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This Week (December 18-22)

President signs tax bill: President Trump December 22 signed the "Tax Cuts and Jobs Act" (H.R. 1) prior to leaving Washington for the holidays, sealing the most significant legislative achievement to date of his Administration and the first major overhaul of the federal income tax in more than 30 years. The President said he was keeping his promise to sign a tax bill before Christmas, and highlighted the bill's "tax cuts for American families, including the doubling of the standard deduction and the doubling of the child tax credit." President Trump also noted commitments by major corporations to make contributions to employees as a result of the tax bill, and said companies are making investments that will create jobs. "The corporate tax rate, as you know, will be lowered from 35 to 21 percent. That means that more products will be made in the USA," President Trump said. "A lot of things are going to be happening in the USA. We're going to bring back our companies, and they've already started coming back." He also said companies will bring back trillions of dollars previously trapped overseas because of "the bureaucracy plus the tax laws," which is "something that Republicans wanted for years and Democrats wanted for years," but it never got done until now. "So this is the bill, right here, and we're very proud of it. It's going to be a tremendous thing for the American people," President Trump said. The continuing resolution approved by Congress to fund the government through January 19, 2018 waived "pay as you go" rules that otherwise would have triggered cuts to entitlement and other spending programs as a result of enactment of the tax bill. The President also signed the continuing resolution on December 22.

Celebration at the White House, on the Hill: During his remarks upon signing the bill, President Trump praised Senate Majority Leader Mitch McConnell (R-KY), House Speaker Paul Ryan (R-WI), Senate Finance Committee Chairman Orrin Hatch (R-UT), House Ways and Means Committee Chairman Kevin Brady (R-TX), and other tax writers. They had already celebrated together during a White House event on December 20, after the Senate and House approved the Conference Agreement for the bill. "Mr. President, I have to say that you're living up to everything I thought you would. You're one heck of a leader and we're all benefiting from it," Senator Hatch said during the event. "This bill could not have passed without you, couldn't have passed without the Alaskan delegation, couldn't have passed without the leadership in the House and the Senate, Paul Ryan and Mitch McConnell and the other leaders as well," Hatch added. The Senate voted 51-48 in favor of the Conference Agreement early the morning of December 20, after a point of order deemed three provisions in violation of the Byrd Rule under the budget reconciliation process and required their removal: "Tax Cuts and Jobs Act" as the short title of the bill, language allowing Section 529 accounts to be used for homeschool expenses, and references to "tuition-paying" students for purposes of the excise tax on the investment income of certain educational institutions. The House voted 224-201 in favor of the changed measure later December 20.

Lawmakers held a separate enrollment ceremony for the bill on December 21. Chairman Brady praised House and Senate GOP leaders and said, "as proud as I am of this bill, I am equally proud of the 24 members of the House Ways and Means Committee who worked long hours, evenings, weekends, came back from holidays to be ready to deliver this tax reform plan." Speaker Ryan said as a former Ways and Means chairman, "I just have to tell you how so many men and women here have fought for this moment."

JCT macroeconomic analysis: The staff of the Joint Committee on Taxation (JCT) December 22 released an analysis of the macroeconomic effects of the Conference Agreement for H.R. 1 (JCX-6917).

Tax extenders: Upon reconvening after the holidays, Congress will have about two weeks to agree to an approach to extending government funding beyond January 19, and members are looking at a host of other issues to possibly address in conjunction with that spending bill. One such priority is a tax extenders bill (S. 2256) filed by Chairman Hatch on December 20. For many of the provisions identified in the JCT list of tax provisions that expired at the end of calendar 2016, S. 2256 would provide a two-year extension comprising one year retroactively and one year going forward. For other, so-called "orphan" provisions left out of the 2015 PATH Act, the bill would provide an extension and phase-out.

The continuing resolution approved by Congress December 21 includes funding through March 31 for the expired Children's Health Insurance Program (CHIP), a four-week authorization of surveillance powers under the Foreign Intelligence Surveillance Act (FISA), and funds for certain other programs. Other issues members may push to be addressed in conjunction with the next government funding measure, or otherwise in short order, include: long-term funding for CHIP; disaster relief; the immigration status of "DREAMers" under the Deferred Action for Childhood Arrivals (DACA) program; and measures intended to stabilize the Affordable Care Act's (ACA) health insurance exchanges, such as funding for cost-sharing subsidies paid by insurers.

Next Week (December 25-29)

Congress: Congress is out of session for the holidays. The next Senate vote is scheduled for 5:30 p.m. on Wednesday, January 3. The House will reconvene on Monday, January 8.

Please note: This Week in Tax Reform will not be published again until January 12.

Quote of the Week

"All of this, everything in here, is really tremendous things for businesses, for people, for the middle class, for workers. And I consider this very much a bill for the middle class and a bill for jobs. And jobs are produced through companies and corporations. And you see that happening. Corporations are literally going wild over this. I think even beyond my expectations — so far beyond my expectations." — President Trump, December 22

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