Week Ending December 21, 2017
- Congress Approves Tax (Heist) Bill
- Congress Faces Deadline on Must-Pass Spending Legislation
- Children at Risk as Congress Fails to Renew Children’s Health Insurance Program
Congress Approves Tax (Heist) Bill
The House and Senate voted largely along party lines to approve the Republican congressional leadership’s tax bill (H.R. 1), a bill that further redistributes the benefits of our economy to the wealthy and well-connected. The bill was approved in the Senate on Tuesday by a vote of 51 to 48 with no Republicans opposing the bill and no Democrats supporting it. The House held two votes on the bill due to a procedural glitch. The final bill was approved on Wednesday by a vote of 224 to 201. All Democrats opposed the bill along with 12 Republicans. The 12 Republicans were: Reps. Darrell Issa (CA), Dana Rohrabacher (CA), Rodney Frelinghuysen (NJ), Leonard Lance (NJ), Frank LoBiondo (NJ), Chris Smith (NJ), Dan Donovan (NY), John Faso (NY), Peter King (NY), Elise Stefanik (NY), Lee Zeldin (NY) and Walter Jones (NC). The bill includes the following features:
- Cuts the corporate tax rate from 35% to 21% without eliminating tax loopholes that allow corporations to pay far less than the statutory rate;
- Eliminates U.S. income taxes on profits earned on overseas operations. This will encourage corporations to outsource operations to other countries;
- Makes corporate tax cuts permanent while allowing tax cuts for individuals to expire in 2025.
- Caps state and local property, income and sales tax deductions combined at $10,000. This will cause taxes to increase for millions of middle-class taxpayers and increase pressure on state and local governments to reduce their taxes;
- Repeals the Affordable Care Act’s (ACA) individual mandate, which will cause 13 million to lose health coverage by 2025 and drive up ACA premiums;
- Increases deficits by $1.5 trillion over the next 10 years. GOP leaders are already calling for cuts to entitlement programs such as Medicare, Medicaid and food stamps to deal with deficits.
- Doubles the amount that is exempt from the estate tax;
- Does not tax the value of tuition that colleges waive for their workers and dependents;
- Does not impose a tax on any earnings from investments by public pension plans;
- Does not eliminate the medical deduction.
As we understand it, President Trump may not sign the tax bill until after the New Year because it is unclear whether Congress will be able to approve a measure to waive automatic cuts to Medicare that are triggered by the deficits resulting from the tax bill. By delaying the signing, the automatic cuts would be delayed until 2019.
Opinion polls show that the tax bill is very unpopular as the public understands that it overwhelmingly benefits the richest 1 percent and large profitable corporations.
Congress Faces Deadline on Must-Pass Spending Legislation
Congress faces a midnight Friday deadline to continue funding for federal government operations. But, as of this writing, it is unclear whether the Congress will be able to meet the deadline and what the final spending package will look like. Because GOP leaders have been focused on getting the tax bill done, they have failed to complete work on a bill to fund the government through the rest of the fiscal year, which ends September 30, 2018. They have also failed to complete work on legislation to renew the Children’s Health Insurance Program and to pass legislation to protect from deportation DACA recipients or “Dreamers,” who were brought to the U.S. as children and are now young adults. Another urgent measure to be completed is a disaster-aid package to provide hurricane and wildfire relief.
It appears that the House and Senate will vote on a stopgap spending bill that will provide a continuation of funding at current levels until January 19, 2018. The bill includes extra funding for the Pentagon, but no other agencies are provided with additional resources. This breaks a longstanding deal with Democrats that there be parity between funding increases for defense and nondefense agencies. It is unclear whether there are enough votes to pass this measure in the House and the Senate. If Congress fails to extend spending, the federal government would be shut down.
There will be a separate vote on a disaster-relief bill (H.R. 4667). But the House bill fails to provide sufficient assistance to regions of the U.S. stricken by hurricanes and wild fires. This is especially true for Puerto Rico and its people, as the bill’s funding falls far short of its governor’s request. In particular, the bill does not provide additional Medicaid funding for the commonwealth, which is urgently needed to ensure health care for children, seniors, and families who remain on the island as well as those who have been forced to relocate to the mainland.
Children at Risk as Congress Fails to Renew Children’s Health Insurance Program
Funding for the Children’s Health Insurance Program (CHIP), which covers roughly 9 million low-income children, expired at the end of September and Congress has failed to renew this program before the holiday break. With states running out of funds, the House GOP leadership will only agree to provide temporary funding to keep the program operating for another few months. But they propose to pay for the CHIP extension with cuts to public health funds that help states address opioid addiction treatment, cancer screenings and childhood vaccines.
Because of dwindling funds, a few states have started to send out notices informing families that insurance will be terminated. Other states are drawing on their own funds to manage the disruption to the program.
The CHIP extension also fails to include a measure to block scheduled cuts to public safety-net hospitals (DSH funding).
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