15 February 2018 Brady says lawmakers responsible for fixing TCJA issues House Ways and Means Committee Chairman Kevin Brady (R-TX) on February 15, 2018, said lawmakers have a responsibility to "provide real, workable solutions" to problems that arise with the Tax Cuts and Jobs Act (TCJA) enacted in December, and to make sure the IRS administers the tax code with a renewed focus on fairness, integrity and taxpayer service. In an opening statement during a hearing on the President's FY 2019 Budget with Treasury Secretary Steven Mnuchin, Brady said the Committee and the Treasury Department "have a shared responsibility to ensure this new tax law is working on behalf of all Americans." Chairman Brady said he is committed to working with the Senate and Administration to address an issue with the Section 199A 20% deduction for pass-through business income that treats sales by farmers to cooperatives more favorably than sales to other buyers. "The urgent objective is to make sure that all our farmers and ranchers can reap the benefits of tax reform — and we are committed to taking action on a solution as soon as possible," he said. Speaking at the Tax Council Policy Institute conference before the hearing, Brady said, "We expect to develop a punch list of provisions that need to be addressed either administratively or through changes in the code itself," but did not indicate when members may be able to act on a technical corrections bill. The hearing follows Secretary Mnuchin's February 14 appearance at the Senate Finance Committee, where Chairman Orrin Hatch (R-UT) said he would keep pressure on the Administration to implement the law as Congress intended. In a February 13 letter to Mnuchin (attached), Hatch stressed the importance of carrying out legislative intent, including with respect to the "structural reform of taxation of inbound and outbound international transactions," and the goals of removing burdens, anti-competitive features and base erosion in the former system. In addition to the Section 199A issue, Rep. Jim Renacci (R-OH) raised another specific concern regarding the TCJA during the hearing, a drafting error that assigns "qualified improvement property" a 39-year recovery period rather than a 15-year period as intended. Secretary Mnuchin said Treasury is aware of the issue and looking into whether something can be done about it. Also during today's hearing, Ways and Means Democrats juxtaposed the cost of the tax bill with spending cuts proposed in the President's Budget. In his opening statement, Ranking Member Richard Neal (D-MA) said the TCJA primarily benefited wealthy individuals and corporations while adding significantly to the nation's deficit and debt, which the Trump Budget proposes to make up with spending cuts to programs vital to ordinary citizens, like Medicare, Medicaid and food stamps. He said instead of cutting programs for the middle class, Republicans should work on a bipartisan basis to fix problems impacting working families, such as through the new Joint Select Committee on Solvency of the Multiemployer Pension Plans. As he did during the Senate hearing, Mnuchin said Treasury would provide technical assistance to the Joint Select Committee as Congress looks at solutions. Rep. Lloyd Doggett (D-TX) said the income tax rate reduction for the top tax bracket cost more than $200 billion over 10 years, which is about the same amount the Trump Budget proposes to cut from student aid programs. "Wouldn't restoring that top rate allow us … to avoid those student assistance cuts, or if you don't want to do that, at least to moderate the harsh reduction in Medicaid that the president said would never occur?" Doggett said. Rep. Joe Crowley (D-NY) suggested that Republicans were not worried about debt when they were enacting the tax bill, but now the President wants to cut entitlements. Rep. Danny K. Davis (D-IL) said he is "appalled" at the Budget proposals for cutting basic necessities of everyday Americans, including Medicare, Medicaid, and housing subsidies. Rep. Linda Sanchez (D-CA) suggested Republicans have their priorities misplaced in passing the tax bill and then, through the President's Budget, proposing to substitute "food boxes" for food stamps. "This kicks people in the teeth that are struggling to support their families," she said. Republicans also expressed concern about the debt — some put the blame on the previous administration -and touted the benefits of proposals to curb abuse of government benefits such as the Child Tax Credit. Rep. Tom Reed (R-NY) said he believes "the debt crisis is now upon us," and wants to pursue policies to try to mitigate its effect. Rep. Renacci said the debt crisis started about 10 years ago and is a source of worry now, and lawmakers need to get spending down, especially on the mandatory side.
Document ID: 2018-0338 | |||||
