Tag Archives: Senate Finance Committee

House and Senate Get Started on Tax Reform; Where Does Donnelly Stand?

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Late last week, the House Ways and Means Committee concluded its markup of the GOP tax reform bill (the Tax Cuts and Jobs Act) and voted along party lines to move the measure, 24-16. The core of the House bill reduces the number of individual tax rates, slashes the corporate tax rate and eliminates many deductions and credits.

The bill now will be taken up by the full House of Representatives for debate and vote – likely before the Thanksgiving recess. What are some sensitive issues being discussed in the tax reform bill? Pass-throughs, adoption tax credits, deductibility of state and local taxes (SALT), excise tax and more.

The GOP can only lose 22 votes in the House and whip counts are being held very close to the vest – only five or six Republicans have publicly stated that they are against the bill in the current form (all due to SALT).

Meanwhile, the Senate decided on Thursday to release its own tax reform plan. From the business perspective, the differences largely are about adjusting the dollar dials and creating negotiation items. In other words, politics. The Senate option does delay some positive economic effects, but if that’s what it takes to get a permanent tax reduction in the books so be it! We do want to point out that there are some notable differences between the two versions, particularly on the individual side – including with the estate tax and mortgage deduction, which, again, serve to set up further negotiations.

Senator Todd Young welcomed the effort from the Senate Finance Committee.

“I’m encouraged by the Senate’s proposal to create a tax code that is simpler, fairer and allows hardworking Hoosiers to keep more of what they earn. I’m also glad that this proposal maintains the adoption tax credit that is important to so many Indiana families. As we continue to debate a final tax relief package, I will keep working to ensure Hoosier voices are heard.”

Meanwhile, Sen. Joe Donnelly, didn’t give away his stance: “As I have said, tax reform should create jobs, protect jobs, invest in American workers and benefit middle class families. I will carefully review the Senate proposal and continue to engage with my colleagues and the White House on behalf of Hoosiers as the Senate works on tax reform.”

Donnelly also met on Thursday with the White House Director of the National Economic Council Gary Cohn to discuss his tax reform priorities. Earlier last week, Donnelly participated in another such meeting with White House Director of Legislative Affairs Marc Short and Cohn. President Donald Trump called in for a portion of the event. In that meeting, Donnelly discussed his tax reform priorities and shared a letter that he also sent to Vice President Mike Pence on Tuesday emphasizing that the tax policies should align with the interests of American workers and support companies that invest in the U.S.

Donnelly’s priorities are consistent with his End Outsourcing Act, which would support companies that invest in American workers and penalize companies that ship American jobs to foreign countries.

The Hill reported late last week that “Blue Dog Democrats are lining up in firm opposition to the Republicans’ tax code overhaul, hoping that Tuesday’s election results (particularly in Virginia) will force GOP leaders to reach across the aisle for a bipartisan alternative.”

Donnelly, a Blue Dog Democrat, has not said anything of the kind publicly and has been heavily courted by the Trump administration for his vote.

Putting a Price Tag on Health Care Proposal

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The Senate Finance Committee is expected to pass its version of health care reform legislation today. But a new report — titled Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage — warns about the likely impacts on individuals, families and businesses.

The PricewaterhouseCoopers study looks at four key provisions:

  • Insurance market reforms coupled with a weak coverage requirement
  • A new tax on high-cost health care plans
  • Cost-shiftng as a result of cuts to Medicare
  • New taxes on health care sectors

Health care costs are going to go up absent any reforms. With this combination of provisions, the increases are projected to be significantly higher. How high? According to the study, the cost of private health insurance coverage will increase:

  • 26 percent between 2009 and 2013 under the current system and by 40 percent
    during this same period if these four provisions are implemented
  • 50 percent between 2009 and 2016 under the current system and by 73 percent
    during this same period if these four provisions are implemented
  • 79 percent between 2009 and 2019 under the current system and by 111 percent

The authors wrote: "Market reform enacted in the absence of universal coverage will increase costs dramatically for many who are currently insured by creating a powerful incentive for people to wait until they are sick to purchase coverage."

Additional analysis and numbers are expected from the Congressional Budget Office after committee approval and before floor debate. This report certainly gives all involved something to consider.

Here’s What’s Next on Health Care Reform

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Congressional floor debate on health care could begin as early as October 13. That’s the goal of Senate Majority Leader Harry Reid.

First, the Senate Finance Committee is expected to vote this week (work resumes on Tuesday) on its version. The only real suspense is whether Republican Olympia Snowe (Maine) will cross over and vote for the measure. At the same time, Reid and other Senate leaders are trying to combine that proposal with elements of the one approved earlier by the House HELP (Health, Education, Labor and Pensions) committee.

Despite that HELP proposal, the House is still battling over Medicare reimbursement rates, trying to trim $200 billion from the cost of the bill and the final shape of the public option.

This is becoming the defining issue of the year. Immigration was pushed back early, there doesn’t appear to be the support for EFCA and most are now conceding that cap and trade will have to wait until when, and if, the health care debate is settled.

The drama, particularly when the issue hits the floor, will continue; the results are unknown.

Next Steps in the Health Care Debate

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The health care debate will be in full swing when more than 70 Indiana business representatives converge on Washington (see earlier post) in midweek for the D.C. Fly-in.

Markups (committee review of a proposed bill before it is reported out to the full House or Senate) will occur in both chambers. The Senate Finance Committee takes up chairman Max Baucus’ work that appeared to make no one happy upon its release last week and the House Energy and Commerce Committee takes care of some unfinished business.

The Senate Finance Committee will begin Tuesday, with both parties attempting to make changes to the $774 billion measure. The affordability of health insurance premiums is one of the primary cost concerns.

On the business side, there are a variety of fees and taxes, including a $4 billion annual tax on medical device companies. Senate Health, Education, Labor and Pensions ranking member Michael Enzi prepared more than 20 amendments for the markup, including one on the medical devices tax.

The Heritage Foundation offers a brief but pointed analysis of the Baucus plan, calling it "more of the same" and identifying "seven fatal flaws."

Meanwhile, the House Energy and Commerce Committee will begin a second health reform markup Wednesday, concluding business left unfinished this summer.

The committee reported out its version of the health care overhaul on July 31, but only because members agreed not to offer any more amendments. Energy and Commerce Chairman Henry Waxman assured Republicans and Democrats that the still-pending amendments — 55 in all — would be considered at a second markup this fall.

The changes will form a second, separate bill and will be combined with the overhaul in the Rules Committee.

Confused yet? Join the crowd. The Indiana business attendees and Chamber staff will seek some clarity from the nation’s capital.