Tax News Update    Email this document    Print this document  

President-elect Trump is meeting with Speaker Mike Johnson (R-LA) at the Capitol today and Republican leaders are generally focused on extending government funding beyond the December 20 expiration date, probably in a way that maximizes the ability to pursue their policy agenda next year. There have been suggestions that some want to "clear the decks" with an omnibus spending bill through the end of the fiscal year (September 30, 2025), as opposed to a continuing resolution (CR) until sometime earlier next year when Republicans plan to be considering a reconciliation bill anchored by TCJA extensions.

Punchbowl News said, "both House Appropriations Committee Chair Tom Cole (R-Okla.) and Sen. Susan Collins (R-Maine), the incoming chair of the Senate Appropriations Committee, are calling for Congress to pass all 12 spending bills instead of a continuing resolution extending into next year," and "House Majority Leader Steve Scalise … agrees with Cole and Collins that Congress should clear the slate for Trump."

Next administration — President-elect Trump has been rolling out Administration nominees and appointees at a fast pace. He announced on social media that Elon Musk and Vivek Ramaswamy would head a new Department of Government Efficiency (DOGE), to operate outside of the government, following Musk's comments during the campaign about cutting trillions from the Federal budget. NBC News reported, "On the campaign trail, Trump vowed to get rid of the Department of Education. Musk has said the cuts would mean 'temporary hardship' for some people. Ramaswamy has called for mass layoffs at federal agencies, a tactic that could sidestep legal protections that otherwise insulate the federal civil service from targeted political cuts." Below is a table of some announced nominations and appointments.

Tax — A story in the November 12 Wall Street Journal (WSJ) looking ahead to a budget reconciliation bill under the expected GOP trifecta in Washington next year, once House races are called, focused on the importance of "The Number," or "the maximum budget deficit increase that Republicans are willing to tolerate as they extend tax cuts scheduled to expire after 2025" and advance other priorities like border-security spending and energy policies such as expanded drilling on federal land. While House Republicans want to act early — Speaker Johnson has said tax would be a "Day One" priority — Senator Ron Johnson (R-WI) said a "straight extension" of tax cuts would be a "mindless approach" and detract from the pursuit of rate-lowering, base-broadening tax policies. He also called for pumping the breaks on timing. "We've got a year. I'd rather take that year," he said. "The clock is ticking on this but we don't have to hop on this in the first few months."

Elections — The latest Republican House victory as the party seeks to cement the House majority in the next Congress is Rep. David Valadao (R-CA) in CA-22. The AP has Republicans at 216 in the next Congress, with 218 needed for the majority, compared to 207 for Democrats. A Washington Post story, headlined "House Nearly in its Grasp, GOP Readies to Flex Its Power," said, "though control of the House may not be called for days, GOP lawmakers will this week work on the assumption they've clinched it." Still, Democrats "maintain that they still have a narrow path to the House majority."

A Republican majority would be narrow as it is in the current Congress and the Democratic-led House before it, though the influence of President-elect Trump may assist in keeping GOP members cohesive. Speaker Johnson suggested November 12 that leaders understood the assignment and would hit the ground running in the next Congress: "We are ready to deliver on America's mandate in the next Congress. When President Donald Trump won the presidency in 2016, we all looked back and recognized that the Republican Party was not fully prepared for that moment and precious time was wasted in the beginning of that Congress … We are not going to make those mistakes again. We will be ready on Day One."

Of course, with the election developments comes speculation about changes to the membership of the tax-writing committees. Senators Sherrod Brown (D-OH) and Bob Casey (D-PA) lost their elections, bringing the number of Democrats departing the Finance Committee in the next Congress to six, with three members retiring (Cardin, Carper, Stabenow) and George Helmy (D-NJ) only serving out the remainder of this Congress in place of former Senator Menendez. Ways & Means retirements include Reps. Brad Wenstrup (R-OH), Drew Ferguson (R-GA), Earl Blumenauer (D-OR), and Dan Kildee (D-MI).

Punchbowl News reported this morning that "GOP Reps. Rich McCormick (Ga.), Max Miller (Ohio), Nathaniel Moran (Texas) and Rudy Yakym (Ind.) are interested in joining" Ways & Means, and Democrats could bring back members cut from the panel in prior congresses like Stacey Plaskett (D-VI) and maybe Rep. Tom Suozzi (D-NY), who left Congress and returned. The report said Republican Senators Kevin Cramer (ND) and Pete Ricketts (R-NE) are interested in joining Finance, where Republicans could add a member after retaking the Senate majority, as is Bernie Sanders (I-VT).

Leadership elections — There are leadership elections today for Republicans in both the House and Senate. The current slate of House leaders is vying to remain in power aside from the fourth-ranking position, now held by Rep. Elise Stefanik (R-NY), a Trump ally who has been offered the post of ambassador to the United Nations. In today's Senate election to replace Mitch McConnell (R-KY) as Republican leader, and Majority Leader in the next Congress, are tax-writers John Thune (R-SD) and John Cornyn (R-TX), plus Senator Rick Scott (R-FL). President-elect Trump has been pressuring the nominees to be open to recess appointments.