High stakes as Senate debates taxes amid shutdown concerns

Source: Geof Koss and George Cahlink, E&E News reporters • Posted: Monday, November 27, 2017

Senate Republicans this week will look to make headway on their top legislative priority of passing tax reform legislation, which would also open part of the Arctic National Wildlife Refuge to oil and gas drilling, even as key fiscal deadlines loom in an already packed agenda.

The Senate Budget Committee will meet tomorrow afternoon to pass the fiscal 2018 budget reconciliation package, completing another procedural step that will allow the tax overhaul to reach the floor later this week.

Under the reconciliation process, the legislation will be subject to 20 hours of debate before a vote that need muster only a simple majority.

With Vice President Mike Pence able to cast tie-breaking votes, Republicans must line up 50 of their 52 members behind the bill. President Trump will attempt to rally support with a visit tomorrow to Senate Republicans’ weekly policy lunch.

Senate Republican Conference Chairman John Thune of South Dakota predicted yesterday that his party will be able to pass the bill.

“I think that in the end — we have members who are expressing what are legitimate concerns, who are — have ideas about how to make the bill stronger and better,” he said on “Fox News Sunday.” “And we’re certainly open to those. And we’re going to have an open process on the floor of the United States Senate where people can offer amendments.

“Those amendments can get debated and voted upon. So it will be … plenty of opportunities to change the bill in the direction that some of our senators want to see.”

Floor debate could provide an opening for discussion on the nearly two dozen energy-related amendments filed during the Finance Committee hearing before the Thanksgiving break (E&E Daily, Nov. 14).

The Senate tax bill would largely uphold the status quo on energy provisions of the tax code, while the House-passed bill includes extensions for “orphaned” renewable sectors and a key nuclear break.

Senate Republicans have suggested that a separate tax extenders bill could later address disputed energy incentives, including the wind production tax credit, which would see its value slashed in the House tax proposal (E&E Daily, Nov. 3).

While energy amendments may fall by the wayside on the Senate floor, there will be plenty of heated debate over the tax bill’s ANWR provisions.

Critics of the bill, including environmentalists, are appealing to GOP deficit hawks, including Tennessee’s Bob Corker and Arizona’s Jeff Flake, as they look to defeat the bill (Greenwire, Nov. 22).

The liberal Center for American Progress last week unveiled an analysis showing that the Senate tax bill could force an end to popular state mineral leasing payments — including from new ANWR drilling — which are among the programs threatened by automatic sequestration cuts by new deficit projections.

Senate Republicans made the already-heavy political lift of tax reform heavier by adding a repeal of the individual mandate for health insurance in the Affordable Care Act to the bill in committee.

While Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) helped tank the GOP effort to repeal that law earlier this year, she indicated last week that she supports scraping the individual mandate in the tax bill.

Republicans are especially anxious to deliver a legislative win on their stalled agenda before the end of the year, although conferencing with the House on taxes is expected to push final enactment into next year.

“We need to get this accomplishment,” Thune said yesterday. “This is a goal that we’ve had for a long time. If we want to get the economy growing at a faster rate, creating better-paying jobs, raising wages in this country, we need to get this tax bill across the finish line.”

Spending pressure

Aside from taxes, lawmakers will spend the rest of the year sparring over fiscal 2018 funding for federal agencies. Congress has a Dec. 8 deadline for reaching at least a short-term spending accord, or agencies will be forced to shut down.

Lawmakers set that deadline in September and approved temporary appropriations when they failed to have any new funding in place when the new fiscal year began Oct. 1. Trump is expected to meet with congressional leaders from both parties tomorrow afternoon to discuss spending issues.

Both sides agree they want to avoid a politically treacherous government shutdown, but it’s doubtful they’ll reach a final deal during the next two weeks. Tax legislation has crowded out work on appropriations.

As a result, Congress is likely to pass another stopgap measure until around Dec. 21 to give members extra time to assemble a final, massive omnibus package. Most members would prefer that the funding issue be wrapped up before Congress adjourns for the holidays rather than spilling into 2018.

Appropriators are expected to begin hammering out details of the package this week when leaders reach an accord on discretionary spending levels for the coming year. It’s expected to top $1 trillion, but how that would be split between defense and other domestic accounts is unresolved.

As it stands now, the House is pushing for increases in defense spending at the expense of domestic accounts. The Senate has called for more modest military increases with largely flat funding for domestic programs.

Leaders in both chambers are hoping to reach a bipartisan deal on spending that would raise caps for both domestic and defense accounts for two years.

Any deal, however, could be complicated by a push to also address an expiring program that allows people who came to the United States illegally as children to stay in the country.