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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.

 

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After Trump visit, Republicans try to rally behind immigration bill

Published: Tuesday, June 19, 2018 @ 11:07 PM

President Donald Trump tried on Tuesday evening to push Republicans in the House to pass an immigration reform bill later this week, basically telling GOP lawmakers he would support whatever they could pass, as Republicans struggled to find the votes to do that, and pressed the White House to back off a new policy that separates some illegal immigrant kids from their parents after being picked up at the border.

“The system’s been broken for many years,” the President told reporters at the Capitol before the unusual Tuesday evening gathering.

“The immigration system, it’s been a really bad, bad. system, probably the worst anywhere in the world. And we’re gonna try and see if we can fix it.”

Earlier in the day, the President had told a gathering of business leaders that he would not back off his calls for major changes in U.S. immigration laws.

“When people come up, they have to know they’re never going to get in, or else it’s never going to stop,” Mr. Trump said of the flow of illegal immigration across the southern border with Mexico.

But complicating matters for the President was the recent move to force the separation of children and parents, if the parents were being charged for illegally entering the United States, as that continued to draw stern opposition from GOP lawmakers of all stripes.

“All of us are horrified at the images that we are seeing,” said Sen. Ted Cruz (R-TX).

“We ought to stop separating families,” said Rep. Kevin Yoder (R-KS). “The Administration disagrees,” as GOP lawmakers said the conflict wasn’t really discussed during the Tuesday night meeting with Mr. Trump.

“We can have strong border security without separating families,” said Sen. Rob Portman (R-OH).

13 GOP Senators signed a letter to Attorney General Jeff Sessions, asking the Trump Administration to “halt current policies leading to the forced separation of minor children from their parents,” but that missive fell on deaf ears at the White House, as GOP lawmakers scrambled for kind of legislative answer.

House GOP leaders on Tuesday night posted two different immigration bills for possible House votes – one was a more conservative plan backed by Rep. Bob Goodlatte (R-VA), which was unlikely to get close to a majority; a second was a more moderate bill that lacked the support of conservatives.

It left many unsure what would happen if votes occurred this week on the House floor.

“I’m still working through whether I can vote for the compromise bill,” said Rep. Warren Davidson (R-OH), as more conservative lawmakers withheld their support from the only all-GOP plan that has a chance for approval.

Meanwhile, even as Mr. Trump tried to push Republicans to stick together on immigration, he managed to cause some internal GOP pain, as lawmakers said the President – during the closed door meeting with House lawmakers – took a verbal shot at Rep. Mark Sanford (R-SC), who lost his primary a week ago to a candidate backed by the President.

“Is Mark Sanford here? I just want to congratulate him on running a great race,” the President reportedly said, drawing quiet groans and hisses from some GOP members.

One Republican, Rep. Justin Amash (R-MI) said later on Twitter, that the jab was uncalled for.

“This was a classless cheap shot,” Amash wrote.

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Ohio lawmakers criticize separating kids from parents at border

Published: Tuesday, June 19, 2018 @ 12:57 PM
Updated: Tuesday, June 19, 2018 @ 12:57 PM

What You Need to Know: 'Zero Tolerance' Immigration Policy

Ohio Senators Rob Portman and Sherrod Brown criticized President Donald Trump’s administration for separating children from parents trying to cross the border in the United States.

President Trump defended the policy Tuesday blaming Democrats, child smugglers and said Congress needs to take action.

In a statement Tuesday, Portman, R-Ohio, said “the policy is counter to our values. We can have strong border security without separating families at the border. They can be kept together and dealt with as a family unit.”

“The administration should change course immediately and use its executive authority to keep families together and expedite their cases,” Portman said. “If those changes aren’t made, Congress should act quickly on a legislative solution to fix this problem.”

RELATED: Hundreds of children wait in border patrol facility in Texas

Brown, D-Ohio, who is seeking re-election against Republican Jim Renacci, said “all children should be treated with compassion. Tearing families apart is wrong and will not fix our broken immigration system.”

U.S. Rep. Mike Turner, R-Dayton, went on CNN Tuesday and said he’s “opposed to the practice” of separating children from their parents.

“If the president has the ability, certainly the president should end the practice,” he said.

Turner and other House Republicans met with President Trump on the issue Tuesday night.

Turner says Speaker Paul Ryan is backing a bill that would move from a lottery to a merit-based immigration system, end the separations and deal with border security. He said he hopes President Trump will support the speaker’s bill.

“Immigration is the strength and the heart of our country,” Turner said. “We have a system that is absolutely broken.”

RELATED: Before Trump policy, immigrant families arrested at border were detained together

The House is expected to consider two competing immigration bills this week which could include language preventing the border separations. But there are deep doubts either bill can pass the House or Senate in part because Republicans are so divided on the issue and Democrats believe neither bill solves the problem.

U.S. Senate candidate Renacci, a House member from Wadsworth, said “protecting both American jobs and our security by securing our borders and fixing our broken immigration system must be a top priority,” and urged swift passage of a bill to “enforce America’s immigration laws” and prevent “the separation of children from their parents on our border.”

President Trump wants Congress to act

President Trump called for Congress to approve what he called a third option to address the family separations.

“So what I’m asking Congress to do is to give us a third option, which we have been requesting since last year, the legal authority to detain and promptly remove families together as a unit,” Trump said. “We have to be able to do this. This is the only solution to the border crisis.”

Under the current policy, all unlawful crossings are referred for prosecution — a process that moves adults to the custody of the U.S. Marshals Service and sends many children to facilities run by the Department of Health and Human Services. Under the Obama administration, such families were usually referred for civil deportation proceedings, not requiring separation.

What You Need to Know: 'Zero Tolerance' Immigration Policy

More than 2,300 minors were separated from their children at the border from May 5 through June 9, according to the Department of Homeland Security.

Top conservatives, including key Trump allies, have introduced bills to keep the migrant families together. Sen. Ted Cruz of Texas introduced legislation that the White House said it was reviewing, and Rep. Mark Meadows of North Carolina, a leader of the conservative Freedom Caucus, also introduced a measure.

“While cases are pending, families should stay together,” tweeted Cruz, who is in an unexpectedly tough re-election battle. He introduced his own bill to speed up court proceedings to no more than 14 days. “Children belong with their families,” he said.

Both bills seemed to be longshots. “This becomes a backup proposal,” Meadows told reporters at the White House.

The Trump administration insists the family separations are required under the law. But after signaling Monday that it would oppose any fix aimed solely at addressing that issue, the White House said Tuesday it was reviewing the emergency legislation being introduced by Cruz to keep migrant families together.

The senator’s bill would add more federal immigration judges, authorize new temporary shelters to house migrant families, speed the processing of asylum cases and require that families that cross the border illegally be kept together, absent criminal conduct or threats to the welfare of any children.

The two immigration bills under consideration in the House could address the separations, but the outlook for passage is dim. Conservatives say the compromise legislation that GOP leaders helped negotiate with moderates is inadequate.

Rep. Jim Jordan, R-Urbana, a member of the Freedom Caucus, said he’s skeptical that even a full-throated endorsement from Trump will be enough to get the compromise bill through the House.

The Associated Press contributed to this report.

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Trump to meet House GOP amid furor over immigrant families

Published: Tuesday, June 19, 2018 @ 4:15 AM

As President Donald Trump lashed out at Democrats on Monday, demanding again that Congress act to tighten federal immigration laws, more Republicans in the Congress began to distance themselves from a recent Trump Administration policy change, which has resulted in the separation of some 2,200 illegal immigrant families detained by border authorities.

“As the son of a social worker, I know the human trauma that comes with children being separated from their parents,” said Rep. Kevin Yoder (R-KS), as he asked Attorney General Jeff Sessions to “take immediate action to end the practice of separating children from families at the border.”

“We as compassionate Americans absolutely detest watching families being pulled apart,” said Sen. James Lankford (R-OK), who in a speech on the Senate floor said on one hand the President is correct to call for action in Congress on immigration – but that the Trump Administration has been wrong to separate so many families in the last six weeks, labeling the situation “a mess.”

At the White House, the President didn’t shy away from the controversy, again blaming Congress for not acting, and making it clear he wants to stop a recent surge in illegal immigration across the southern border.

“The United States will not be a migrant camp and it will not be a refugee holding facility,” the President said. “Not on my watch.”

The President will take that sharp message on Tuesday evening to a meeting of House Republicans at the Capitol, trying to rally them to get behind a piece of immigration legislation, which could solve a series of issues.

GOP leaders though have been trying for months to figure out a deal, but have found the party too splintered over what to do on DACA, younger illegal immigrant “Dreamers,” and ways to tighten what Mr. Trump says are odious loopholes in immigration law.

“A county without borders is not a country at all,’ the President declared, as he said that illegal immigrants are bringing “death and destruction” to America.

“They are thieves and murderers and so much else,” Mr. Trump added.

But Mr. Trump’s criticism of Democrats and Congress has drawn more opposition in recent days from within his own party, who feel the White House is wrongly trying to use the plight of immigrant children to force through immigration law changes.

“President Trump has chosen to implement this policy and he can put an end to it,” said Rep. Ileana Ros-Lehtinen (R-FL), “but he chooses not to do so and instead blames others.”

“The administration has the power to rescind this policy. It should do so now,” said Sen. John McCain (R-AZ) via Twitter.

While Mr. Trump has repeatedly blamed Democrats for the separation of families, it was the Trump Administration that decided to take this step in early May, by prosecuting adults for illegally entering the country.

That move to enforce the law triggers a situation in which children are removed from their parents, leading to the uproar of recent days.

“This is the Trump administration’s policy,” said Sen. Dianne Feinstein (D-CA). “President Trump could put an end to this immoral policy right now.”

Republicans have floated various ideas in recent days – it wasn’t clear if any could make it through the House, as immigration has vexed GOP lawmakers for years, as this latest battle has turned up the heat even more.

“It’s not good policy to separate children at our border from their parents & release them into the US,” said Rep. Lee Zeldin (R-NY). “It’s also not good policy to just immediately release an entire family together into the US when that family enters our country illegally.”

 

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Senate OKs $116 million for massive NASIC project at Wright-Patterson

Published: Monday, June 18, 2018 @ 6:36 PM
Updated: Monday, June 18, 2018 @ 6:36 PM

‘60 Minutes’ previews story about NASIC and Wright-Patt

The Senate late Monday passed a $716 billion defense bill that included $116 million expansion of the National Air and Space Intelligence Center - one of the largest projects in Wright-Patterson’s recent history.

By a vote of 85-10, the Senate passed its version of the defense bill, which authorizes defense programs for the 2019 federal spending year that begins in October. Both Sens. Sherrod Brown, D-Ohio, and Rob Portman, R-Ohio, voted in support of the bill.

The House version of the defense bill, which passed last month, authorized $182 million for the full NASIC project, but it would be paid out or appropriated over a number of years starting with $61 million in the first year.

RELATED: Some of U.S.’s most secretive work will be done in new NASIC building

The differences between the two versions will have to be worked out in a conference committee before a final appropriations bill is passed.

U.S. Rep. Mike Turner, R-Dayton, whose district includes Wright-Patterson, had pushed for authorization of the entire construction cost.

The Air Force had asked for $116 million in its initial budget request and was expected to ask for the remainder in future years, according to a spokeswoman for Portman. Portman’s office had initially indicated the senator would pursue additional funding, but the Air Force had requested the additional amounts in 2020-2023, a spokeswoman said.

The expansion is expected to relieve overcrowding at the secretive intelligence center, where some employees share desks and work in shifts. NASIC has added about 100 people a year between 2000 and 2015, spokeswoman Michelle Martz said.

Loren B. Thompson, a Virginia-based senior defense analyst with the Lexington Institute and a defense industry consultant, said with the return of great power competition with Russia and China, NASIC’s intelligence analysis will be in growing and greater demand and bring “total job security.”

“Making China and Russia the focus of our military strategy increases the importance of what NASIC does. After all, terrorists and insurgents like the Taliban don’t have air forces or space programs, whereas China and Russia do,” he said in an email.

He added that NASIC “is central to understanding the state of aerospace technology from missile defenses to stealthy aircraft in the countries that will likely remain America’s key competitors through mid-century.

“China and Russia are the only two countries in the world that have the ability to destroy the U.S. economy, and perhaps our democracy, with their nuclear arsenals,” he said. “So working at NASIC in the years ahead is likely to offer the closest thing to total job security that you can find in modern-day America.”

Saves jobs at Research Lab

Separately, the defense bill also blocked the transfer of a manufacturing technology office with 55 jobs from the Air Force Research Laboratory at Wright-Patterson to the Pentagon.

The Pentagon had planned to move the office, which had been at Wright-Patterson since 1987, last Oct. 1, archives show. But Brown sponsored a provision in the National Defense Authorization Act to keep the jobs at Wright-Patt.

RELATED: Stealth bombers, UFO rumors among base’s first 100 years

Brown and three of his congressional colleagues had sent a letter last August to Secretary of Defense James Mattis warning the move could lead to “disorganized and haphazard development” of future programs and put at risk dozens of active projects.

Brown praised the inclusion of the provision in the defense bill Monday.

“The workers at the Lab have the deep institutional knowledge and experience we need to continue making these defense manufacturing investments, and to oversee the program to ensure current projects are successful and cost-effective,” he said.

Charlie Ward, chief of the AFRL manufacturing and technologies division, said in a statement there were no plans to move the manufacturing and industrial technologies division to Washington.

CONTINUING COVERAGE

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