House Republicans will try again this week to pass a year-end package of tax cuts after revamping the measure a second time to win broader political support.
The latest version of the bill restores an extension of two expired tax breaks: one for a biodiesel tax credit and another for a railroad track maintenance credit. The biodiesel credit, which would be extended and then phased out by 2024, was a particular priority for Sen. Charles E. Grassley of Iowa, the likely chairman next year of the Senate Finance Committee.
The House Rules Committee plans to act on the bill Wednesday, a move that could clear the way for a floor vote as early as Thursday. But there was no guarantee of a floor vote in an already turbulent year-end calendar amid concerns of lame-duck lawmakers fleeing the Capitol prematurely.
And with the clock ticking toward a partial government shutdown starting Saturday morning, it might find itself the vehicle for whatever end-game appropriations parliamentary maneuvers are needed.
House leaders scrapped plans to vote on an earlier version of the tax bill late last month after concerns grew that it may lack enough support to pass. Democrats oppose the measure partly because it attempts to correct flaws in last year’s Republican tax code overhaul that they want to rewrite.
And some Republicans were troubled by an extension of an excise tax on coal, which has since been struck from the bill. The bill also would revamp the IRS, provide expanded tax breaks for retirement savings, delay some health-care taxes, and offer temporary tax relief to wildfire and hurricane victims, among other things.
But each rewrite of the bill has increased its price tag. The initial bill was estimated to cost $54.1 billion over 10 years, according to the Joint Committee on Taxation, the official scorekeeper. House Ways and Means Chairman Kevin Brady of Texas estimated a revamped version from earlier this month would have cost $80 billion over 10 years.
And that was before Brady restored extensions for the biodiesel and railroad industries in the latest rewrite, estimated to cost a combined $18.8 billion over a decade, according to the JCT.
The measure would renew the $1.00 per gallon biodiesel credit, which lapsed at the start of this year, through 2021, and then phase it out over the following three years, making up the bulk of the new costs. The track maintenance credit for short-line and regional railroads, which also enjoys broad bipartisan support, would be made permanent but is cut from 50 percent of qualified expenses to 30 percent. Another two dozen or so “extenders” that expired after 2017 wouldn’t be renewed, however.
The bill also includes what might be considered a parting gift for retiring House Speaker Paul D. Ryan and other departing lawmakers. It includes a provision, first sought by Ryan over a decade ago, that would give taxpayers a charitable deduction for making donations to college fraternities and sororities for housing improvements.
House Rules Chairman Pete Sessions of Texas introduced the measure as standalone legislation earlier this year before getting it incorporated into Brady’s tax bill. Sessions, an 11-term incumbent and a major player on nearly every big piece of legislation that goes to the floor, was defeated for re-election in his Dallas-area district by Democratic Rep.-elect. Colin Allred, a former professional football player.
The tax bill faces an uncertain future in the Senate, even if it can pass the House. Democrats in both chambers have criticized proposed fixes to the 2017 tax law, which they want to thoroughly scrub next year, as well as other provisions like enabling churches and other charitable organizations to keep their tax-exempt status even if they endorse political candidates.
But senators could simply use the measure as a “shell,” substituting their own bipartisan tax provisions and potentially appropriations language to avert a partial government shutdown when current stopgap funding lapses Friday.