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Republican plans for addressing extensions of TCJA end-of-2025 expiring provisions and perhaps other issues, including tax proposals put forward by President-elect Trump during the campaign, and how to pay for them — or not pay for them — are coming into greater focus.

On Fox Business November 20, incoming Senate Finance Committee Chairman Mike Crapo (R-ID) doubled down on his previous contention that extensions of current tax policy needn't be offset, continuing to cite the end-of-2012 extension of the Bush tax cuts. "Barack Obama, when he faced this same question — when President Bush's tax cuts were expiring — did the same thing I'm proposing. That is to say, if you're just extending current law, we're not raising taxes or lowering taxes," he said. "To say that is a $4 trillion deficit is ridiculous. There is a difference between a tax increase and $4 trillion of spending, and we just have to get that message out to America." Crapo continued, "We're going to have to take the bold steps of saying to the American people that we are not going to let $4 trillion of tax hikes happen and that it's not going to increase the deficit."

Other proposed revenue sources are raising concerns among some members. During a November 20 Bloomberg Government event, House Ways and Means Trade Subcommittee Chairman Adrian Smith (R-NE) expressed some nervousness about proposed tariffs and using the revenue for budgetary purposes. He suggested that there is some notion that tariff revenues would go to agricultural producers to offset retaliation from tariffs. Punchbowl News reported on a November 19 meeting among Ways & Means Committee Republicans during which members asked several questions about tariffs, likely reflecting that, "For some Republicans, voting to slap big-time tariffs on foreign-made goods would be politically painful. That's because they'd almost certainly trigger retaliatory tariffs that would hit key GOP constituencies — namely, agriculture," the report said. Also in the report: "I keep going back to the fact that I'm not a huge fan of tariffs," Rep. Adrian Smith said. "I believe they, however, need to be a tool in the toolbox. The question is how should they be used, and I think we're set to have some good discussions on it."

There were previous reports about Trump advisors discussing with Ways & Means GOP leaders the prospect of at least partially paying for a tax bill with tariff revenue.

Also, during the Bloomberg Government event, Senate Finance Committee member Ron Johnson (R-WI) was skeptical of broad tariffs, saying, "I can see where tariffs are used strategically in certain areas to discipline the bad actors, but I like to have as few as possible." Senator Johnson echoed from other leaders that Republicans will have "two bites at the reconciliation apple" next year — Congress didn't pass a budget for FY2025, and that resolution can provide for one reconciliation bill, with another for FY2026 — and said there have been discussions of an initial reconciliation bill focused on Trump campaign tax proposals and a follow-on bill later he wants to include a reconsideration of the tax system beyond just TCJA extensions.

Senator Johnson said he would like to see a process to dramatically simplify and rationalize the tax code and come up with something that works for the economy. He said he is particularly interested in corporate integration, or taxing all income equally at the shareholder level.

There was also talk among panelists at the event about the voice Democrats will have as tax legislation is considered. As the minority party in 2017, Democrats were excluded from input into the TCJA despite being active in committee-level exercises in the run-up to tax reform.

Asked on Fox News November 21 whether the tax agenda Republicans envision will be limited to TCJA extensions or encompass some of President-elect Trump's tax proposals, House Ways & Means Committee Chairman Jason Smith (R-MO) said: "So what our tax teams have been doing, Neil, is looking at the provisions of TCJA from 2017 to see if they worked the way that they were supposed to, should they be tweaked or modified, and to address that. But, also, the president campaigned on numerous different tax provisions, such as the no tax on tips, tax on Social Security, overtime incentives for manufacturing in the United States. So, there's a whole list of things, so we're looking at everything when we're moving forward on this economic package."

In a separate Fox Business interview, Chairman Smith said, "We are ready at the Ways and Means Committee on day one to pass a tax bill." He further said, "One of the biggest tax breaks that is going to expire at the end of next year is something that they refer to Maria as Section 199A. I call it the Small Business deduction. It affects pass throughs, LLCs, Subchapter S's, and that's a 20% deduction to try to give it equal parity to the corporation rate. That will completely expire."

Democratic perspective — During the November 20 Senate Banking Economic Policy Subcommittee hearing, "Tax Policy in 2025: Implications for the American Economy," Chair Elizabeth Warren (D-MA) said in an opening statement, "Donald Trump and Congressional Republicans have made perfectly clear that they are planning another huge tax giveaway to billionaires and billionaire corporations. Donald Trump said it out loud on the campaign trail: big tax cuts will be a payoff for his 'rich as hell donors.'" She said, "The tax fight is starting now, and every person in the United States — every person in the Senate needs to show the American people what side we stand on. Will we sign our names to more giveaways to President-elect Trump's billionaire buddies, or will we fight for tax fairness for the American people?" Like a previous Subcommittee tax hearing, Republicans did not participate.

Energy tax — Reps. John Moolenaar (R-MI) and Jared Golden (D-ME) November 20 introduced a resolution (H.J. Res. 225) to disapprove of the Biden administration's recently finalized Treasury rule on the IRC Section 45X advanced manufacturing production tax credit, in the interest of preventing certain foreign rivals from benefiting from the credit.

Year-end business — In floor remarks November 21, current Senate Majority Leader Chuck Schumer (D-NY) enumerated the items Congress must address after the Thanksgiving break and before year end: "When the Senate returns after Thanksgiving, Senators can expect a very busy few weeks to finish our work before the end of the year. Both sides must continue working together to keep the government open beyond the December 20th deadline … We must also pass the annual defense authorization bill, to provide for our troops and hold the line against America's adversaries abroad … We also hope to make progress on the farm bill, to avoid going over the so-called dairy cliff at the end of December … Another issue we hope to get done is disaster aid. Both sides know we need to act, because both sides represent states that have been impacted by disaster."

Next administration — In a November 20 Wall Street Journal op-ed, Elon Musk and Vivek Ramaswamy, picked to head a new Department of Government Efficiency (DOGE), cited an EPA-related Supreme Court ruling and the Loper Bright ruling that overturned the Chevron doctrine that generally required federal courts to defer to agency interpretations of ambiguous statutory provisions, and said: "DOGE will work with legal experts embedded in government agencies, aided by advanced technology, to apply these rulings to federal regulations enacted by such agencies. DOGE will present this list of regulations to President Trump, who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission." The op-ed also discussed a potential reduction in the federal agency workforce.

Former Rep. Matt Gaetz (R-FL) withdrew his AG nomination, and Pam Bondi was nominated instead. Still awaited on President-elect Trump's incoming economic team are his selections for Treasury Secretary, National Economic Council Director, USTR, and Chair of the Council of Economic Advisors. Potential Treasury candidates include hedge fund manager Scott Bessent, former Federal Reserve governor Kevin Warsh, investor Marc Rowan, and Senator Bill Hagerty (R-TN).

With Congress away next week, What to Expect in Washington won't be published, but WCEY Alerts will be issued as events warrant.