The House of Representatives made one final push for a year-end tax and retirement savings bill, approving a revised bill Dec. 20, just as threats of a partial government shutdown resurfaced.
The full House approved an amended version of the Retirement, Savings, and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018 (H.R. 88, as amended) on a near party-line vote of 220-183. House Republican leaders previously were forced to delay voting on the legislation after realizing they lacked the votes to pass it because many of their members had already left Washington for the weekend or some members were upset that certain provisions had not been included.
The legislation draws heavily from the bipartisan Retirement Enhancement and Savings Act (RESA), as well as the Family Savings Act that was passed by the House in September, including allowing two or more unrelated employers to join a pooled employer plan (an open MEP). It also would expand the areas that would qualify for disaster tax relief, delay implementation of certain so-called Obamacare taxes and make IRS administration and procedural reforms.
Despite the House’s passage of H.R. 88, the legislation stands very little chance of passing in the Senate, as most key Democratic leaders have expressed opposition to many of the proposed tax changes. Moreover, the Joint Committee on Taxation estimates that the legislation would cost $99 billion over the period 2019-2028 under the government’s budget scoring rules, which makes the legislation potentially more unpalatable to congressional Democrats.
Currently, all eyes are on whether there will be a partial government shutdown starting at midnight tonight. (About 75% of the government is funded for FY 2019, including the DOL, but the Treasury, IRS and other several agencies are not.) The Senate on Dec. 19 approved a continuing resolution (CR) providing funding through Feb. 8, but the House on Dec. 20 approved a revised bill adding $5.7 billion for a border wall and nearly $8 billion for disaster relief. That bill will now go back to the Senate for further consideration or amendment. The Senate is expected to take up the legislation later today, but it is not expected to approve it. If that happens, the shutdown is likely to follow.
IRS Overhaul Legislation
The House also on Dec. 20 separately passed bipartisan legislation (H.R. 7227) to overhaul the IRS’ operations and tax administration systems and implement new taxpayer protections. This legislation was first introduced by Rep. Lynn Jenkins (R-KS) and largely pulled from House Ways & Means Committee Chairman Kevin Brady’s year-end legislation. This legislation also stands little chance of enactment in the current session of Congress, due to time constraints and members wanting to depart for the holidays.
Nevertheless, until Congress officially adjourns, anything is possible. As the saying goes, “It ain’t over ’til it’s over.”
Soon-to-be Chairman Neal Weighs in on Tax Priorities
On Dec. 20, House Ways & Means Committee Ranking Member Richie Neal (D-MA) officially became the Chairman-Designate of the Committee for the 116th Congress when it convenes early next year. Neal said he was grateful for his colleagues trusting him with the responsibility and issued a statement highlighting some of his general legislative priorities:
“We must use our majority on the Ways & Means Committee to advance policies that put American families first. I will continue my fight for tax policies that are fair to working families and small businesses. I will work with my colleagues to develop innovative solutions to rebuild our infrastructure needs. And as I have throughout my career, I will oppose efforts to privatize Social Security and slash Medicare and will propose new ways for Americans to save for retirement and access affordable health care. I look forward to helping lead Democrats’ efforts to increase opportunity for the American people and restore the integrity of the federal government.”
As indicated in his statement, Rep. Neal plans to make retirement security legislation a priority. He has long been a champion of retirement policy and late last year introduced two pieces of ambitious legislation that seek to shore up retirement savings.
