This week: GOP seeks to finish tax overhaul

Republicans are trying to make headway this week on finalizing a tax overhaul as their self-imposed end-of-the-year deadline comes ever closer.

Members of the conference committee will be hashing out differences between the bills passed by the House and Senate.

A final vote in each chamber likely won’t be until next week at the earliest, setting up what will likely be a climactic few days as lawmakers also try to avoid a government shutdown before leaving Washington for the holidays.

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House Majority Leader Kevin McCarthy (R-Calif.) told lawmakers before the chamber adjourned on Thursday that the final tax-reform bill won’t come up for a vote this week.

“But if it could, I would bring it up as soon as we come out of conference because I do believe the American people are waiting for the Tax Cuts and Jobs Act to continue what we have gone through,” McCarthy said.

The House-Senate conference committee will hold its first public meeting Wednesday afternoon.

“Our open meeting will be an opportunity for the conferees to discuss our best, most pro-growth tax reform ideas that will help improve the lives of all Americans,” House Ways and Means Committee Chairman Kevin Brady (R-Texas) said in a statement.

The two bills have a variety of differences, including individual tax rates, repeal of the estate tax and effective date for the corporate tax cut.

Republicans are also wrestling with whether to keep the proposed corporate tax rate at 20 percent or raise it slightly to pay for other priorities.

The Senate version additionally includes a repeal of the health-care law’s individual mandate requiring people to buy insurance or pay a penalty, and it paves the way for drilling in part of the Arctic National Wildlife Refuge.

In the House, most of the Republicans from high-tax blue states who voted against the original version last month had concerns about the impact of repealing the state and local tax deduction. The House bill would allow local property tax deductions up to $10,000.

Republicans are moving at a breakneck pace to finish their tax overhaul by the end of the year. If the conference committee wraps up by next week, that would mean Republicans will have gone from start to finish in less than two months on legislation with major impacts on the U.S. economy.

GOP senators are sending warning shots that they want their priorities kept in the final version.

Sen. Marco Rubio (R-Fla.) warned that there would be “problems” if they bump up the corporate tax rate above 20 percent but don’t further expand the child tax credit.

The Senate approved a nonbinding “motion to instruct” from Rubio directing conferees to keep the child tax credit at least at $2,000, compared to the House’s $1,600 credit.

GOP Sen. Susan Collins (Maine), who supported the Senate bill, has also said she will be undecided on the final version until she sees what comes out of the conference committee.

But after 11 months of across-the-board control of Washington and no major legislative accomplishments to show for it, Republicans are eager to get something done by year’s end.

 

Spending deal

Amid the GOP’s push to finish tax reform, lawmakers have less than two weeks to reach a deal to avoid a government shutdown after Dec. 22.

The next spending bill is expected to be another short-term patch like the bill approved by Congress last week, but with a budget deal to establish spending caps for 2018. Lawmakers would then consider a full appropriations package early next year.

Republicans want to boost defense spending, while Democrats want parity for nondefense programs.

As lawmakers sought last week to avoid a shutdown after funding was set to expire on Dec. 8, members of the House Freedom Caucus unsuccessfully pushed to change the end date to Dec. 30 instead of Dec. 22.

They instead agreed to support the two-week patch last week with a commitment from GOP leaders to push for increased defense spending through fiscal 2018.

Democrats are trying to maximize the leverage they hold in the negotiations, given that House Republicans have often struggled to pass spending bills on their own and Republicans need them to get over a procedural hurdle in the Senate.

House Republicans did manage to supply enough votes to pass the two-week stopgap, but Democrats will be needed to pass any spending bill in the Senate regardless of Republican support.

Democrats are pushing to include a fix for young immigrants brought to the U.S. as children who were granted temporary work permits through the Obama-era Deferred Action for Childhood Arrivals (DACA) program, which the Trump administration is rescinding.

Senate Minority Leader Charles Schumer (D-N.Y.), House Minority Leader Nancy Pelosi (D-Calif.), as well as GOP leadership, met at the White House with Trump late last week to discuss the budget and year-end government funding bill.

Schumer and Pelosi said after the meeting that they had a “productive conversation” but nothing specific was agreed to. 

“Democrats continue to press for action on the urgent, bipartisan priorities before Congress: to strengthen our national defense with parity for our domestic budget; to fund veterans and the fight against opioids; to address [the Children’s Health Insurance Program] and Community Health Centers; to save Americans’ endangered pensions; and to pass the DREAM Act.”

DACA recipients will face deportation if Congress doesn’t act by March. But Republicans are adamant that the DACA issue must be dealt with separately sometime in 2018.

“I think the pushback would be far too costly,” House Freedom Caucus Chairman Mark Meadows (R-N.C.) said of including a DACA fix in this month’s spending bill.

Senate Republicans agreed during a meeting with Trump earlier this year that they would not include a DACA fix in the spending bill.

Sen. James Lankford (R-Okla.), who took part in the meeting and has filed legislation that would offer a pathway to citizenship, said there wasn’t enough time for lawmakers to get an agreement this year.

“There’s too many outstanding issues. … There’s not enough time to build the coalitions to get a result by the end of the year,” he said.

 

Alabama Senate race

Senate Republicans will find out on Tuesday whether a man accused of pursuing relationships with teenage girls will be joining their ranks.

Senate Majority Leader Mitch McConnell (R-Ky.), who opposed Roy Moore’s candidacy starting in the GOP primary, has indicated that an ethics investigation is likely if he wins the special election.

“If he were to be elected, I think he would immediately have an issue with the Ethics Committee, which they would take up,” he told reporters last week.

Some polls have shown Moore ahead of Democrat Doug Jones, a prosecutor, but the results could be close in the deeply Republican state.

Senate Republicans distanced themselves from Moore once the allegations surfaced and urged him to withdraw from the race, but Trump went on to endorse him. Trump’s support may save Moore despite the severity of the allegations.

On the other hand, if Jones wins, Senate Republicans would have an even smaller 51-seat majority to work with.

Beyond Moore, lawmakers on both sides of the Capitol are reeling from the mounting number of colleagues accused of sexual harassment.

Three lawmakers have resigned in the past week alone amid the sexual harassment fallout: Reps. John Conyers Jr. (D-Mich.) and Trent Franks (R-Ariz.), as well as Sen. Al Franken (D-Minn.).

House Democratic leaders have also called for Rep. Ruben Kihuen (D-Nev.) to resign after a former campaign staffer accused him of sexual harassment. Kihuen denies the allegations and has so far resisted pressure to step down.

Still more allegations against lawmakers could be made public in the coming days.

 

Nominations

The Senate is pushing forward with confirming three appeals court nominations on the floor this week, as members negotiate over spending and taxes behind closed doors.

Senators will take a procedural vote on Steven Grasz’s nomination to be a judge for the Court of Appeals for the 8th Circuit.

Grasz, who previously served as the chief deputy attorney general for Nebraska, was Trump’s second judicial nominee to receive a rating of “not qualified” from the American Bar Association.

The Senate will also take up Don Willett and James Ho’s nominations to be on the Court of Appeals for the 5th Circuit.