The tax-writing House Ways and Means Committee on Tuesday took its first public step toward creating recovery legislation (dubbed “Build Back Better”) without Committee Republicans participating in the hearing.
Rep. Kevin Brady (R-Texas), the Committee’s ranking member, deemed the hearing to be “nothing more than a partisan exercise” and announced that “Republicans will not participate in this event.”
The hearing scheduled a bipartisan collection of over twenty lawmakers to testify on the policy issues they believe the committee should include in the upcoming recovery bill. Congressional leaders are at the beginning stages of creating this legislation and it will likely be weeks (if not months) before a final draft is introduced.
Unlike most hearings, today’s event did not allow Committee members to question the witnesses about the policy issues they promoted. Instead, the lawmakers who appeared before the panel stated their positions without comment or questions from Committee members. In a normal hearing, witnesses are questioned, and sometimes berated, by lawmakers on the positions they espoused.
One of the policy issues raised multiple times during today’s hearing was repealing the cap on the State and Local Tax Deduction (SALT). The 2017 tax reform bill capped the SALT deduction to $10,000. This limitation is for taxable years beginning after December 31, 2017, and before January 1, 2026. Lawmakers appearing before the panel stressed that repealing the limitation was needed because middle-income taxpayers have been financially hurt by the $10,000 cap.
Other policy issues repeatedly raised during the hearing were lowering health care costs for low- and middle-income earners, and permanently extending the Child Tax Credit that was expanded for 2021 in the recently enacted $1.9 trillion rescue bill. Several other policy issues were also raised on a wide range of topics, from pension reform to combating climate change.
Policy issues that were not raised at today's hearing included President Biden’s campaign promise to increase the corporate income tax rate from 21% to 28% and undoing tax deductions for joint filers with adjusted gross income of at least $400,000. It has been widely reported that these two items are expected to partially offset the cost of the recovery bill.
The fact that these measures were not mentioned during today's hearing will likely have no bearing on whether they are used to offset the cost of the upcoming legislation. In other words, expect them to be incorporated into the forthcoming bill.
The House Ways and Means Committee has been charged with partially offsetting the cost of the “Build Back Better” recovery bill, which could cost between $3 trillion and $4 trillion over ten years. It is expected that the tax-writing committee could offset between $500 billion and $2 trillion of the legislation’s total cost.
The House Transportation and Infrastructure Committee has been charged with creating provisions in the bill that pertain to infrastructure, climate change and health care. This Committee will hold its first hearing about this legislation on April 14.
The Build Back Better legislation is the second piece of legislation that President Joe Biden seeks to sign into law to help the economy rebound from the damage done by COVID-19. It is currently not clear when Congress will complete its work on this bill, but some have suggested that it could take until September to advance this bill to the White House.
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