With #Senate #Republicans still celebrating their success in voting through a highly controversial #tax bill, their colleagues in the House of Representatives have already begun the process of reconciling it with the bill they passed last month. On Monday, House Republicans voted to send the two bills to a joint House-Senate conference committee that will be tasked with drafting final legislation. The Republicans also named their five appointees to the committee: Representative Kevin Brady, of Texas, the head of the powerful Ways and Means Committee, will lead the process.
Both the House and the Senate will have to vote again on the final bill, but Republican leaders are expressing confidence that they’ll be able to get legislation to the President by Christmas. “This is the moment and the opportunity that we—and so many Americans—have worked for and waited for,” Brady said in a statement. “Now is the time to seize it. And working together—working truly together—I’m confident we will.” Kevin McCarthy, the House Majority Leader, said, on CNBC’s “Squawk Box,” “We can work and have this done this year.”
This confidence may be justified. Republicans have spent all year trying to get a major piece of legislation passed; falling short on their tax plan, with an election year looming, would be an unmitigated disaster for the Party. Reaching an agreement on the final bill, however, is far from a mere technicality. While the House and Senate bills are broadly similar, they differ in a number of significant details. And, in tax policy, the devil is almost always in the details.
For example, the bill passed in the House would abolish the individual and corporate alternative minimum taxes, which are designed to insure that households and firms pay at least a certain amount of tax no matter how many deductions they have and how clever their accountants are. For revenue reasons, the Senate, in its version of the bill, decided to modify the A.M.T. rather than abolish it. Yet McCarthy, in his CNBC interview, insisted that the corporate A.M.T. has to be eliminated. House Republicans also vehemently oppose keeping the personal A.M.T., and here they are likely to have an ally in the White House. In 2005, the most recent year for which we have seen Donald Trump’s tax returns, being forced to pay the A.M.T. raised his tax burden considerably.
Then there is the estate tax. Under the House bill, this tax—which hits on a few thousands bequests each year—would eventually be eliminated. In the Senate version, the threshold for being subjected to the tax would be doubled to eleven million dollars, but the tax would remain on the books. Other politically sensitive differences between the two bills include how they treat sick people and college students. Under the House bill, households that run up big medical bills would no longer be able to deduct the cost from their taxes, and college-tuition waivers would be treated as taxable income. The Senate bill doesn’t include either of these provisions, which the tax writers in the House included to raise revenue.
Even if the Republican conferees can reach an agreement on these provisions, there are two explosive non-tax issues that need to be resolved: the fate of the individual mandate to purchase health insurance, and the legal protections afforded to people who were brought to this country as undocumented immigrants when they were children—the “Dreamers.” Senate Republican leaders, in their drive to get to fifty-one votes, made lpledges regarding these issues to two key senators: Susan Collins, of Maine, who helped defeat the G.O.P. effort to repeal Obamacare; and Jeff Flake, of Arizona, who is a fierce critic of President Trump.