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Jumping into the fine print of the Senate GOP tax reform bill

Published: Friday, November 10, 2017 @ 2:47 PM

As Republicans in the Congress press ahead with their legislative plans for major reform of the federal tax code, GOP leaders hope to hold a vote in the House late next week, while a key Senate committee will begin work on Monday on that chamber’s version of a sweeping tax reform measure.

Like the House bill, there are some interesting items in the fine print that may not grab the headlines in your local newspaper.

Here’s a few to chew on:

1. No more tax breaks for those who bicycle to work. Most people probably have no idea that you could ride your bicycle to work, and be eligible for a “qualified bicycle commuting reimbursement” of up to $20 per month. This was started because there were federal tax breaks for people who took mass transit to work, where employers could give money to their workers to help pay for their subway or train tickets, and that cash would not be considered as income. How much money will getting rid of the bicycle commuting reimbursement save Uncle Sam? The estimate that accompanies the new Senate tax reform bill is so small that it is qualified as being “less than $50 million” over ten years.

2. No more tax deductions for war profits. I learn something every day that I report from Capitol Hill. I did not recall that under current law, you are allowed to deduct: “State, local real and foreign property taxes; State and local personal property taxes; State, local and foreign income, war profits , and excess profits taxes.” The Senate GOP tax reform plan specifically says no more deduction for war profits in the future – and I guess I didn’t read the House plan closely enough, because the GOP tax reform bill would also do away with that deduction in the future. There is a reason that the fine print is important.

3. Changes dealing with your home. Under current law, you can deduct the interest on up to $100,000 of a qualifying home equity loan, but the House bill moved to end that write-off, and the Senate bill does the same. Also, the Senate takes a step in the direction of the House bill by extending the amount of time that you need to own (and live in) your principal residence, before you can sell it, and take advantage of the rules on tax-free capital gains ($250,000 for an individual, $500,000 for a couple). The Senate extends that time frame to five years, up from the current two.

4. A new category of income for tax reporting purposes. “The proposal creates a category of income defined as “passenger cruise gross income,” it states in the explanation of the Senate tax reform bill. Think about this for a second. If you get on a cruise ship somewhere in Florida, and then you go around the Caribbean for a week, and then return to the U.S., what happens with all of the money that you and other passengers spend on that ship? Does it get taxed? Or is it just sort of in limbo, outside the reach of U.S. taxation? It’s an interesting little thing to think about. It’s estimated this provision would bring in $700 million over 10 years, so it’s not a big moneymaker for Uncle Sam.

5. Tax simplification for business – not so much. There is a lot of talk about how this plan would simplify the tax code, and while that would be true in some respects for individuals (if you don’t make enough money, and don’t have investments, or large deductions to itemize), that’s not true on the business side of the tax equation. Reading through the explanation of the Senate bill makes that brutally obvious. “The proposal addresses recurring definitional and methodological issues that have arisen in controversies in transfers of intangible property for purposes of sections 367(d) and 482, both of which use the statutory definition of intangible property in section 936(h)(3)(B),” it reads in one part. One thing is for sure, tax accountants and tax lawyers will still be a good place to make money in the future, as this Senate bill won’t reform them out of business.

6. Wait, where is the bill? This is one interesting part about the Senate tax reform proposal. There really isn’t a bill – there is a description and explanation of the GOP proposal, but no actual bill language. Back during the development of the Obama health law, Democrats did the same, as the chairman of the Senate Finance Committee steered that plan through by dealing in ‘plain English’ first, and then bill language later. But to this reporter, it always seems odd that the committee will release the details of a bill on miscellaneous tariffs, but not bill language on a major tax bill, where the technical language is so very important, as we saw in the House. Instead of the bill text, you can read the explanation of the Senate bill, which is still 253 pages in all.

Happy reading. The Senate Finance Committee markup starts on Monday.

The House is expected to vote on tax reform late next week; a Senate vote would come after Thanksgiving.

 

Some political ‘thanks’ on Thanksgiving

Published: Thursday, November 23, 2017 @ 2:49 PM

On every Thanksgiving, it’s always nice to take some time and think about what you and your family are thankful for in 2017 – but at the same time, we may as well try to figure how Turkey Day is playing in political circles as well.

In terms of political news, reporters on Capitol Hill and Washington, D.C. are currently going through an almost never-ending avalanche of stories, erupting daily (or even hourly) in what seems to be a high rate of speed in this new social media atmosphere.

Let’s take a look at a few things on this Thanksgiving 2017:

1. Roy Moore – Roy Moore might be thankful for a lot right now, mainly a number of men in high profile positions in the Congress and the news media who have been ensnared in the recent swarm of news about sex. The latest person to hit the news – and take the focus off of Moore – is Rep. Joe Barton (R-TX), who had a nude photo of himself leaked on to social media by a woman he was once in a relationship with, which some say might be ‘revenge porn.’ No matter what the details might be of how this occurred, the Barton story is a reminder of the perfect piece of advice that my father gave as he dropped me off at the U.S. Capitol on my first day of work in 1980, when he told me that ‘They call it the House of Representatives for a reason” – members of Congress are no different from our neighbors and friends. Some are good. Some are bad. Some make bad choices along the way. Roy Moore is thankful for Al Franken, John Conyers, Joe Barton, Charlie Rose, and many others. Their stories keep Moore out of the headlines.

2. President Donald Trump. – Mr. Trump may be most thankful for political opponents like Hillary Clinton, who continues to be a Trump punching bag on Twitter. While many Inside the Beltway cringe at “Crooked Hillary” tweets, those missives continue to delight the President’s legions of fans, as it helps to keep the 2016 Democratic Presidential nominee in the news. (While Mr. Trump is probably also thankful for sports figures like Lavar Ball, Steph Curry, Richard Sherman, and others, I’ll stick to the political arena.) Over the last year, this President has proven himself to be very adept at verbally smacking people on Twitter – whether you think it’s right or wrong for Mr. Trump to be doing that isn’t the point. The longer that President Trump can keep Hillary Clinton in the news, the better for him, and maybe the better for the Republican Party. Donald Trump is thankful that Hillary Clinton is still around.

3. Tax lawyers and accountants. – Yes, Republicans say their tax reform plan will make the tax code simpler to deal with, and for some individuals, it would be easier to file your taxes under the plans envisioned in the House and Senate. But before you think that it’s going to change everything, a simple review of Congressional tax plans shows there will be plenty of work for people who need to explain the intricacies of the tax code, like tax lawyers and accountants. You don’t have to go very far into the GOP bills to feel confused about what’s being changed. Tax lawyers and accountants are thankful for the GOP tax reform bill. There will still be plenty of business for them, even if that bill becomes law.




4. Federal workers. All the talk for years from Republicans has been about making deep cuts in the budget of various federal agencies. On the campaign trail, President Trump promised much the same. But this first year of a combination of a GOP House & Senate, and the Trump Administration, produced almost nothing in terms of spending cuts and budget savings. Last week, the White House proposed $44 billion in (generic) budget savings to offset disaster aid for recent hurricanes – except it would come between 2025 and 2027, when Mr. Trump would be long gone from the White House. So, as they enjoy a big turkey dinner, federal workers can say ‘thanks’ that the Republican Congress and the President, as they really haven’t been able to wield a budget axe on the Executive Branch. Mr. Trump said before Thanksgiving that he would push for budget cuts in the next year. On Thanksgiving, President Trump visited a Coast Guard facility in Florida. Back in April, Mr. Trump wanted to cut over a billion from the Coast Guard budget. That didn’t make it through the Congress.

5. Politics at Thanksgiving. A year ago, the recent election of Donald Trump was a prime topic for many families, as a lot of Democratic voters were struggling to come to terms with President Trump’s election. Fast forward to Thanksgiving 2017, and it’s possible that a lot of those same people are still somewhat aggravated about the way things have gone in political circles after Mr. Trump’s first 10 months in office. And that leads me to believe that some of you will have a few things to say at the dinner table about President Trump, good and bad. Some will be saying “thanks” for the President – others, not so much. But it isn’t hard to argue over whether you should talk about politics at the table, eh?

Congress: Only 2 bills sponsored by Ohioans became law in 2017

Published: Friday, November 24, 2017 @ 8:00 AM
Updated: Wednesday, November 22, 2017 @ 4:03 PM


            Capitol
Capitol

If success in Congress is measured by the bills a lawmaker passes, then it’s been a lackluster year for Ohio’s 16 House members and two senators.

But then, it hasn’t exactly been a banner year for Congress, either.

The state’s congressional delegation this year has served as the original sponsors of 304 bills — bills that would do everything from create a commemorative coin honoring writer Maya Angelou and bills that would make it tougher to receive federal food stamps.

Of those, 11 passed the House as standalone bills. Eight passed the Senate. Two — one sponsored by Rep. Bill Johnson, R–Marietta and one sponsored by Sen. Rob Portman, R–Ohio — have become law.

That’s compared to 82 laws that Congress has passed this year out of 9,939 bills introduced.

One of the most productive Ohio lawmakers to date is Portman. He introduced 42 bills to date this year. Six passed the Senate. One — a bill that reauthorizes research for early detection, diagnosis and treatment of hearing loss in babies and young children — became law. In the House, a Johnson bill that undid one of President Obama’s environmental regulations related to stream protections became law.

But Portman’s staff is quick to point out that those 42 bills are only the ones where he’s the chief sponsor. Portman sponsored or cosponsored 198 bills in 2017. Of those, 36 passed the Senate.

By comparison, Sen. Sherrod Brown, D–Ohio, introduced 64 bills. Two — one to designate Sept. 16 as Isaac M. Wise Temple Day in honor of a synagogue in Cincinnati and one designating Feb. 28 as Rare Disease Day — passed the Senate. None became law.

But Brown sponsored or cosponsored 439 bills — the second-highest number of anyone in the delegation — and he had more success on that front. Of those 439, 42 passed the Senate and five became law.

In the House, Rep. Tim Ryan, D–Niles, has spent much of this year introducing bills — 22, in fact, more than any other Ohioan serving in the House. He’s sponsored or cosponsored 446, more than any other Ohioan. None of the bills he has led have passed the House; of the 446 he has cosponsored, 18 passed the House and six became law.

On the opposite end of the spectrum, Rep. Jim Jordan, R–Urbana, has introduced two bills — one to make it harder to receive food stamps and another to repeal the 2010 health care law known as Obamacare. Both of those bills remain stuck in committee.

Many lawmakers get things done by using larger bills as a vehicle. Rep. Mike Turner, R–Dayton, introduced 11 bills to date this Congress. Three — one aimed at helping survivors of sexual abuse in the military report crimes against them, one to keep the National Aviation Hall of Fame in Ohio and one to implement safety requirements for windows in military housing — were tucked into the National Defense Authorization Act. That bill has passed through Congress and awaits President Trump’s signature.

Three other bills dealt with health care reform. Two of those initiatives were in the House passed bill that later failed in the Senate, meaning the provisions essentially passed the House. And one is opioid-related — Turner hopes to tuck it into a larger bill next year.

The Center for Effective Lawmaking — a joint project between Professor Craig Volden of the University of Virginia and Alan E. Wiseman of Vanderbilt — studies 15 factors including bills sponsored, bills passed or bill movement in committee to determine who is the most effective lawmakers in Congress. They also factor in whether the lawmaker is in the majority or minority; it’s harder to get something done in the minority. And they look at whether the bills or symbolic – such as naming a post office – or substantive.

Among Ohio’s members, Rep. Steve Chabot, R–Cincinnati was deemed the most effective, coming in seventh out of 250 Republicans. Turner was 202 out of 250 Republicans. Rep. Brad Wenstrup, R-Cincinnati, was 91 out of 250 Republicans.

On the bottom end of the spectrum, Reps. Jim Jordan, R–Urbana and Warren Davidson, R–Troy, both ranked 249 out of 250 Republicans.

In the Senate, Brown, came in 26th out of 44 Democrats. Portman came in 14th out of 54 Republicans.

Volden said statistically, a few factors have helped indicate effectiveness: Being in the majority helps, as does being a committee chair or subcommittee chair. Seniority helps as well.

But he’s seen more subtle factors as well. Those who have served in some of “the more professional” state legislatures — the ones that meet year round, collect a salary and are considered a full-time job — are far more effective on average than the citizen legislatures that don’t meet often.

“The ones we’re most impressed by are the folks who are continuing to perform above expectations Congress after Congress after Congress,” he said.

Donald Wolfensberger, director of the Congress Project at the Woodrow Wilson International Center for Scholars was curious about whether Congress has actually slowed down in progress, so he compared the January through September of Trump’s first year to those same months during President Barack Obama’s first year in office.

He found that while the House voted more frequently during the first few months of Obama’s administration, the number of laws passed wasn’t that different — 65 under Obama, 64 under Trump. That number, however, doesn’t take into account the differences between the depth or scope of the laws passed.

His takeaway? “Both houses are still dysfunctional,” he said. “And I just don’t know what the solution is other than the big judgment day coming next year in November.”

“This is not exactly a convivial atmosphere in which to get a lot done,” he said.

Southwest Ohio congressional delegation at a glance, 2017

Rep. Steve Chabot, R-Cincinnati

Bills introduced: 18

Bills cosponsored: 213

Bills that passed the House: 2

Cosponsored bills that passed the House: 36

Cosponsored bills that became law: 9

—-

Rep. Warren Davidson, R-Troy

Bills introduced: 12

Bills cosponsored: 84

Bill that passed the House: 1

Cosponsored bills that passed the House: 16

Cosponsored bills that became law: 4

—-

Rep. Jim Jordan, R-Urbana

Bills introduced: 2

Bills cosponsored: 82

Cosponsored bills that passed the House: 13

Cosponsored bills that became law: 2

—-

Rep. Brad Wenstrup, R-Cincinnati

Bills introduced: 13

Bills cosponsored: 108

Bills that passed the House: 2

Cosponsored bills that passed the House: 23

Cosponsored bills that became law: 8

—-

Rep. Mike Turner, R-Dayton

Bills introduced: 11

Bills cosponsored: 138

Cosponsored bills that passed the House: 13

Cosponsored bills that became law: 3

—-

Sen. Sherrod Brown, D–Ohio

Bills introduced: 64

Bills cosponsored: 439

Bills that passed the Senate: 2

Cosponsored bills that passed the Senate: 42

Cosponsored bills that became law: 5

—-

Sen. Rob Portman, R–Ohio

Bills introduced: 42

Bills cosponsored: 198

Bills that passed the Senate: 6

Bills that became law: 1

Cosponsored bills that passed the Senate: 36

Cosponsored bills that became law: 2

Source: Congress

Hatch to Sherrod Brown: ‘Don’t spew this stuff at me’

Published: Friday, November 17, 2017 @ 10:26 AM

Sen. Hatch Shouting Down Sen. Sherrod Brown on Tax Bill. Video courtesy of CNN

Sen. Sherrod Brown and Senate Finance Committee Chairman Orrin Hatch are garnering attention today for a yelling match they had last night a hearing over the tax reform bill working its way through the Senate.

Hatch, a Utah Republican, took umbrage at comments by Brown saying the tax bill will help the rich at the expense of the poor.

“This tax cut is really not for the middle class,” Brown said. “It’s for the rich.”

Calling it “a nice political play,” Hatch told Brown “I’ve been here working my whole stinking career for people who don’t have a chance, and I really resent anybody saying that I’m just doing this for the rich.”

Brown, an Ohio Democrat, meanwhile, shot back that the public believes that the bill primarily benefits the wealthy. “I get sick and tired of the richest people in the country getting richer and richer,” he said over shouts calling for regular order. “We do a tax cut for the rich and the middle class loses.”

Hatch said that he came from the lower-middle class. “We didn’t have anything,” he said. “So don’t spew this stuff at me. I get a little tired of that crap.”

“I like you personally very much but I’m telling you, this bullcrap you throw out really gets old after awhile,” he said.

The fight came during the final day of the Senate Finance Committee debate over the tax overhaul bill. The committee later approved the bill on a party line vote 14-12.

Tax reform dominates as Congress takes a Thanksgiving break

Published: Sunday, November 19, 2017 @ 10:22 PM

Congressional Republicans left Capitol Hill late last week excited about the prospects for sweeping legislation which would deliver tax cuts and tax reform, as with approval of a House tax bill, the focus has shifted to the Senate, and whether GOP leaders can muster the needed votes to approve a slightly different GOP tax measure after Thanksgiving.

“This bill gives Americans more take home pay by cutting taxes and preserving deductions for home mortgage interest and charitable contributions,” said Sen. Bill Cassidy (R-LA) – while he’s on board, only a handful of GOP Senators are expected to determine the fate of this legislation.

Here’s where things stand on Capitol Hill:

1. Remember, there is more to do than tax reform. Yes, Republicans want to get tax reform done by the end of the year. But there are other measures which will need attention as well after the Thanksgiving break. For example, the Children’s Health Insurance program needs to be reauthorized, and has been in limbo since October 1. A temporary federal budget runs out on December 8, and there still hasn’t been a deal announced on how much Congress will decide to spend on the discretionary budget, which is what funds pretty much everything outside of mandatory spending items like Social Security and Medicare. There had been talk earlier this year of a possible government shutdown showdown, but that seems unlikely right now, because it would really get in the way of GOP efforts on tax reform. House Speaker Paul Ryan still wants all that spending work – a giant omnibus funding bill – done by the end of the year.

2. A rush of spending seems likely. In order to get a deal on the discretionary budget for 2018, it’s expected there will be a sizeable increase in defense spending in any final spending deal for next year – President Trump had asked for $54 billion in extra military funding, but there’s no sign of any budget cuts to immediately offset the cost of that. Not only is that extra money likely to be approved, but a third hurricane disaster relief bill seems likely to be voted on by Congress in December as well. The latest White House request was for $44 billion, much less than what Texas, Florida and Puerto Rico have asked for in terms of hurricane aid. That would make total aid close to $100 billion just this year. In the latest disaster aid plan, the White House for the first time is seeking offsetting budget cuts to pay for some of that extra spending. The plan unveiled last Friday has $14 billion in cuts now, and another $44 billion in cuts later – later, as in between 2025 and 2027, after President Trump is gone from the Oval Office.

3. Some Senators to watch on tax reform. When lawmakers return to legislative sessions the week of November 27, the main political game on Capitol Hill will be figuring out where everyone stands on the GOP tax reform bill in the Senate. This is a similar scenario to what went on with Republicans on health care reform, and many of the same players are involved. On the bubble right now would be Sen. Susan Collins (R-ME), Sen. John McCain (R-AZ), Sen. Bob Corker (R-TN), Sen. Lisa Murkowski (R-AK), and Sen. Jeff Flake (R-AZ). Also, Sen. Ron Johnson (R-WI) has said he wants major changes on how small businesses and pass through businesses are dealt with. Don’t count the bill out yet, but there is a lot of work to do. And one thing is for sure – someone will be watching them very closely.

4. Some items you probably won’t see in 2017. One item that won’t be acted on this year is an infrastructure bill. President Donald Trump has talked about his grand $1 trillion infrastructure program since the 2016 campaign, but at this point, there is still no detailed plan, and there is no bill in the Congress. On immigration, there’s still lots of talk about wheeling and dealing on DACA and border security, but I’m not sure there’s the political will to do that. Don’t look for funding for the border wall, but instead for something that sounds like border security, but isn’t the wall. With tax reform dominating the agenda, don’t look for anything on DACA until 2018.

5. One issue that has disappeared – the deficit. It used to be that Republicans were all about reigning in spending, and cutting the size of government. Now that they have had control of the House, Senate and White House, they are poised to, to, to, do nothing in 2017 on that front. The budget doesn’t balance for at least ten years (if not more), there were no major spending cuts enacted by the Congress, there was no appetite for savings in mandatory spending programs, either. The cuts included in the President’s budget have pretty much been ignored by lawmakers, and it took the White House three disaster aid bills before any offsetting budget cuts were proposed. Meanwhile, the yearly federal deficit is trending back up, and with the disaster relief bills, and an increase in the federal budget caps, there will be more red ink in 2018. Only a few Republicans have stuck with their familiar call for budget discipline.