September 15, 2021
The House Ways and Means Committee on September 15th concluded public meetings on its part of the $3.5 trillion budget reconciliation bill that House Democratic leaders hope will pass their chamber in the not too distant future.
Before voting 24-19 to advance the legislation out of committee, the panel debated 66 amendments, but none of them were adopted.
The legislation includes roughly $1.2 trillion in tax cuts and $2.1 trillion in tax increases, which amounts to a net tax increase of nearly $900 billion over the next ten years. Details on those provisions is here.
Much of the debate during today’s meeting focused on the tax increases that are in the legislation, which include:
Except for the increase in the capital gains rate, the changes are generally proposed to be effective after December 31, 2021.
The House Ways and Means Committee is not the only House committee drafting legislation for the budget reconciliation bill. Currently, the goal is for all the House committees to complete their bills by September 15th (today) and submit them to the House Budget Committee where they will be combined into one piece of legislation. It is not clear if all committees with meet this deadline.
Once the bill is assembled, the House Budget Committee is expected to approve this legislation. It then will be the subject of a House floor vote.
Certain House leaders want a floor vote on the budget reconciliation bill by September 27th so that the chamber can also vote on the $1.2 trillion Bipartisan Infrastructure Bill, which has already passed the Senate. More information on the infrastructure bill is here.
At this point, it is not clear if the House’s majority party has the votes to pass the budget reconciliation bill or the $1.2 Bipartisan Infrastructure Bill. The reason: passage of one bill depends on the passage of the other and certain lawmakers disagree on which bill should be voted on first.
A lot of issues remain unresolved when it comes to the budget reconciliation bill. Congressional Democrats are the only members expected to support it and they have disagreements over how high to raise taxes and which tax provisions should receive an increase. There are also disagreements over the spending portion of the bill and whether or not to use the legislation to increase the debt ceiling.
These dust-ups likely mean that modifications are inevitable for the legislation and that could include tax changes even though the House Ways and Means Committee has completed its work on the bill. Tax amendments could be proposed during the House Rules Committee meeting on the bill. At this point, it is not clear if that will occur, but it is possible.
Assuming the legislation passes the House, it then travels to the Senate where leaders in that chamber will make changes to the House-approved bill. Roll Call, a Washington “insider” newspaper, reported the following today:
Senate Democrats on Tuesday began vocalizing the many ways in which they expect their reconciliation package to differ from the legislation House committees have been marking up, with some of the biggest disagreements occurring in the tax, health care and climate policy arenas.
The Senate Finance Committee wants to directly tie energy tax credits for business to a reduction in their carbon output, to ensure millionaires and billionaires cannot pass on stocks and other assets to heirs without having to pay taxes and to increase financial reporting for tax compliance. Those are goals panel Democrats say the House Ways and Means Committee legislation does not meet.
The fact that the Senate will reportedly make changes to the bill is a bit of a surprise. House Democratic leaders have been stressing for weeks that they were writing the bill so it could pass the Senate. That reality seems to have changed.
The tax-writing Senate Finance Committee is expected to make the following additions to what the House Ways and Means Committee approved:
These proposals are from the Senate Finance Committee and it is unclear if House and Senate leaders will support them.
If the chambers produce different bills, those differences must be hashed-out before the legislation can pass Congress. Reaching consensus will be time consuming and puts in jeopardy the House goal of approving the bill by September 27th. A finalized product might slip into October, or even later. At this point it is hard to predict.
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