This week (December 12-16)

Congress out: The House is likely out until the New Year after approving a continuing resolution (CR) to extend government funding through April 28, 2017. The Senate is expected to be out of session unless agreement cannot be reached on the CR.

House Ways and Means Committee Republican members will be meeting in Washington December 14-15 and "going through the decision points on tax reform and health care," according to Chairman Brady.

Last week (December 5-9)

Trump tariff plan met with tax reform calls: President-elect Donald Trump's proposal to impose a 35% tariff on the imported products of companies that move jobs out of the United States was met with calls for tax reform instead. "I don't want to get into some kind of trade war," House Majority Leader Kevin McCarthy (R-CA) said December 5, a day after a series of Trump tweets regarding a tariff on any company that "fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back" into the United States. "You want to create jobs in America," McCarthy said. "Today the best way to make that change is through tax reform." Asked December 6 whether Trump's tariff proposal is consistent with House Republican plans for tax reform, Speaker Paul Ryan (R-WI) said: "It's consistent with our goal to make American businesses and American products more competitive in the global economy. And we believe the best way to achieve that goal is through comprehensive tax reform … So we think the real solution here is comprehensive, across-the-board tax reform which is what we're going to be hitting the ground running on and working on in early 2017." On CNBC December 7, Speaker Ryan said, "I think what he's trying to get at is there's a new sheriff in town and we're going to go really work on keeping businesses here, keeping jobs here, getting growth … We can address this through tax reform." Senate Finance Committee member Tim Scott (R-SC) had a similar reaction, reported in the Washington Post, saying, "I'm not sure that he is specifically suggesting that we should have 35% tariffs as much as he is suggesting that the playing field is not level for the average American worker." Asked for his take on the situation December 6, Senate Majority Leader Mitch McConnell (R-KY) said, "What we want is to do everything we can to keep American jobs from being exported. The President-elect has suggested a lot of different ways to look at that. The most important issue he is on board for, which is comprehensive tax reform, which makes it less likely companies will want to leave in the first place. But all the other tactics that could be employed are going to be discussed by Republicans."

Ryan on tax reform, regulation: Asked during the CNBC interview about the dynamic between the 15% corporate rate proposed by President-elect Donald Trump and the 20% corporate rate proposed under the House Republican Blueprint on tax reform released in June, Speaker Ryan said, "It's going to come down to how the numbers add up as to how low we can get that rate. We believe we can do it at 20% right now; if we can squeeze the numbers and plug more loopholes and get to 15%, great — the lower the better as far as I am concerned." Asked about the prospect of Trump repealing regulations, Ryan said an analysis is being conducted with the Trump transition team about what the incoming administration can do on their own "when his hand comes off the Bible, he goes down to Pennsylvania Avenue, signs executive orders. So what can he do administratively, what do we need to do legislatively?" He said the analysis includes looking at what regulations cannot be undone by the new administration unilaterally and that Congress may have to be involved in through the Congressional Review Act. On "60 Minutes" December 4,Speaker Ryan was asked about the size of the tax cut for the middle class under forthcoming tax reform and said he did not have a number to offer but, generally, everyone will get lower tax rates, with "loopholes" closed to pay for it. "[W]e haven't written this bill, but to give you a sense of what we're looking at, it's virtually identical with the one the Donald Trump rolled out in the campaign," he said.

Koch Industries on border adjustability: A December 7 statement by politically influential Koch Industries expressed support for comprehensive tax reform but voiced concern about the border adjustability element of the House Blueprint, under which "Made in America" products will no longer be taxed and imports will not be subsidized. "[W]e worry that the border-adjusted tax provision proposed in the House Republican blueprint would adversely impact American consumers by forcing them to pay higher prices on products produced in and goods imported to the U.S. that they use every single day … " according to a statement from Philip Ellender, president of government and public affairs for Koch Companies Public Sector, LLC. "The proposed border tax adjustment will distort the market, increase consumer prices and create an uneven playing field for companies and consumers alike." House Ways and Means Chairman Kevin Brady (R-TX) was reported by Bloomberg BNA as saying December 8, "This is a crucial part of pro-growth tax reform … But we want to hear more and learn more about their specific concerns because I'm hopeful we can address them."

Quote of the Week

"Unfortunately, what we know regarding the intentions of the president-elect and congressional leadership suggest that they are at risk of pushing through the most misguided set of tax changes in U.S. history. The proposals from the presidential campaign, reiterated last week by President-elect Donald Trump's choice for Treasury secretary, will massively favor the top 1% of income earners, threaten explosive growth in federal debt, complicate the tax code and do little if anything to spur growth." - Former Treasury Secretary Lawrence Summers, December 5 Washington Post op-ed.

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