Both the U.S. House of Representatives and the Senate are beginning the process of reconciling the two separate tax reform bills recently passed in each chamber of Congress. While there are many similarities in the two bills, sufficient differences remain to dismiss the thought that the reconciliation process will be a slam dunk.
While the House passed its bill several weeks ago (see post), the Senate just approved its version in an early morning vote on Saturday, December 2 (see post). The full text of the Senate’s engrossed amendment to HR 1, as approved, has now been made available.
The goal of reconciliation, as one might imagine, is to iron out the differences in the two bills and amalgamate them into a single piece of legislation that will gain approval in both chambers. The final bill, which will be created by a conference committee, is generally referred to as the “Conference Report.” The make-up of the conference committee is through a selection process, in which members in each chamber are specifically chosen for the assignment.
It is currently thought that any final Conference Report will align more with the Senate’s version of the bill than the House’s because that bill more closely complies with the Senate budgetary rules.
House of Representatives – Status
By process, the House voted 222-192 on December 4, to move its bill to conference. The no votes included a number of Republicans. Later, Speaker Paul Ryan announced his picks for the conference committee. The members include: House Ways and Means Committee Chairman Kevin Brady (R-TX), who was chosen as conference chair, and fellow members Devin Nunes (R-CA), Peter Roskam (R-IL), Diane Black (R-TN) and Kristi Noem (R-SD).
House Minority Leader Nancy Pelosi (D-CA), announced her Democratic picks for the committee conference. They include: Ways and Means ranking member Richard Neal (D-MA), Sander Levin (D-MI), who recently announced his upcoming retirement, Lloyd Doggett (D-TX), Raúl Grijalva (D-AZ) and Kathy Castor (D-FL).
Senate – Status
The Senate is expected to hold its own vote on heading to conference with the House at some point this week. The exact timing for this vote is currently unknown.
Corporate Tax Rate
On another note, it looks as though the permanent corporate tax rate cut to 20%, as proposed by both the House and Senate, will remain in the new bill.
Some questions had arisen as to the likelihood of this provision when the President recently suggested to the media that he would be open to discussing a movement in the corporate tax rate proposal to 22%. The two percentage points could help raise revenue for other cuts, but Senate leadership, at this time, is not open to the change.
The Senate bill currently calls for the 20% corporate rate to begin in calendar tax year 2019, while the House version has the 20% rate set to start immediately in 2018. Both bills would make the 20% rate permanent. This is in stark contrast to many of the individual proposed changes, which are temporary. Most would only be in effect until the calendar tax year 2025.