November 13, 2017 Senate Finance Committee tax reform markup begins The Senate Finance Committee markup of the "Tax Cuts and Jobs Act" got underway on November 13, 2017, with opening statements and an assurance from Chairman Orrin Hatch (R-UT) that there is no cause for concern about what will be required to adhere to budget reconciliation rules. The markup will continue on Tuesday, November 14, at 9 a.m. The Committee's Majority staff earlier November 13 said Chairman Hatch expects to release a modified Chairman's Mark on Tuesday that could incorporate filed amendments that have strong consensus among the Committee, as well as additional modifications to the base mark. Following a walk-through of the Mark, the amendment process will be in full swing on Tuesday or Wednesday, staff said. It is unclear when the markup will conclude, but Hatch previously stated he wants to complete consideration by week's end. In an opening statement, Chairman Hatch said the mark, as originally introduced, "leaves us with some work to do in order to make the reforms permanent, particularly on the business side where job creators need to be able to plan many years into the future. We are, of course, aware of this problem and are working to ensure that the reduced rates and additional reforms designed to bring investment back to the United States and create more American jobs remain in place past the 10- year budget window." Chairman Hatch continued to say there is "no real cause for concern at this point. But I do want to make clear that we're looking at a number of alternatives that will fill the necessary gaps and we have every intention of making the business reforms permanent." The Byrd Rule of the budget reconciliation process under which the bill is being considered precludes any title of the tax bill from adding to the deficit beyond the 10-year budget window. It is likely that changes will have to be made to the Chairman's Mark before the bill is brought to the Senate floor in order to accommodate this rule. In his opening statement, Ranking Member Ron Wyden (D-OR) expressed opposition to the bill's elimination of the state and local tax deduction, which he said will harm "not just Oregon, California and the northeast" but "millions of people in Wisconsin, Arizona, Georgia, the Carolinas and places across the country that pulled the lever for Republicans last November." Senator Ben Cardin (D-MD) noted that the state and local tax deduction would be limited for individuals and not businesses. Senator Wyden said the bill is "going to go through major contortions in the days ahead" involving "the same bottom line — getting the biggest possible corporate handout through the Senate on a strictly partisan basis." Senator Maria Cantwell (D-WA) questioned Republican efforts at bipartisanship, noting that she was not invited to a White House meeting on the issue that included other Finance Democrats because she represents a state the President didn't win — a "ridiculous idea." Senator Sherrod Brown (D-OH), who was invited to that meeting, expressed concerns about American workers being laid off in the wake of the last foreign earnings repatriation tax holiday. Senator Claire McCaskill (D-MO) said she is worried about the complexity that would remain in the tax code under the Chairman's Mark, as well as about parity between corporations and regular Americans. She said the Mark does not eliminate corporate provisions in the same way as it strips benefits for individuals. Senator Mark Warner (D-VA) said he is disappointed in the process, which he said does not uphold the strong bipartisan credentials of the Committee. Like McCaskill, he said the tax bill is being rushed through the Committee. Warner promoted his amendments to require companies repatriating earnings at a reduced tax rate to be required to offer workforce training, and to require that rate cuts only take effect if revenues promised by Republicans materialize. Meanwhile, a Congressional Budget Office (CBO) cost estimate of the House Ways and Means Committee-passed version of the "Tax Cuts and Jobs Act" said the bill is considered to be "major legislation," and therefore triggers the requirement that the cost estimate, to the extent practicable, include the budgetary impact of its macroeconomic effects. The staff of the Joint Committee on Taxation is currently analyzing elements of the bill, but indicates it is "not practicable for a macroeconomic analysis to incorporate the full effects of all of the provisions in the bill, including interactions between these provisions, within the very short time available between completion of the bill and the filing of the committee report," CBO said. On a conventional basis, CBO said the House bill would reduce revenues by about $1.44 trillion over the 2018-2027 period, which JCT has previously reported. Hatch and Wyden opening statements are attached, along with the CBO cost estimate. ———————————————
——————————————— Hatch Opening Statement
Wyden Statement
HR1 Cost Estimate
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