating purchases is, to those already determined the fate of the law, seen as money necessary to make sure the tax reform / cut legislation soon to be revealed meets its parliamentary requirements not to exceed a deficit increase to $1.5 trillion. Tempting but not likely since it would certainly cloud the waters after recent battles to repeal the law and because it appears they have already hit the necessary numbers to meet House and Senate rules.
Tax Reform / Cuts –
Not as easy as it seemed, the legislative effort in the House and now the Senate has not yet been put into legislative language. But then there are no hearings, just a bill shaped up in the Republican dominated Ways and Means Committee. When the House Ways and Means Committee accomplishes that the bill will move to the rules committee to define how the bill is handled on the floor. The Rules Committee could see the need to make some changes. Leadership seeks a floor vote on the bill before the Thanksgiving break.
What we now know in the House bill is that Mortgage interest deductions will remain but only for properties valued up to $500,000 and the deduction for State and Local sales taxes might be included The Senate bill as it shapes up does not allow either of those deductions.
Under the current bill the House bill raises repatriation tax rates on corporate money held abroad. Current rates are 5 percent for assets not easily cashed in to be raised to 7% and the 12 percent for cash held internationally would be raised to 12%.
Pass through income – If you own an LLC, for example, you would pay 9% on your first $75,000 earned providing you made less than $150,000. The rate starts at 11% for 2018 and reduces to the 9% in 2022.
More popular provisions include restoring the adoption credit, moving expenses if you are in the military, and if you are a religious organization or other 501 (c) 3 you can endorse a political candidate and not fear losing your tax-exempt status.
In general the House bill reduces the 7 tax brackets to 12, 25, 35 and 39.6 percent. A fifth bracket taxing millionaires has discussed but in not in the bill at this time.
What we also know is that the bill ups the standard deduction for single filers earning $12,000 or less. (Joint filers earning $24,000 or less would pay no income tax. On the other side the House bill as it stands would eliminate the deduction for medical expenses. The Senate bill would keep the deduction.
Also remaining is the child tax credit increase from $1,000 to $1,600 per qualifying child.
The Senate plan lower top individual tax rate rather than the 39.6% in the House bill.
Those Investigations –
It has been reported that Special Counsel Robert Mueller will soon bring other indictments as he continues to interview individuals close to the Trump inner circle. The House Intelligence Committee interviewed former Trump bodyguard Keith Schiller. Schiller stated that a Russian approached him with the offer of sending five women to Trumps room that Schiller said he thought was a joke and, to his knowledge, Trump slept alone that night. Oddly, Schiller’s lawyer, after complaining that someone on the House panel leaked the information to the press said that his client’s testimony as leaked was not an accurate depiction of what he said.
Former Trump advisor Carter Page who travelled to Russia during the campaign appeared before the Senate panel and denied any discussion with Russian officials about the Trump campaign and said he had discussed the trip with former campaign manager Core Lewandowsky.
Deficit Increased –
“In fiscal year 2017, which ended on September 30, the federal budget deficit totaled $666 billion— $80 billion more than the shortfall recorded in 2016. The deficit increased to 3.5 percent of the nation’s gross domestic product (GDP) in 2017, up from 3.2 percent in 2016 and 2.4 percent in 2015—but far lower than it was in 2009, when the deficit reached 9.8 percent of GDP.” – Congressional Budget Office
Senators addressed a lengthy list of nominations on the floor and promises to have its version of a tax reform plan for consideration perhaps next week and after the House votes on its bill.
As we approach the year end it is common for committees to relieve themselves of legislation and move them to the floor. To that end the House agreed to fourteen bills regarding veterans from providing gravestones to renaming a veterans museum.
The House also took up and passed a bill specifying the Federal Energy Regulatory Commission’s responsibilities and authorities when considering a new, non-federal hydropower project, allowing micro-securities to avoid registering their products under some circumstances, and clarified capital requirements for certain acquisition, development, or construction loans.
From the Left
Hamilton on Congress
Magic Mondays (Video)
Political ‘Education’ (Video)
The Senate and House are adjourned and will return to work on Monday, November 13th. The next edition of TheWeekinCongress.com will be published Thursday evening November 16th.
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