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January 31, 2024

What to expect in Washington | January 31

The wait may be over: a vote on the Tax Relief for American Families and Workers Act (H.R. 7024) TCJA pre-cliffs and expanded Child Tax Credit (CTC) bill is on today's House schedule. The bill is listed as "Legislation Considered Under Suspension of the Rules," which requires a two-thirds majority vote, bypasses the Rules Committee that is stacked with conservatives, and doesn't allow for amendments to address relief from the TCJA $10,000 SALT deduction cap or any other issues.

The scheduling development capped a tumultuous two days of uncertainty over the vote that produced a heretofore unseen alliance between Republicans in Biden-won states seeking SALT deduction cap relief and conservative Freedom Caucus members worried about potential immigration impacts related to the CTC expansion. High-tax state Republicans were seeking a $20,000 SALT deduction cap for joint filers. Four New York delegation members — Reps. Anthony D'Esposito (R-NY), Mike Lawler (R-NY), Marc Molinaro (R-NY), and SALT Caucus Co-Chair Andrew Garbarino (R-NY) — threatened to use voting against the rule for unrelated legislation to leverage their position on the SALT issue, and initially voted against a rule for Judiciary Committee immigration-related bills before ultimately switching their votes to yes.

Ways & Means Committee Chairman Jason Smith (R-MO) had been rallying support from members, and he and Speaker Mike Johnson (R-LA) had been meeting with SALT caucus members and conservatives. Punchbowl reported that both House Freedom Caucus Chair Bob Good (R-VA) and Rep. Chip Roy (R-TX) huddled with Smith in his Ways and Means hideaway off the House floor, and Good wanted leadership to "address the fact that illegals can access a child tax credit." Chairman Smith said the credit can only go to families whose children have a Social Security number, the same policy as under the TCJA.

Politico: "I'm not going to support something that expands the Child Tax Credit, which is expanding the welfare state massively," Good added. "And I'm not going to support tax credits, Child Tax Credits, going to illegals. I think that's incentivizing this illegal invasion." In the report, Rep. Mike Garcia (R-CA), a SALT Caucus member, argued against voting down unrelated rules. "I don't personally like that tactic. I think that's a tactic of the Freedom Caucus," he said.

Roll Call reported, "It wasn't immediately clear what concessions had been promised to members seeking changes to the tax bill, which Ways and Means approved 40-3 earlier this month. Smith declined to comment after the rule vote Tuesday … " Rep. Nick LaLota (R-NY), long vocal on the topic, "pitched a bill he introduced that would increase the $10,000 cap to $80,000 for individuals and $160,000 for couples filing taxes together," the report said. "But he said he'd be open to more modest changes, specifically inclusion of a bill introduced by Lawler that would double the cap to $20,000 for married couples."

Morning Tax said this morning, of SALT members: "Their demands aren't the most expansive — one of the ideas they're tossing around is to allow married couples to write off $20,000 in state and local deductions — but the issue for GOP leaders is that the SALT limits are broadly popular in the conference, not to mention among Republicans in the Senate."

Another report said, "One idea under consideration would be to move a second tax bill in parallel with the $78 billion family and business tax cut deal negotiated by Ways and Means Chairman Jason Smith, R-Mo., and Senate Finance Chair Ron Wyden, D-Ore. That second bill would pair relief from the $10,000 state and local tax deduction cap with a requirement that parents collecting the child tax credit provide a Social Security number … The new child credit requirement could offset some of the cost of expanding the current 'SALT' limit, helping alleviate concerns of deficit hawks … "

Outside pressure to move the bill continues. "Americans for Tax Reform urges all Members of Congress to vote 'YES' on the Tax Relief for American Families and Workers Act (H.R. 7024)," the group said in a statement, making the bill a "key vote."

The Senate Finance Committee is holding a hearing today (January 31) on the nominations of Corey Anne Tellez to be Assistant Secretary of the Treasury for Legislative Affairs and three nominees to be members of the Social Security Advisory Board. The Committee will hold an Open Executive Session to revote the nomination of Marjorie Rollinson to be Chief Counsel for the Internal Revenue Service, which had to be resubmitted at the start of the new session of Congress, at 10 a.m., prior to the hearing.

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Washington Council Ernst & Young