The long-awaited and expected tax reform plan, scheduled to be released today, has been pushed back to Thursday. The announcement came late Tuesday night after lawmakers spent most of the day hashing out the details. Despite the optimism of the president and committee members, House Republicans didn’t meet the first of their self-imposed ambitious deadlines. According to CNN politics, the leadership along with President Trump agreed to delay the release of the pro-growth tax reform plan one day,
Kevin Brady, Chairman of the Ways and Means Committee, said, “We are making excellent progress. We are very close to what we set out to do, bold, pro-growth tax reform.” However, the delay could also indicate obstacles previously met by the leaders and a few of their members.
Some of the most pressing issues to include how to pay for it, state and local tax changes, and 401K retirement plans. In a report by NBC NEWS, the budget, passed last week, allows Republicans to spend as much as $1.5 trillion, however experts at the Tax Policy Center believe the proposed tax cuts will cost over $2 trillion. So, the tax writers will either have to raise revenues by eliminating or reducing deductions or downsize. Of the 20 House Republicans that voted against the budget last week are from high-tax states such as New Jersey and New York. They voiced strong opposition to the proposed scrapping of the State and Local Tax (SALT) deduction because of the adverse impact on their respective constituents. The president tweeted there will be “NO change” to the tax preferences to the popular retirement programs. However, Brady said, “We are exploring a number of ideas in those areas.” He declined to rule out changes, saying “We think in tax reform we can create incentives for Americans to save more and save sooner, which can help.”
After the failed try to repeal the Affordable Care Act, the Trump administration and congressional Republicans are eager to achieve this significant legislation. In fact, it’s essential for Republicans to keep their respective majorities in the 2018 elections, according to FOX News. Senator Lindsey Graham (R) South Carolina, believes the GOP understands the urgency saying, “If we fail on taxes that’s the end of the Republican party’s governing majority in 2018. We’ll lose the House, probably lose ground in the Senate.” Graham also believes Trump’s subsequent success may be impossible with Nancy Pelosi running the House.
Upon their return from their August recess, Republicans have been laser-focused on tax reform. This setback, albeit minor, may prove to be the leverage special interest groups need to mobilize against the bill. Speed is of the essence to get the proposal onto the president’s desk by Christmas. The margin is slim for both time and votes. Senate Majority Leader Mitch McConnell cannot lose more than two of his members. If three vote against it, Republicans cannot pass their tax cut.
By Jireh Gibson
Sources:
Fox News: House Republicans postpone tax reform rollout
CNN Politics: Republicans grapple with tax reform as bill release is delayed
NBC NEWS: Five Issues That Could Sink the Trump-GOP Tax Plan
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