Pardon Our Dust
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QUOTE OF THE WEEK
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“I don’t see a comprehensive healthcare plan this year.” – Sen. Richard Burr (R-NC) Photo credit: Getty |
As Senate Republicans return from a week-long recess, they are morepessimistic than ever on the chances of passing health care reformlegislation this year. A few members have come to terms with reality andare trying to manage expectations on what the upper chamber can accomplishin the 35-day work period before summer recess.
Given the deep divisions on major issues, the Senate has a long road aheadbefore they can reach a consensus on which approach to take. Despiteyesterday’s announcement that a vote will be held before the July 4 recess,Senate Majority Leader Mitch McConnell (R-KY) has indicated that it will bedifficult for the Senate to garner the 51 votes necessary to pass healthcare reform. Others, including Sens. Jeff Flake (R-AZ) and Ron Johnson(R-WI), have echoed these views, noting that the Senate may have to pass ashort-term fix and save comprehensive reform for a later date. Bucking theglass-half-empty attitude is Sen. John Cornyn (R-TX) who thinks the Senatewill vote on the American Health Care Act (AHCA) before the Augustsummer recess.
The Senate will get its first look at detailed options for the health carereform legislation later today, after the GOP’s weekly lunch.
LEGISLATIVE LANDSCAPE
With My Mind on My Money. While Senate Republicans may have distanced themselves from theCongressional Budget Office’s discussion of the number of uninsured underthe House-passed AHCA, there are certain cold, hard numbers the GOP can’tescape. Due to arcane rules governing the budget reconciliation process,the CBO score establishes the budget baseline for the Senate bill. Sincethe Senate is bypassing the regular committee markup process, this meansthat the Senate must save as much money in its healthcare bill as the Housedid in its version of the AHCA.
The CBO found that the AHCA saves $119 billion over 10 years, with on-budget savings of $133 billion. As a result, the Senate bill must…
Pen(cil) to Paper. During last week’s recess, Sen. Mike Enzi’s (R-WY) staffers started writingportions of the healthcare legislation. They have put together variousideas, while mulling over the tradeoffs. Staffers have also compiled a listof pending decisions senators still have to make in the coming weeks. Thehealthcare discussion continues to focus on four major categories …
2017 Tax Covfefe. Given all the policy and procedural hurdles facing tax reform, there’s agood chance that efforts to overhaul the tax code will spill into 2018. IfRepublicans choose to rush through the process in 2017, however, they mayend up with nothing more than a tax cut bill at the end of the year.
Administration officials went on the record last week to knock down suchtalks. “We’re going to make sure that this is tax reform, not just taxcuts, and that they’re paid for,” Treasury Secretary Steven Mnuchin said inan interview with Fox Business. National Economic Council DirectorGary Cohn has backed up Mnuchin’s statement, saying that the administrationis focused on doing “the big reform and cut.” Cohn also added that theadministration will send a “very detailed” tax plan to Congress after theAugust recess. Cohn’s timeline lines up with …
Check Under That Couch Cushion Again. The last few editions of the Tax Policy Update zeroed in on someexciting tax reform issues like revenue neutrality, interest deductibility,and the border adjustment tax. These are all timely discussions given thatstaffers on the Senate Finance Committee have been on the hunt forpotential revenue raisers, digging up old tax proposals from 2014.
The revenue-hunting exercise makes sense, as the Senate is unlikely toaccept the House GOP’s proposal to gut the net interest expense deductionand impose a border adjustment tax (“BAT”) — two provisions withsignificant revenue potential. If the Senate is intent on …
The Great Revival. On May 26, the House Sustainable Energy and Environment Coalition sent aletter to the leaders of the House Ways and Means Committee, calling for afix to the investment tax credit (“ITC”) so that it covers the clean energytechnologies that were omitted from the 2015 omnibus-extenders package. Asour readers may recall, the five-year renewal of the ITC did not includealternative sources such as fuel cells, geothermal projects, and certainwind projects. Democrats have failed on several occasions to fix theomission.
A similar effort is taking place in the Senate, where a small bipartisangroup of senators are looking to join forces and push for the ITC fix aswell as other clean energy tax credits. This group will likely includeSens. Tom Carper (D-DE), Chris Coons (D-DE), Lindsey Graham (R-SC), TimScott (R-SC), Heidi Heitkamp (D-ND), and Sheldon Whitehouse (D-RI).
ROAD WORK AHEAD
Infrastructure Week Déjà Vu. Evidently someone at the White House decided that last month’s 5 th Annual Infrastructure Week was in need of an extension (ortotally missed the very exciting events that comprised the officialInfrastructure Week itinerary). Either way, President Trump has taken itupon himself to pursue his own branding of seven days dedicated todiscussing infrastructure.
Kicking things off, the Trump Administration outlined its vision forprivatizing – or more correctly “corporatizing” – air traffic control (ATC)operations away from …
COMMANDER-IN-TWEET
LINE ITEMS
- The Internal Revenue Service is planning to release more guidance for Obamacare’s Cadillac tax, despite uncertainty about the health law’s future. Phil Lindenmuth, health care counsel at the IRS Office of the Associate Chief Counsel, indicated that though issuing guidance is not a top priority, the agency may still work on regulations this year.
- A senior technical reviewer in the IRS Chief Counsel’s Office stated that they are not considering issuing further extensions for Section 871(m) withholding and reporting, despite acknowledging that financial institutions are generally still building out and implementing derivatives-tracking systems.
- The Organization for Economic Cooperation and Development released its public discussion draft entitled “Implementation Guidance on Hard-to-Value Intangibles” and is requesting comments by June 30, 2017. The draft is aimed at preventing base erosion and profit shifting by moving intangibles among group members.
- According to SEC Chairman Jay Clayton, the commission is planning to update its assessment of the current market for retail investment advice. As part of this effort, the SEC has invited interested parties to give their input prior to the start of any official rulemaking. Clayton’s announcement came shortly after the Labor Department decided to maintain the June 9 applicability date for the Fiduciary Rule.
- An updated version of the Financial CHOICE Act will not include language to repeal the Durbin Amendment — a provision in Dodd-Frank that requires the Federal Reserve to cap debit card interchange fees charged by banks.
- House lawmakers are aiming to finish up their work on the FY 2018 budget resolution, which will carry the reconciliation instructions to be used for tax reform. The budget blueprint is expected to be released during the week of June 12.
IN THE QUEUE
Tuesday, 6/6
Senate Banking Committee
Nominations hearing: Mr. Kevin Allen Hassett, to be Chairman, Council ofEconomic Advisers; The Honorable Pamela Hughes Patenaude, to be DeputySecretary, Housing and Urban Development.
Wednesday, 6/7
Senate Commerce Committee
Full committee hearing on FAA reauthorization with TransportationSecretary Elaine Chao testifying.House Budget Committee
Full committee hearing on “The Economic and Fiscal Benefits of Pro-GrowthPolicies.”House Financial Services Committee
Full committee hearing on national flood insurance reform.House Transportation and Infrastructure Committee
Subcommittee hearing on “Building a 21st Century Infrastructure forAmerica: Coast Guard Sea, Land, and Air Capabilities.”House Ways and Means Committee
Health subcommittee hearing on “Promoting Integrated and Coordinated Carefor Medicare Beneficiaries.Senate Finance Committee
Nominations hearing: Eric D. Hargan, of Illinois, to be Deputy Secretary ofHealth and Human Services, United States Department of Health and HumanServices; David Malpass, of New York, to be an Under Secretary of theTreasury, United States Department of the Treasury; Brent James McIntosh,of Michigan, to be General Counsel for the Department of the Treasury,United States Department of the Treasury.
Thursday, 6/8
House Appropriations Committee
Subcommittee hearing on the CFTC budget.House Appropriations Committee
Subcommittee hearing on the Housing and Urban Development’s budget.House Ways and Means Committee
Full committee hearing on the HHS’s FY 2018 budget request. HHS SecretaryTom Price is set to testify.Senate Finance Committee
Full committee hearing of the president’s FY 2018 budget. HHS Secretary TomPrice is set to testify.
Agency Activity
Wednesday, 6/7
IRS
Meeting of the Advisory Group to the Internal Revenue Service Tax Exemptand Government Entities Division (TE/GE).
Thursday, 6/8
CFPB
Public meeting of the Consumer Advisory Board (CAB or Board) of the Bureauof Consumer Financial Protection (CFPB or Bureau). The notice alsodescribes the functions of the Board.IRS
Open meeting of the Taxpayer Advocacy Panel Notices and CorrespondenceProject Committee will be conducted. The Taxpayer Advocacy Panel issoliciting public comments, ideas, and suggestions on improving customerservice at the Internal Revenue Service.
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The McGuireWoods’ Tax & Financial Services Policy Group assists clients in understanding how the latest legislative and regulatory proposals anddecisions may impact their business and industry. To learn more about how our team can help you monitor, analyze, and navigate all relevant legislativeand regulatory developments, please contact any of our attorneys and consultants below at (202) 857-1700. For more information on how to subscribe toour weeklyTax Policy Update and tax news alerts, please contact Radha Mohan, rmohan@mwcllc.com, (202) 857-2944.
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