Congressional Republicans are poised to send their historic package of individual and business tax cuts to President Trump's desk before Christmas and also plan to pass a new stopgap funding bill that could include disaster aid to growers hammered by this year's hurricanes.
The House could vote on the 503-page Tax Cuts and Jobs Act as soon as Tuesday, sending it to the Senate for the final vote. GOP leaders appear to have locked up the necessary majorities in both chambers.
Lawmakers also must reach agreement this week on a stopgap funding bill to keep the government running into January, when GOP leaders hope to pass an omnibus spending bill for the rest of fiscal 2018, which began Oct. 1.
The new continuing resolution, which must be passed before Saturday, is expected to contain a new round of aid to victims of this year's hurricanes, and that assistance is likely to include $1.5 billion to $2.5 billion for Florida citrus growers and other producers, according to a congressional source familiar with development of the bill.
The chairman of the Senate Agriculture Appropriations Subcommittee, John Hoeven, R-N.D., told Agri-Pulse this weekend that details of how the aid would be distributed were still under discussion but that lawmakers are keeping in mind how it would fit with federal crop insurance and the farm bill.
"Figuring out how to do it is a challenge," Hoeven said. There have been concerns that such aid could undermine participation in the federal crop insurance program. Citrus growers say that buyup coverage has been too expensive. Florida officials estimated that Hurricane Irma caused more than $2.5 billion in damage to the state's farmers, including $760 million in citrus losses.
Republican tax negotiators released their sweeping tax-cut package Friday afternoon, expressing confidence that taxpayers and businesses will like the bill once they see its impact on them. The bill contains a number of potential benefits for farms, cutting tax rates on pass-through income, while expanding the Section 179 expensing allowance and doubling the estate tax exemption.
The bill also would preserve farmers’ ability to use the cash accounting method and to expense their interest costs.
“All in-all, for most farmers I would give this tax bill a grade of B,” accountant Paul Neiffer wrote in an analysis of the legislation. “It could have been better, but it is likely better than our current tax laws for most farmers.”
The bill lowers individual tax rates and creates a new 20-percent deduction for pass-through income from sole proprietorships, partnerships and S corporations up to $315,000. Above that level, there are restrictions intended to keep wealthy individuals from using the deduction as a tax shelter.
With help from Hoeven and Sen. John Thune, R-S.D., farmer cooperatives won a key wording change in the final negotiations to offset the loss of their Section 199 deduction, which the bill would repeal as part of the business tax reforms.
The bill “will keep money in the pockets of family farmers across the country at a time when low commodity prices mean that every penny counts,” said Chuck Conner, president of the National Council of Farmer Cooperatives.
The 199 deduction is worth an estimated $2 billion a year, 95 percent of which is passed to co-op members. The rest is retained by co-ops. The final change in the bill would ensure that the new pass-through deduction would offset the value of the Section 199 provision that co-ops have been keeping.
The bill, which would also eliminate the individual health insurance mandate, would increase the budget deficit by nearly $1.5 trillion.
Friday’s looming expiration of the latest FY18 funding measure could be the subject of some brinksmanship before a new continuing resolution is passed. House Republicans were preparing to pass a version that would increase defense spending but extend other spending at existing levels, a non-starter for Senate Democrats, whose votes will be needed to pass a new CR.
But Senate Majority Leader Mitch McConnell, R-Ky., declared flatly last week that the government would not be allowed to shut down.
Also on the congressional to-do list is a tax extenders bill that would revive a series of expired tax benefits, including the $1-a-gallon credit that subsidizes biodiesel. Senate Finance Committee Chairman Charles Grassley, R-Iowa, said the bill would likely make the tax provisions retroactive to the beginning of 2018 and extend them through 2018.
Hoeven said he expected action on an extenders bill to be delayed until early next year.
Here’s a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, Dec. 18
5 p.m. - House Rules Committee meeting to consider rule for the Tax Cuts and Jobs Act, H-313 Capitol.
Tuesday, Dec. 19
10 a.m. - Senate Banking Committee meeting to vote on nominees to the Export-Import Bank, 538 Dirksen.
Wednesday, Dec. 20
10:30 a.m. - Senate Environment and Public Works Committee hearing, “Freight Movement: Assessing Where We Are Now And Where We Need To Go,” 406 Dirksen.
Thursday, Dec. 21
8:30 a.m. - USDA releases Weekly Export Sales report.
Friday, Dec. 22
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