Live coverage: Day three of the Ways and Means GOP tax bill markup

Day three of the House Ways and Means markup of the Republican tax bill kicks off early on Wednesday and is expected to go late into the night.

Republicans want to approve the legislation in the committee on Thursday, at which point the Senate will release their own version of the bill.

The day will be dominated with Democratic amendments designed to politically embarrass Republicans or undermine their proposal.

A wave of new reports from Wednesday showing that some middle-class earners would see their taxes go up, especially by the end of the decade, are sure to be central in the back-and-forth between Democrats and Republicans.

Day three of the markup concludes

6:50 p.m.

House Ways and Means Committee Kevin Brady (R-Texas) said he plans to offer an amendment to the bill on Thursday.

The amendment will be designed to ensure that the bill doesn’t add more than $1.5 trillion to the deficit. The bill can’t increase the deficit by more than that amount under the budget resolution that allows tax legislation to be passed on a party-line vote in the Senate.

The markup wrapped up for the day on Wednesday around 6:40 p.m., though Democrats had expected to work well into the night on their amendments.

Brady said that the markup would resume at 9 a.m. on Thursday to consider more Democratic amendments as well as his “manager’s amendment.”

Democrats expressed concerns that Brady’s amendment would be offered with little time to look it over.

“You can’t do tax policy with one party in four days,” said Rep. Richard Neal (D-Mass.), the panel’s top Democrat.

Brady said that to the extent he can release the amendment sooner rather than later, he will. He also argued that Democrats offered a last-minute amendment to the Affordable Care Act (ObamaCare) when that was being considered by the panel, though Democrats pushed back on that claim.

Rep. Lloyd Doggett (D-Texas) asked if Brady’s amendment would include a repeal of ObamaCare’s individual mandate, which President Trump has been pushing for. Brady did not directly answer the question.

 

Several more Democratic amendments defeated

6:34 p.m.

The Ways and Means Committee rejected several more Democratic amendments along party lines.

These included amendments to restore the alternative minimum tax, end the carried interest tax break and expand the earned income tax credit and child tax credit to residents of Puerto Rico.

 

Top Committee Dem predicts Republicans are making substantial changes to the bill

6:05 p.m.

Ways and Means Committee ranking member Richard Neal (D-Mass.) said it appears that Republicans are preparing a “substantial change” to their tax bill.

“I think part of it was the elections last night, part of it is the skittishness that has arisen because of the fact that the Senate is unlikely to embrace many of the proposals that have been here,” he told reporters.

Democrats on Wednesday afternoon scaled back the number of amendments they plan to offer and reduced the amount of time they spent discussing the amendments.

But Republicans also look to be preparing an amendment of their own, ending Wednesday’s session of the markup early in the evening rather than late at night and taking a recess in the middle of the afternoon.

Neal noted that Committee Chairman Kevin Brady (R-Texas) has spent much of Wednesday outside of the room where the markup is being held.

Democrats offered a number of amendments throughout the debate to restore tax preferences that are eliminated in the bill. The Republicans defeated the amendments on party-line votes.

But Neal predicted that some of the tax breaks Democrats want restored — such as the medical expense deduction and tax-exempt private activity bonds — ultimately would be.

“I can’t imagine that we’re not going to end up with a deduction for medical expenses for the disabled and the elderly,” he said. 

These are all the pro-middle class amendments Democrats were prepared to offer before Chairman Brady cut off debate. Do Republicans have something more important to do tonight? pic.twitter.com/8RSjWdsOUS

— Ways and Means Dems (@WaysMeansCmte) November 8, 2017

 

Committee recesses for House votes

4:30 p.m.

The House Ways and Means Committee is taking a recess for House votes.

Once House votes are complete, the markup will resume.

Amendment proposed to close the carried interest loophole

4:20 p.m.

Rep. Sandy Levin (D-Mich.) introduced an amendment, identical to a bill approved in 2015 but never signed into law, that would eliminate the carried interest loophole.

“It symbolizes the failure to understand that those who provide services, often about big big money, should not be in a different position than others who provide services, maybe a waitress,” he said.

Politicians, including President Trump, have railed against the carried interest loophole, which allows some hedge fund managers to take a much lower tax rate on a portion of their income received as compensation.

On Monday, the committee approved an amendment from Chairman Kevin Brady (R-Texas) to reduce the eligibility of funds eligible for the lower tax rate.

Rep. George Holding (R-N.C.) said it was unjust to characterize carried interest as a loophole for avoiding taxation. 

“The goal of tax reform is economic growth, and there’s nothing more important to entrepreneurism than economic growth,” he said. “Carried interest rewards entrepreneurism.”

Doggett offers amendment to restore alternative minimum tax

4:05 p.m.

Rep. Lloyd Doggett (D-Texas) offered an amendment to restore the alternative minimum tax in the bill.

Doggett said that repealing the alternative minimum tax “would be a gift directly to President Trump.”

A leaked copy of Trump’s 2005 tax returns showed that most of the income tax he paid for that year was because of the alternative minimum tax.

Republicans defended their plans to repeal the tax.

Rep. Erik Paulsen (R-Minn.) said that repealing the tax “should be a priority for this committee.”

Americans no matter what they earn “should not have to figure out their taxes twice,” he said.

Committee reconvenes, returns to amendments

3:20 p.m.

The Ways and Means Committee reconvened after a recess to hash out its remaining agenda, though Chairman Kevin Brady (R-Texas) remained out of the room.

Rep. Bill Pascrell (D-N.J.) introduced a new amendment that would give Puerto Ricans access to the Earned Income Tax Credit and Child Tax Credit, an effort to provide relief for the hurricane-stricken island.

“It would bring needed economic relief from families struggling to recover from Hurricane Maria,” Pascrell said, adding the Puerto Ricans pay taxes, but don’t receive the same benefits.

Rep. Diane Black (R-Tenn.) said it would be better to work for a targeted effort for disaster relief.

“I would be happy to work with you on a comprehensive plan,” Black said.

When Pascrell said he doubted she read the bill, Black countered that she only just received it and would be glad to recess. Pascrell said he wished the same courtesy would be extended to Democrats when Republican amendments were presented, resurfacing a debate from Monday.

What happened during the recess?

3:15 p.m.

Rep. Vern Buchanan (R-Fla.) said that Ways and Means Committee Republicans had a “family discussion” during the markup’s hour-long recess.

They were discussing their options about how to ensure that the bill only costs $1.5 trillion over a decade, as is required by the budget resolution that allows tax legislation to pass the Senate on a party-line vote.

Meanwhile, Democratic lawmakers on the committee held a press conference with AARP representatives on preserving the medical expense deduction.

Rep. Judy Chu (D-Calif.) said that “we do not know when we have extraordinary medical expenses” but that the deduction is important when they arise.

Former chairman visits markup

A familiar face showed up to the Ways and Means Committee’s markup: Former Chairman Dave Camp (R-Mich.).

Camp was the panel’s chairman from 2011-2014 and offered his own tax-reform bill during that time. He now works at PricewaterhouseCoopers.

While Camp’s tax bill got little traction at the time, some of its ideas were incorporated into the bill House Republicans are considering now.

Also in the audience is a group from the AARP, which is fighting to preserve the medical expense deduction.

Dems ask for ‘plenty of time’ to review future amendments

2:20 p.m.

The markup is taking a recess until 2:45 p.m.

Before it recessed, Ways and Means Committee Chairman Kevin Brady (R-Texas) and Democratic lawmakers had a discussion about the markup schedule going forward.

Brady said that the plan is to consider more amendments until the next round of House votes and to vote on those amendments afterward. He said it would be up to Democrats how late the markup goes in the evening.

“I want to make sure that we are providing plenty of time for Democrat amendments,” he said.

The chairman also said he plans for the markup to finish on Thursday and that there could be amendments from Brady or other Republicans.

Democrats on the committee asked about how much time they would have to digest any amendment from Brady.

Brady said that the committee would “proceed with regular order” and would have time to debate the amendment.

Democratic amendments rejected on party lines

2:10 p.m.

The House Ways and Means Committee rejected this morning’s amendments offered by Democrats on party-line votes.

Amendments defeated include those to: restore the medical expense deduction, keep the Johnson Amendment, restore the student-loan deduction, expand the earned income tax credit, restore private activity bonds, restore advance refunding bonds and reinstate a tax credit for first-time homebuyers. 

 

Recess for House votes

1:15 p.m

Lawmakers are taking a recess from the markup in order to vote on the House floor.

Following House floor votes, the markup is expected to resume with votes on the amendments Democrats offered in the morning.

Crowley offers housing amendment

12:45 p.m.

Rep. Joseph Crowley (D-N.Y.) offered an amendment aimed at making it more affordable for people to buy and rent homes.

The amendment would reinstate a tax credit for first-time homebuyers and provide a refundable credit for people whose rent exceeds 30 percent of their gross income.

Crowley said that the cost of housing is growing at an unsustainable rate, and “Congress can and must address this harmful trend.”

Rep. Tom Rice (R-S.C.) spoke out against the amendment, arguing that it basically creates a new entitlement and that the American people would prefer more money in their pockets.

The tax bill helps to stimulate the economy, and that will “give people the ability to lift themselves up,” Rice said.

Sewell offers amendment to restore advance refunding bonds

12:40 p.m.

Rep. Terri Sewell (D-Ala.) introduce an amendment that would restore advance refunding bonds, which she said were an important tool for funding infrastructure.

“The current exemption allows state and local government to refinance or buy back outstanding bonds to lower their interest rates,” Sewell said.

“Eliminating the provision is short-sighted and imprudent,” she said.

No Republicans spoke up against the amendment, which will receive a roll call vote later on.

Pascrell gets heated over disaster relief amendment

12:15 p.m.

Rep. Bill Pascrell (D-N.J.) offered an amendment relating to disaster relief and got heated when Rep. Devin Nunes (R-Calif.) asked that the amendment be ruled as nongermane.

The 102-page amendment included retroactive tax relief for victims of disasters occurring from 2012 to 2015, and also included relief for victims of natural disasters from 2016 and forward.

“Hurricanes don’t discriminate. They don’t care if you’re a Republican or a Democrat,” Pascrell said.

Rep. Devin Nunes (R-Calif.) asked that the amendment be ruled nongermane because it amended the Social Security Act.

In response, Pascrell erupted.

“If this isn’t germane, nothing’s germane,” he said. “You ought to go home right now, hit the gavel, goodbye, and pass whatever you want to pass.”

Ways and Means Committee Chairman Kevin Brady (R-Texas) ruled that the amendment was not germane. A motion to table an appeal of Brady’s ruling was approved along party lines.

Neal to Tiberi: ‘If you vote with us on this, I will not tell Chairman Brady’

11:40 a.m.

Rep. Suzan DelBene (D-Wash.) offered an amendment to improve affordable housing.

“The Republican tax-reform plan would worsen the state of affordable housing by eliminating tax-exempt private activity bonds and missing this opportunity to expand the low-income housing tax credit,” she said.

Private activity bonds allow private companies and nonprofits to benefit from tax-exempt debt for projects allowed by a municipality, which can help build out private infrastructure.

DelBene’s amendment would restore tax-exempt private-activity bonds and expand state allocations for the low-income housing tax credit.

Rep. Pat Tiberi (R-Ohio), praised the experience of his Democratic colleagues on the committee and said he shared the disappointment that the low-income housing tax credit was not expanded in the bill.

He also said that private activity bonds could be used for golf courses, which was misplaced.

“This is something the Congress has to work on,” he said, but noted that the overall reform was a tough balancing act and praised committee Chairman Kevin Brady (R-Texas) for holding it all together.

“If you vote with us on this, I will not tell Chairman Brady,” ranking member Richard Neal (D-Mass.) told Tiberi.

Neal, a former mayor of Springfield, Mass., has been a long-time champion of tax-exempt bonds.

Chu offers amendment to expand earned income tax credit

11:15 a.m.

Rep. Judy Chu (D-Calif). introduced an amendment to expand the Earned Income Tax Credit, which boosts the salaries of low-income workers, for childless workers and younger workers.

“The EITC is one of the strongest and most effective anti-poverty efforts our country has to offer,” Chu said. “Yet EITC for childless workers is so small, it hardly has a tangible impact.”

Even w/ multiple jobs & loans, many students struggle to afford college. So why’s GOP using their tax scam to make it harder by taxing debt? pic.twitter.com/el233hnJvd

— Judy Chu (@RepJudyChu) November 8, 2017

 

Republicans, generally, are supportive of the EITC, but opposed the amendment.

Indiana Republican Jackie Walorski said her work on anti-poverty showed that the poor needed more human help, such as the support of a social worker, to cross the bridge out of poverty.

“I don’t support this amendment, I support what we learned to be true in the last two years of helping people bridge back into this country in pursuit of the American dream,” she said.

Doggett amendment would keep student loan interest deduction

10:20 a.m.

Rep. Lloyd Doggett (D-Texas) introduced a bill to keep a series of deductions for education, such as student loan interest and tuition and fees deductions, in place, worth about $65 billion.

“Instead of investing in people and our education, this Republican bill takes away those tax incentives and tax benefits that benefit education.”

Rep. Diane Black (R-Tenn.) said that the current tax code was so complex that it made it tough for people to know the deductions they were able to claim.

“This once again gives the opportunity to simplify this very complex code that sits in front of us,” Black said, indicating the stack of books holding the tax code in the room.

“I’m very proud of what we’re doing because it gives people an opportunity to use what’s in the code,” he said.

Lewis introduces measure to keep Johnson Amendment in place

10:10 a.m.

Rep. John Lewis (D-Ga.) introduced an amendment to keep the so-called Johnson Amendment, which prevents certain tax-exempt nonprofits from participating in political activities, in place.

“It will literally wreak havoc on the last pillar of civility in our country,” Lewis said.

Rep. Lloyd Doggett (D-Texas) highlighted the particularly controversial effect of scrapping the amendment, which would then allow churches to explicitly endorse and organize around particular candidates and parties — and use tax-deductible funds to do it.

“I believe these religious leaders realize that we don’t need a First Church of Political Expediency, or a United Congregation of Available Endorsements, or a Mega-Church of Mega PACs,” he said.

Rep. Kenny Marchant (R-Texas) said that the provision would stop the worry of the government monitoring churches.

“They should feel free to speak their minds and hearts without the fear of an IRS agent monitoring their speech,” he said.

Larson, Reed spar over medical expense and estate taxes

10:00 a.m.

Rep. John Larson (D-Conn.) excoriated his Republican colleagues over a plan to scrap the medical expense deduction, shouting that it was wrong to take the benefit away from those in need while at the same time eliminating the estate tax, which only applies to the nation’s wealthiest.

“You ask us to sit here and to pay for, with these seniors, to pay for 5,500 wealthy people who will be benefited from the estate tax repeal. That’s what we’re talking about here. Where’s the statistic for that?” he said, turning red and raising his voice.

A few people in the audience applauded.

Rep. Tom Reed (R-N.Y.) took exception to the characterization, giving an example of a senior that has $20,000 in medical expenses. The standard deduction, he said, would be $24,000 under the GOP plan, meaning those extra $4,000 dollars would not be taxed and the sick senior would be better off.

“As a proud Republican, I care a lot about people. That’s why I’m here, and I’m trying to improve their lives on a day-to-day basis. So to insinuate that I’m some evil Republican is offensive,” he said.

CBO: GOP tax bill would add $1.7 trillion to debt

9:30 a.m.

The GOP’s tax bill would add $1.7 trillion to the national debt over the course of a decade, and increase the country’s debt-to-GDP ratio by 5.9 percentage points, according to the Congressional Budget Office.

The CBO analysis found that the bill would cut revenues by $1.4 trillion, which falls within the level Republicans allowed themselves in their budget resolution, but the additional cost of debt servicing would mean that the overall debt would increase by $1.7 trillion.

9:15 a.m.

Rep. John Larson (D-Conn.) opened Wednesday’s hearing with an amendment aimed at preserving the medical expense deduction.

“Since the 1940s, medical expenses have been allowed to be deducted and it such an important thing for our senior citizens,” Larson said.

The proposed GOP bill would scrap a provision that allows people with serious medical conditions and high out-of-pocket costs, including those caring for special needs children, to deduct those expenses. A majority of claimants are over 65.

Rep. George Holding (R-N.C.) shot back that the overall plan would increase savings in all income groups, though a Joint Committee on Taxation analysis released Tuesday showed that a minority of people in every income group would see taxes go up as well.

“My friends are once again defending the status quo,” Holding said, adding that Republicans had offered a variety of medical plans over the year that he said would benefit sick Americans.

“It appears to me that this amendment is politics, plain and simple.”

Note on amendments

Wondering what’s been happening to all these proposed amendments?

After each amendment is discussed, the committee has a voice vote, but the procedure set ahead of time allows members to request a roll call vote.

After a number of amendments have been discussed, the committee will come back to the previous amendments and ask each committee member to individually weigh in on the amendments.

That’s important for Democrats, who are fashioning their amendments to get the GOP members on the record with their votes.