Week ahead in finance: Clock ticking for GOP on tax reform

The clock is ticking on Republican efforts to pass comprehensive tax reform.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Wednesday said the framework of a tax reform plan agreed to by House and Senate GOP leaders and the White House would be released the week of September 25.

That gives them roughly two weeks to finalize their blueprint even as many key players remain sharply divided and with many questions about what the final plan could entail.

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Republicans want to cut tax rates, broaden the tax base and eliminate major deductions and the “Big Six” — Speaker Paul Ryan (R-Wis.), House Ways and Means Chairman Kevin Brady (R-Texas), Senate Majority Leader Mitch McConnell (R-Ky.), Senate Finance Chairman Orrin Hatch (R-Utah), Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn — have been pushing ahead.

Brady reportedly laid out an ambitious timeline in a meeting, with both chambers passing a budget resolution by mid-October.

The GOP needs to pass the resolution to use the fast-track “reconciliation” procedure, which will allow their tax package to avoid a Democratic filibuster in the Senate.

The Ways and Means Committee would then plan on releasing its tax bill after the budget process is completed.

Republicans, though, face a tightening window.

It’s been more than 30 years since the last major tax reform package passed Congress, and the GOP is aiming to finish their efforts by the end of the year.

Failure to pass tax reform this year means lawmakers will have to punt it to 2018, where midterm elections will give them a shorter calendar and raise new political pressures.

And many of the key players may still be divided over the details, and others, including more conservative lawmakers, will want to weigh in. Hatch has already cautioned that the Big Six guidelines may not reflect what ends up in any final tax reform bill.

House lawmakers will be away from Washington in the coming week and the upper chamber will have a shortened schedule, with senators planning to leave Wednesday.

But there are a number of other big ticket items on the agenda.

The Senate is working to wrap up work on their annual defense policy bill on Monday.

Work on the bill has been delayed by fights over which amendments should get votes. Senate Armed Services Committee Chairman John McCain (R-Ariz.) has a package of over 100 amendments tied to the bill, but others could also get votes.

The Senate, though, is expected to quickly pass the defense bill in the coming week. House and Senate negotiators will then have to reconcile their versions, including differences on spending levels.

President Trump’s deal with Democrats to raise the debt ceiling and extend government funding through the middle of December might have helped clear the decks for other issues with their own impending deadlines.

Lawmakers will need to also broker a deal to keep the National Flood Insurance Program running past September 30. That issue has gained more urgency following the devastating floods in Houston after Hurricane Harvey.

Also facing deadlines this month: new funding for the Children’s Health Insurance Program and reauthorizing the Federal Aviation Administration.

Expect more wrangling over immigration in the week ahead.

Trump struck a tentative agreement with Democratic leaders to extended the Deferred Action for Childhood Arrivals program enacted by President Obama in exchange for boosting border security. The agreement stunned many of Trump’s conservative supporters. But Republican leaders noted they still control both chambers and that any agreement would need to go through them.

All eyes will also be on the Federal Reserve in the coming week.

The central bank’s Federal Open Markets Committee will meet Tuesday and Wednesday, followed by a press conference from Federal Reserve Board Chairwoman Janet Yellen.

The bank is expected to initiate its plan to sell-off billions in debt it purchased to stabilize markets during the financial crisis. Yellen’s conference will be her first appearance before reporters since Vice Chairman Stanley Fischer announced his plans to resign in mid-October, and she’ll likely hear questions about her own future at the bank. Yellen’s term as chair expires in 2018. Trump has praised Yellen recently, but is also reportedly mulling potential replacements.

 

Your week ahead: 

Tuesday:

• U.S. Chamber of Commerce: Event entitled “Proxy Season 2017: Examining Developments and Looking Forward to 2018,” 8:30 a.m. http://bit.ly/2wvlclA.
• Business Roundtable releases third quarter CEO economic outlook, 9:45 a.m.
• Senate Finance Committee: Hearing on corporate tax reform, 10 a.m. http://bit.ly/2vYqLK0.
• Federal Reserve’s Federal Open Markets Committee (FOMC) begins two-day meeting

Wednesday:

• Fed’s FOMC meeting ends with press conference from Federal Reserve Board Chair Janet Yellen, 2 p.m.
• U.S. Chamber’s Forecast on Latin America and the Caribbean Conference http://uscham.com/2wvncKO.

 

Recap the week with Overnight Finance:

Monday: Outrage builds over Equifax breach | US debt passes $20 trillion | Trump scrambles tax reform politics | Trump may seek more disaster aid

Tuesday: McConnell, Schumer spar over debt limit | WH says tax reform depends on Dems | Mnuchin doubts Trump’s corporate tax goal possible | Dem wants criminal probe of Equifax stock sales | Mystery surrounds Cordray’s plans

Wednesday: GOP plans to unveil tax framework in late September | Critical stretch for Trump tax team | Equifax CEO called to testify | Sanders unveils single-payer bill

Thursday: House passes $1.2T funding package for 2018 | FTC launches Equifax probe | Mnuchin defends honeymoon jet request |

 

Today’s stories:

Brown, Portman urge Trump administration to move quickly on a steel decision, by Vicki Needham

Dems call on DeVos to work with CFPB to protect student borrowers, by Lydia Wheeler

Liberal groups want Mnuchin off GOP tax group following airplane controversies, by Naomi Jagoda

GOP rep, biz owners, call for tax cuts outside IRS building, by Naomi Jagoda

Business groups launch new tax reform ads, by Naomi Jagoda

 

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