- President Donald Trump and Republicans want to get their tax plan passed by the end of the year.
- The window is closing quickly, with under 30 days left in the legislative calendar.
- Many analysts think such a feat is nearly impossible.
Gary Cohn, the director of the National Economic Council and President Donald Trump’s top economic adviser, wants tax reform done this year.
“It’s really ambitious, and I think it’s really possible, and I think it’s really essential,” Cohn said at an American Bankers Association meeting Monday. “I think we have a unique window in time right now, but unfortunately, we keep losing days to this window.”
He added: “The opportunity is now.”
While pressure is mounting on Congress to pass a tax package, the calendar shows dwindling opportunity before the calendar flips to 2018 — with the House out for the week, 28 days remain on the 2017 legislative calendar in which both chambers are scheduled to be in Washington at the same time.
Analysts say, however, that getting a plan to overhaul the US tax code through Congress this year simply isn’t going to happen.
“The idea of getting tax reform done this year is a farcical fantasy,” Isaac Boltansky, an analyst at the research firm Compass Point, told Business Insider. “Lawmakers have neither the time nor the capacity to formulate and clear a tax reform package in 2017.”
The so-called Big Six tax negotiators and Trump unveiled a nine-page unified framework late last month, though they still must agree on finalized tax legislation, take that through committees in both the House and the Senate, pass bills through both chambers, and settle any differences between the two bills.
Already some substantial policy cracks are opening up within the Republican Party on the push — including on the possible elimination of the state and local tax deduction and on the amount the plan would add to the federal deficit.
And since the party plans to use budget reconciliation to preempt a filibuster from Democrats in the Senate, the chamber first needs to pass a budget resolution and either get that through the House as is or work with the House to reconcile the differences between their separate budgets.
Greg Valliere, the chief global strategist at Horizon Investments, said Republicans could spin passing a budget as progress toward tax reform. But he said that getting everything finished this year was unlikely.
“They first have to agree on a budget — House-Senate conference committee may not iron that out till early November,” Valliere said in an email. “Obviously not enough time to enact a tax bill, but the spin will be that there’s progress — true — and a bill can pass by the end of the winter — probably true.”
Brian Gardner, the director of Washington research at Keefe, Bruyette & Woods, said the timeline for the House might be shorter — and that since it already passed its budget resolution has a larger margin for error with votes, it could make the deadline.
“Assuming the budget resolution is finished by late October/early November, we expect the House will pass a tax bill by year-end 2017,” Gardner said in a note to clients. “We expect the Senate will move slower and may not vote on a tax bill until early 2018. Under what we consider a best-case scenario, tax legislation could be finished in the first half (probably the second quarter) of 2018.”
But Congress is also running up against a slew of other deadlines that could complicate progress on tax reform. For one, it must address the expiration of federal funding in December to avoid a government shutdown.
“At this point, the real conversation should focus on whether there can be sufficient progress this year to set the stage for action next year,” Boltansky said. “A tax package in this Congress is still possible, but with each passing day — and each new distraction — it becomes less probable.”
Source: Investing.com
