November 8, 2017

House Ways & Means Committee Continuation of the Markup of H.R. 1, Tax Cuts and Jobs Act Day 3

Key Takeaways

• Democratic Amendments: There were a total of 15 amendments introduced by Democrats, though none were agreed to in party-line votes.
• Private Activity Bonds: Rep. Suzan DelBene (D-Was.) introduced an amendment that would reinstate private activity bonds (PABs) and expand the low-income housing tax credit (LIHTC), stressing that H.R. 1 as written will worsen the housing crisis through eliminating PABs. Members from both sides agreed that when used correctly, PABs fund important infrastructure projects, and Republicans pledged to continue work on the issue outside of H.R. 1. The amendment was not agreed to in a 16-24 vote.
• Advance Refunding Bonds: Rep. Terri Sewell (D-Ala.) introduced an amendment that would restore advance refunding bonds in H.R. 1, explaining that advance refunding allows municipalities to take advantage of refinancing to lower interest rates, allowing taxpayer dollars to be used “as prudently as possible.” The amendment was not agreed to in a 16-24 vote.
• Carried Interest: Rep. Sandy Levin (D-Mich.) introduced an amendment that would close the carried interest loophole, identical to legislation introduced in 2015. The amendment was not agreed to in a 16-24 vote.

Bill Considered

• H.R. 1, Tax Cuts and Jobs Act

Amendment Offered by Rep. Larson

Rep. John Larson (D-Conn.) introduced his amendment, explaining that it will reinstate the medical expense deduction that H.R. 1 eliminates. Other Democrat supporters included Reps. Bill Pascrell (D-N.J.), Lloyd Doggett (D-Texas), Ron Kind (D-Wis.), Danny Davis (D-Ill.), Judy Chu (D-Calif.), Linda Sanchez (D-Calif.), and Earl Blumenauer (D-Ore.).

Rep. George Holding (R-N.C.) opposed the amendment, stating that H.R. 1 reduces taxes at every income level and that the medical expense deduction is no longer needed due to the increase in standard deductions in the bill. Other Republicans who opposed the bill included Reps. Peter Roskam (R-Ill.), Jim Renacci (R-Ohio), David Schweikert (R-Ariz.), and Tom Reed (R-N.Y.).

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Lewis

Rep. John Lewis (D-Ga.) introduced his amendment, stating that it strikes Section 5201 of H.R. 1, which repeals the Johnson Amendment. Doggett supported the amendment, as it will preserve the “independence and integrity” of religious organizations and charities. Other Democrat supporters included Reps. Richard Neal (D-Mass.), Mike Thompson (D-Calif.), Kind, and Davis.

Rep. Kenny Marchant (R-Texas) argued that churches should be able to “speak their minds without fears of IRS agents monitoring what they say.” Other Republicans opposing the amendment included Reps. Pat Meehan (R-Pa.) and Roskam.

The amendment was not agreed to in a 16-23 vote.

Amendment Offered by Rep. Doggett

Doggett introduced his amendment, which will restore the “important education tax incentives” that H.R. 1 currently repeals, including the deduction for student loan interest and the tuition and fees deduction. The amendment will also allow teachers to continue to deduct the cost of classroom materials. Other Democrat supporters included Reps. Neal, Pascrell, Davis, Kind, Suzan DelBene (D-Wash.), Chu, Terri Sewell (D-Ala.), and Larson.

Rep. Kristi Noem (R-S.D.) argued that provisions in H.R. 1 already support education and teachers, and argued that teachers will now be able to save over $1,000 in tax cuts. Other Republican opposers included Reps. Diane Black (R-Tenn.), Schweikert, Carlos Curbello (R-Fla.), Mike Bishop (R-Mich.), Mike Kelly (R-Pa.), Erik Paulsen (R-Minn.), and Jackie Walorski (R-Ind.).

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Thompson

Thompson introduced his amendment, which extends tax relief for homeowners who receive mortgage debt forgiveness following home damages such as those due to a fire, flood, or mudslide. Thompson explained that under H.R. 1, homeowners would get a “tax hike” on their mortgage deduction. Thompson continued that his amendment would strike a portion of H.R. 1 that would increase the number of years a homeowner must live in their home to benefit from tax benefits. He explained that under current law, a homeowner must live in their home for at least two of the previous five years; H.R. 1 amends this requirement to at least five of the previous eight years. Thompson stated this is “patently unfair” and hurts working class families trying to move into better or bigger homes.

Schweikert stated the provision in H.R. 1 that requires residency in the home for five years is intended to “stabilize neighborhoods” and prevent people from “gaming the system” by continually flipping houses and benefiting from tax breaks.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Chu

Chu introduced her amendment, stating that it will help the middle-class by expanding the Earned Income Tax Credit (EITC) to childless workers, as they are currently the only group excluded from the credit. Other Democrat supporters included Reps. Neal, Blumenauer, Davis, and Sewell.

Rep. Dave Reichert (R-Wash.) opposed the amendment, explaining that it does not address “any of the underlying issues,” and that childless workers should be engaged “in other ways,” such as welfare reform. Other Republicans who voiced opposition included Reps. Adrian Smith (R-Neb.), Walorski, Tom Rice (R-S.C.), and Schweikert.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. DelBene

DelBene explained that her amendment will reinstate private activity bonds (PABs) and expand the low-income housing tax credit (LIHTC), stressing that H.R. 1 as written will worsen the housing crisis through eliminating PABs.

Pascrell voiced his strong support for the amendment, stressing the importance of restoring PABs, as communities rely on them to fund infrastructure projects, adding that PABs are the “best method of pumping billions of dollars of private capital into public infrastructure projects.” Davis also voiced his support, stating that tax exempt bonds are “lifesavers,” and that without them, distressed communities will not get necessary redevelopment. Other Democrats who voiced their strong support for the amendment included Reps. Sewell, Sandy Levin (D-Mich.), Kind, Blumenauer, and Neal.

Rep. Pat Tiberi (R-Ohio) stated that he is a “big supporter” of LIHTC and PABs, and that he does not disagree with Democratic arguments. He continued that while he wishes PABs were included in H.R. 1, he pledges to continue to work with Democrats and the Chairman on “tightening up language” to prevent abusing PABs for projects such as golf courses and office buildings. Chairman Kevin Brady (R-Texas) also stated he would continue to work on the issue. Other Republicans who opposed the amendment but pledged to work on improving using PABs for appropriate projects included Reps. Renacci, Paulsen, Kelly, Schweikert, and Marchant.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell introduced his amendment, which ensures tax relief for every federally declared disaster area, therefore not requiring an act of Congress for each new disaster. He explained that the amendment would be retroactive to 2012 and provide relief for recent victims of hurricanes and wildfires. Pascrell noted that there are still families affected by Hurricane Sandy in 2012 that are not back in their homes, and that selectively choosing relief for victims is “not good policy.” Neal also spoke in support of the amendment, and Thompson entered a written support statement into the record.

Nunes raised a point of order on the amendment because the amendment was not germane. Chairman Brady ruled the amendment not germane because it amends the Social Security Act. Pascrell appealed the order and called for a voice vote.

The motion to table the amendment was agreed to by voice vote, and agreed to in a roll call vote 23-16.

Amendment Offered by Rep. Sewell

Sewell introduced her amendment to restore advance refunding bonds, which she called an “important tool for financing infrastructure and other projects.” Sewell noted that advance refunding allows municipalities to take advantage of refinancing to lower interest rates, allowing taxpayer dollars to be used “as prudently as possible.” Neal spoke in support of the amendment, stating that one of the “most important opportunities at the local level” is what can be accomplished with tax-exempt bonds.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Crowley

Rep. Joseph Crowley (D-N.Y.) explained that his amendment will create a permanent first-time homebuyers tax credit of $8,000, as well as assist military families who receive housing allowances, seniors with fixed income, and Section 8 families. Other Democrats who supported the amendment included Reps. Sewell, Chu, Larson, Neal, and Thompson.

Rice argued that the amendment is “another entitlement” and that Americans instead need more opportunities. He stated that H.R. 1 will give the middle-class more money each year, create more jobs, and stimulate the economy, and that rather than the $8,000 credit the amendment provides, the committee should focus on “onerous banking restrictions” that prevent people from buying homes. Other Republicans who opposed the amendment included Reps. Reichert and Kelly.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Pascrell

Pascrell re-introduced his previous amendment on disaster relief, with the portion deemed germane removed. Pascrell explained his amendment ensures Puerto Rico can receive a full child tax credit, noting that Puerto Ricans pay federal taxes and therefore deserve access to the EITC. Neal stated it was an “important consideration” to supply aid to the people of Puerto Rico. Democrats supporting the amendment included Reps. Larson, Thompson, Sewell, and Davis.

Black spoke in opposition to the amendment, stating that disaster relief should be coordinated, appropriate, and targeted. Kelly also spoke in opposition to the amendment.

The amendment was not agreed to in a 15-24 vote.

Amendment Offered by Rep. DelBene

DelBene explained that her amendment fully repeals the Cadillac tax, as it negatively impacts working families. Reps. Sanchez, Larson, Davis, and Chu supported the amendment.

Kelly opposed the amendment, explaining that it is a “pay for” in the Affordable Care Act,” and that it does not belong in tax reform, but rather a healthcare bill.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Higgins

Higgins did not officially explain his amendment, though he questioned whether H.R. 1 would result in taxpayers receiving $4,000, claiming that the tax cuts will not be what Republicans and administration officials have claimed.

Reichert stated that the amendment is not germane and outside of the committee’s jurisdiction. Acting Chairman Roskam agreed and there was a recorded vote of 22-16 on the ruling.

Amendment Offered by Rep. Doggett

Doggett introduced his amendment, which would restore the alternative minimum tax (AMT) that H.R. 1 repeals. He explained that the Paradise Papers have shown corporations and individuals “stash their millions in offshore tax havens,” and referred to H.R. 1 as a “$157 billion gift to multinational tax dodgers.” Neal supported the amendment, stating that the AMT is “particularly important” and only a small number of taxpayers are subject to it. Kind also voiced his support.

Paulsen stressed that the AMT repeal should be one of the committee’s priorities, calling it an “unfair burden” on “honest taxpayers who are far from wealthy.” Roskam also opposed the amendment.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Levin

Levin explained that his amendment is the same as the 2015 introduced legislation that would “plug” the carried interest loophole, where capital gains tax would be paid rather than a regular tax, stating that the loophole shows the “failure of the system.” Kind supported the amendment.

Holding voiced his opposition to the amendment, explaining that carried interest “rewards entrepreneurism,” encourages long-term investment, and creates jobs, wealth, and economic growth.

The amendment was not agreed to in a 16-24 vote.

Amendment Offered by Rep. Lewis

Lewis introduced his amendment, which would delay the tax cut until American armed forces have withdrawn from wars and there is no longer a federal deficit.

The amendment was not agreed to in a 16-24 vote.

For more information on this markup, please click here.