The Hill is providing live coverage of the House Ways and Means Committee on Monday as it begins its consideration of GOP legislation to rewrite the tax code.
The Republicans’ bill would reduce the number of individual tax rates, slash the corporate tax rate and eliminate many tax breaks.
The markup is expected to continue for several days. Ways and Means Committee Chairman Kevin Brady (R-Texas) said he expects it to be finished by Thursday.
Democrats, who have largely opposed the tax bill, are expected to offer dozens of amendments during the markup.
Committee passes chairman’s amendment
8:06 p.m.
The Ways and Means Committee approved Chairman Kevin Brady’s amendment on a party-line vote of 24-16.
Republicans praised the amendment, saying it incorporated lawmakers’ feedback.
Democrats expressed concerns with the part of the amendment aimed at preventing improper payments of the earned income tax credit. They were also critical of the fact that the amendment was introduced with little notice and didn’t include a revenue estimate.
The amendment included provisions on university endowments, earned income tax credit and carried interest taxation, among other things.
The committee adjourned for the evening. The markup will resume at 10 a.m. on Tuesday.
Brady says health-care taxes won’t be in tax overhaul
5:45 p.m.
The newly introduced amendment doesn’t address any health-care taxes — such as the medical device and health insurance tax — which committee Chairman Kevin Brady (R-Texas) said won’t be included in the tax-reform effort, as members will work to repeal or delay them after tax reform wraps up.
“As the ranking member and members on the other side of the aisle know — we have been working with them over the past month to find a path forward,” Brady said, also including a tax on over-the-counter-medications on the legislative to-do list. “We are working on common-sense temporary and targeted relief from many of these taxes to be acted on in the House before the end of the year.”
This could be an area of bipartisanship, particularly when it comes to the medical device tax. Last month, 179 House members — including 43 Democrats — signed a letter to Speaker Paul Ryan (R-Wis.) urging full repeal of the medical device tax.
After a brief pause, the health insurance tax and the medical device tax are set to go back into effect in 2018 unless Congress acts. The medical device and insurance industries have been fighting to stop their implementation.
There was no mention of the individual mandate, which is unlikely to be included in the House version of the bill.
Brady releases revised tax overhaul language
5:40 p.m.
Chairman Brady released a revised version of his tax overhaul proposal in the 6th hour of the first day of debate Monday, eliciting howls from Democrats who called the process a disgrace.
Brady said the new language makes “improvements” related to a variety of issues, such as the exclusion from income for employer-provided dependent care, protects the integrity of the Earned Income Tax Credit and focuses the excise tax on net investment income of education institutions with endowments assets of at least $250,000 per student.
Other changes relate to income for songwriters and related to carried interest treatment of certain investment income.
Rep. Sandy Levin (D-Mich.), a former chairman of the committee, seemed particularly upset and said that the last-minute of introduction of a complex amendment without advance notice, questions or debate was out of order.
“You make a mockery out of this committee,” a riled Levin said. “What are you afraid of?”
“Are you authoritarians that you just throw this down at us?” he continued, saying that the process surrounding tax reform had been “just the worst kind of process.”
Rep. Richard Neal (D-Mass.), the ranking member, asked for a recess to consider the amendment.
“This procedure here is seismic in its ramifications,” he said.
Brady said that there was nothing unusual about offering amendments with multiple provisions.
Tiberi’s emotional farewell
4:35 p.m.
Members of the Ways and Means Committee took a few moments out of their partisan sniping to honor retiring Ohio Congressman Pat Tiberi (R), who gave an emotional farewell speech at the hearing.
“It’s here where we all, Democrats and Republicans, have the enormous responsibility to get things done for the people we serve,” he said. “It’s been an honor working with you. God bless you,” he said as his colleagues rose to their feet to applaud his 10 years of service on the committee.
Praising his colleagues across the aisle, he pointed to New Jersey Democrat Bill Pascrell, in particular, as someone who had become a close friend.
Committee Chairman Kevin Brady (R-Texas) praised Tiberi, who is expected to serve until January.
“Our committee is a better place and our Congress is a better place and the constituents of Ohio are better served because you sat here,” he said.
Pascrell: Personal stories to be cornerstone of opposition
4:30 p.m.
Nearly five hours into the hearing, Rep. Bill Pascrell (D-N.J.) made a promise to his colleagues on the other side of the aisle, foreshadowing the Democratic opposition to the GOP’s tax bill.
“You’re going to get a lot of anecdotal stories,” he said. “We’re going to give to you what we gave to you during the [ObamaCare repeal]. You can’t overcome those stories.”
This was a cornerstone of ObamaCare supporters’ tactics to help defeat the GOP health-care bill. Personal stories of Americans worried they’d lose their health insurance flooded into town halls, onto television screens and across social media.
At times, Monday’s hearing sounded reminiscent of the health-care debate, with Democrats decrying what they called a closed-door process that lacked public hearings.
During his allotted time, Pascrell told of one of his constituents named David a 50-year-old building trades union worker who was injured in a car crash in 2008 — detailing how the bill would mean David could no longer deduct $15,000 in medical expenses.
“He told me if this bill passes he’ll have to move out of his home in Fort Lee apart from his wife until she can retire,” Pascrell said. “Look, you’re tearing families apart. I’ve got a lot of these stories. You’re going to listen to them somehow, someway over the next four days.”
Democrat slams provision as attempt to block abortions
3 p.m.
Rep. Judy Chu (D-Calif.) slammed a provision in the tax bill related to expanding college savings accounts as “dangerous language” and “yet another Republican attempt to block a woman’s constitutional right to abortion but this time, in the guise of changing our tax code.”
At issue is language in the bill that is aimed at expanding tax-advantaged college saving plans, known as 529s, so “that an unborn child” could be a designated beneficiary.
A summary of the bill states “an unborn child means a child in utero. A child in utero means a member of the species homo sapiens, at any stage of development, who is carried in the womb.”
Chu questioned Thomas Barthold, the chief of staff for the Joint Committee on Taxation, asking him if, under current law, people can open up accounts in their own name and then transfer the account to their child once he or she is born. Barthold said yes.
Chu noted the only place the term “unborn child” appears in federal statute is in a 2004 law related to crime victims and in 2016 laws related to emergency medical procedures for pregnant women. But, “Does the term ‘unborn child’ appear anywhere in the tax code?” Chu asked.
Barthold responded, “not presently in the internal revenue code.”
After more back and forth, Chu pointed to two news reports and said: “I conclude from these articles that the assertion of this language has nothing to do with college savings accounts. Instead, this is an attempt by anti-abortion advocates to redefine personhood, but in the tax code.”
JCT Chief: Bill violates the ‘Mnuchin rule’
2:15 p.m.
Joint Committee on Taxation chief of staff Thomas Barthold said that the tax bill doesn’t adhere to the so-called Mnuchin rule that there be no net benefit for the wealthy.
“I would say not,” Barthold said in response to a question from Rep. Brian Higgins (D-N.Y.). “As has been pointed out it provides for net tax reductions, particularly in the first year, up and down the income distribution.”
Treasury Secretary Steven Mnuchin said in a CNBC interview in November 2016 that “there will be no absolute tax cut for the upper class.”
Higgins said that because the bill would cut taxes for high earners, “this tax plan is blatant fraud being perpetrated against Middle America.”
N.J. rep calls tax bill an ‘equal opportunity shafter’
1:55 p.m.
Rep. Bill Pascrell (D-N.J.) called the bill an “equal opportunity shafter,” saying it would hurt families in all states.
“I don’t care whether you live in Dakota, Jersey, this thing is really shafting everybody,” he said.
Pascrell said the bill wouldn’t actually double the standard deduction and he said that the repeal of personal exemptions would mean that some families would see a tax increase.
Pascrell also noted that the New Jersey Chamber of Commerce came out against the bill in its current form. New Jersey is a high-tax state and the bill would eliminate the deduction for state and local income and sales taxes and caps the property-tax deduction at $10,000.
“If this legislation is approved, people and businesses will have another reason to leave New Jersey, and people thinking of living here or moving their business here will have another reason to look for an alternative,” the group’s president, Tom Bracken, said in a statement Monday.
Larson rails against bill’s partisanship
1:20 p.m.
Rep. John Larson (D-Conn.) railed against his Republican colleagues for excluding Democrats from the process of writing the tax bill and subverting regular order.
Speaking passionately and angrily, Larson slammed Republicans for not holding hearings, not having administration officials testify and for writing the bill along purely partisan lines. That, he said, produced a bill that would burden the middle class.
“One hundred percent of the economy is impacted, and people in my state in the middle class are going to get a tax increase. A tax increase thanks to the myriad decisions you made behind closed doors,” he said.
The votes in the markup, he said, were going to fall along purely partisan lines as a result.
“It’s going to be 24-16 right down the line,” he said.
“These are honorable people, this is not an honorable time or day for democracy or America,” he added.
Rep. Peter Roskam (R-Ill.) shot back that Democrats behaved no differently when they passed the Affordable Care Act.
“The sanctimonious self-righteous retroactive nostalgia about process we can dismiss,” he said. “I don’t find it persuasive when people speak louder.”
Thompson spars with Brady over casualty losses deduction
1:10 p.m.
Rep. Mike Thompson (D-Calif.) got in a heated exchange with House Ways and Means Committee Chairman Kevin Brady over the bill’s repeal of the deduction for personal casualty losses.
The bill generally repeals the deduction but retains the benefit, as it was modified in a recent law, for those with losses from Hurricanes Harvey, Irma and Maria.
Thompson, who said he had thousands of constituents who have suffered as a result of wildfires in California, accused Brady of “pulling the rug out from underneath them.”
“This is the wrong message to send to people who have just had their entire life turned upside down,” he said.
Brady said he expects there to be another disaster tax-relief bill in the near future and he will work to ensure that victims of the California fires will be able to write off their losses.
Rep. Levin: 38 million people will see taxes go up in five years
12:55 p.m.
Rep. Sandy Levin (D-Mich.) grilled Thomas Barthold, the Joint Committee on Taxation’s chief of staff, on how the tax plan would affect low-income people a few years out.
In 2023, he noted, people making between $20,000 and $40,000 a year would actually see their taxes go up. (See the first table on page 6 of the joint committee’s distributional analysis.)
Barthold said there would be 38 million people in those income ranges, who would, on average, see their taxes rise.
One reason that taxes for some could go up halfway into the decade is because certain credits in the bill are set to expire. Republicans put the expirations in to make the tax bill’s math add up.
Budget hawks say they are gimmicks because they expect that any future Congress would feel intense political pressure to renew the credits. Extending the credits would lead to higher deficits, but lower the taxes in question, even though they’re not part of the plan on the table.
Levin said that House Speaker Paul Ryan’s (R-Wis.) promises that the plan would help the middle class deserved “Four Pinocchios.”
Committee Chairman Kevin Brady countered that the middle class would see more in tax relief in 2019 than the wealthiest.
Democrats seize on Paradise Papers as tax issue
12:40 p.m.
Members of the Democratic Caucus have seized on the explosive “Paradise Papers” leak, which detailed how big businesses and major global figures hide their wealth in tax havens, as an issue to be considered in the tax reform.
At the markup, Rep. Lloyd Doggett (D-Texas) raised the issue and called for the markup to be postponed.
“Consideration of the Republican tax plan to reward tax dodgers and incentivize outsourcing of more American jobs abroad should be postponed until a thorough examination of these documents has occurred,” Doggett said in an earlier statement.
In the Senate, Minority Leader Charles Schumer (D-N.Y.) and Finance Committee Ranking Member Ron Wyden (D-Ore.) also attempted to link the leak to the reform effort.
“The revelations in the Paradise papers are proof positive that the Republican tax plan favors the wealthy and betrays the middle class in this country, who are the ones left carrying the financial burden of massive corporate tax avoidance,” they said.
Sen. Bernie Sanders (I-Vt.) tweeted that Congress should investigate the papers before considering the tax bill.
The “Paradise Papers” showed that Commerce Secretary Wilbur Ross maintained a stake in a shipping company linked to the family of Russian President Vladimir Putin.
Ross has denied that the stake implicated him in any wrongdoing.
Committee rejects Doggett amendment to delay consideration
12:31 p.m.
The Ways and Means Committee rejected a motion from Rep. Lloyd Doggett (D-Texas) to delay consideration of the bill for one week.
In arguing for the delay, Doggett noted that the bill hasn’t gotten a hearing.
“Our objective is insight, not delay,” he said.
He also noted that the public still hasn’t seen President Trump’s tax returns and that the new leak of the “Paradise Papers” raises new questions about the president’s allies who could stand to benefit from the bill.
The panel defeated the motion on a party-line vote of 24-16.
Neal: Tax plan is an economic gamble
12:26 p.m.
Rep. Richard Neal (Mass.), the top Democrat on the Ways and Means Committee, said in his opening statement that the Republican tax plan rested on a gamble that its rosy economic assumptions would come true.
Previous Republican tax cuts in 2001 and 2003, he argued, did not lead to significant boosts in jobs and growth, and ballooned the deficit.
“They took us to a casino each time without a win,” he said.
Neal agreed that the tax code needed an overhaul, but said that Democrats should have been brought in on the process. The Reagan tax cuts, he noted, took years to put together, included bipartisan negotiations and featured dozens of public hearings on the issue.
“We cannot afford to only care about deficits when there’s a Democratic president,” Neal said.
Chairman Brady’s opening statement
12 p.m.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) is opening the markup by touting the historic nature of the tax overhaul bill.
“This is our moment to make transformational tax reform a reality for the American people,” he said in his remarks as prepared for delivery. “Let’s seize it in the bold way they deserve.”
Brady said the committee has spent a “substantial amount of time” on tax reform in recent years.
He said the bill is designed to boost jobs and the economy and help the middle class.
“It’s about making America’s economy stronger than ever by delivering more jobs, fairer taxes and bigger paychecks across the nation,” he said.
Brady added that he plans to work with lawmakers in the future to provide additional ways to help families and the economy.
“I also know members had priorities that were not ultimately included in this legislation,” he said. “I can assure you this is not the last tax markup our committee will ever hold.”
– Rachel Roubein and Kim Dixon contributed