Tax Policy Update

DRAMA OF THE WEEK: GOVERNMENT SHUTDOWN

New Year, Same Drama. Lawmakers are facing yet another potential government shutdown — the current continuing resolution (“CR”) is set to expire on Jan. 19. Congress must pass another short-term funding bill to avert a shutdown. Despite weeks of negotiations, a long-term spending deal is still out of reach. The sticking points remain the same: discretionary spending levels, DACA, and border security.

Republican leaders are considering a CR through Feb. 16 with a six-year reauthorization for the Children’s Health Insurance Program or “CHIP.” Based on the House bill released last night, the new CR will also include a two-year delay of the medical device tax and Cadillac tax as well as a one-year delay of the health insurance tax. The bill may get a vote in the House as early as Thursday.

It is unclear, however, whether Senate Democrats will help pass another temporary funding patch without a fix for Dreamers whose legal status has been in limbo since the Trump Administration announced that it was ending the DACA program. Republicans would rather address the issue in a separate bill.

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