Issues / Legislation » Legislative Weekly Reports

Week Ending October 20, 2017

Senate Passes Budget, Clears Path for Work on Harmful Tax-Cut Bill

On Thursday night, the Senate voted 51 to 49 to approve its FY 2018 budget resolution (S. Con. Res. 25), which paves the way for Republican congressional leaders to advance legislation to cut taxes for the wealthy and corporations, paid for with cuts to Medicare, Medicaid, education and other public services. The budget was opposed by all Democrats and by one Republican, Sen. Rand Paul (KY), who complained that the bill would increase deficit spending by $1.5 trillion over 10 years and raise taxes on the middle class.

Like the budget resolution approved by the House, the Senate measure would allow tax-cut and spending cut legislation to be pushed through the Senate under expedited procedures that limit the ability of Democrats and moderate Republicans to influence the legislation. While the House has passed its own, somewhat different budget, House Republican leaders have signaled that they hope to move the Senate bill to a House vote next week, clearing the way for work on tax-cut legislation.

The Republican leadership’s tax plan was developed with the White House and would grant large tax breaks to millionaires and reduce taxes paid by large, profitable corporations. Highlights of the plan include a $249 billion giveaway to the richest 5,500 estates each year by repealing the federal estate tax, which currently applies only to estates exceeding $5.5 million. The plan also would reduce the maximum tax rate for corporations from 35 percent to 20 percent and repeal the alternative minimum tax, which ensures that the wealthiest Americans who use tax loopholes pay at least some federal income tax. The plan would lower tax rates on the business income of many entities that are described as small businesses but are frequently very large. Multinational corporations with profits stashed offshore could get as much as $600 billion in new tax breaks.

Some middle-class families would actually see a tax hike under the GOP plan. For example, the plan would repeal the deduction for state and local government taxes paid by individuals. This deduction not only benefits many middle-class families, but helps state and local governments maintain their tax revenues for public services.

Bipartisan Measure to Stabilize the Insurance Market Introduced

Led by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA), a bipartisan group of 24 senators introduced legislation on Thursday that would reverse a recent step taken by President Trump to sabotage the Affordable Care Act (ACA). The legislation would extend federal cost-sharing reduction (CSR) payments that are used to reduce deductibles and copays for low-income families who purchase ACA health coverage. Under the ACA, insurance plans are required to reduce these out-of-pocket expenses and the federal government is required to reimburse insurance companies for this cost. However, after threatening to end the payment for months, President Trump announced one week ago that he would stop making them, falsely describing them as a bailout to the insurance industry.

The uncertainty over the continuation of CSR payments has led insurance companies to decide not to offer coverage in many communities next year and to increase premiums by 20 percent or more. If enacted into law, the Alexander-Murray bill would stabilize the insurance market and lower premiums.

The legislation also includes $106 million in funding for outreach and enrollment efforts, which the Trump administration had also rescinded. While there is enough support to pass this legislation in the Senate, it is unclear whether Republican leaders will allow the bill to advance.

Senate Committee Clears Labor Department Nominees

On Wednesday, the Senate Health, Education, Labor and Pensions Committee voted 12 to 11 along party lines to advance President Trump’s nominations of Patrick Pizzella and Cheryl Stanton for positions at the Department of Labor (DOL). Pizzella is the nominee for Deputy Secretary of Labor, and Stanton has been nomintated to head the Wage and Hour Division. Many Democratic senators expressed doubts during the hearing that these nominees would prioritize enforcement of rules that protect workers’ pay, safety and benefits. A vote on these nominations by the full Senate has not been scheduled.

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