Ways & Means Republicans to Discuss Tax Reform Details
Chairman of the Ways and Means Committee Kevin Brady (R-TX) announced that he will hold a two-day meeting next week (likely December 14 – 15) with committee Republicans to discuss some specific “decision points on tax reform and healthcare.”
As we mentioned last week, tax reform legislation is expected to move swiftly once the 115th Congress begins session next year — ideally, with a bill ready for markup by Ways & Means by early March.
University Endowments Targeted in New Proposal
This Monday, Ways & Means Committee member, and Vice Chair of President-elect Donald Trump’s transition team, Tom Reed (R-NY), unveiled a plan to make college tuition more affordable by placing new management and spending requirements on college and university endowments. Though the plan lays out a multi-prong approach for achieving this, the target of endowments is the primary focus.
The first proposed course of action hinges on the Congressman’s forthcoming Reducing Excessive Debt and Unfair Costs of Education (REDUCE) Act bill—which would require schools with endowments larger than $1 billion to use at least 25% of their annual investment income for reducing cost of attendance for “students who often fail to qualify for grants or federal aid due to their families’ income levels.” If such schools fail to meet this requirement, they would face an immediate 30% tax on investment income with the possibility of a 100% tax if violations are not corrected under the vision for this bill.
The proposal also cites a requirement for increased transparency under the pending introduction of a bill for the Accountability of College Costs through Exposing School Spending (ACCESS) Act—which would mandate schools to report spending information above and beyond what is currently required by the Form 990 (though it is unclear exactly what additional information would be required), as well as salary information for Presidents, Athletic Directors, investment advisors, and other top college administrators.
Lastly, the plan alludes to an incentive-structure for schools that “follow their cost-containment plans and take proactive measures to reign in outrageous, excessive, and unnecessary costs” under the College Affordability and Innovation Act of 2015 (H.R.2537; incorrectly cited in the PDF of the plan). Furthermore, this bill would penalize schools that are not compliant with the standards outlined under this plan by retracting a percentage of the Title IV funds for Federal Pell Grants and Perkins Loans that the schools receives.
This type of regulation on endowments is very concerning. Though this scrutiny is contained to colleges and universities for now, foundation endowments are not immune to extension of this same logic. The Council continues to work diligently to educate policymakers about the value of charitable endowments for building and strengthening communities around the country.
House to Consider Spending Bill as Early as Today
House GOP leaders announced a spending deal this week that would fund the federal government through April 28th of next year—which would provide the incoming Trump Administration the opportunity to engage in negotiations for a longer-term spending plan next spring.
The deal would maintain current spending levels at $1.07 trillion, with slight increases in spending for the Department of Defense and State Department ($8 billion), aid for contaminated water crises—like that in Flint, MI ($170 million), flood relief ($4.1 billion), and for medical research and state grants to address the opioid epidemic ($872 million).
The House is expected to take up the deal as early as today, and hopes to clear it through the Senate by Friday’s deadline. Some Democrats, however, have raised concerns with a non-spending provision in the bill that would loosen restrictions for retired military members to serve as political appointees—which is intended to ease the confirmation process of General James Mattis, whom President-elect Trump has nominated as Secretary of Defense.
Massachusetts Congressman Chosen as Ways & Means Ranking Member
Late last week, Ways and Means Democrats unanimously chose Richard Neal (D-MA) to succeed Sander Levin (D-MI) as Ranking Member of the committee.
Mr. Neal stated his intent to “defend the principles of Medicare and social security,” while investing in a “pro-growth strategy.” The Council has been engaging with all members of the Ways and Means committee as we move toward tax reform, and we will continue to engage with Mr. Neal’s office in his new role.
FATF Reviews U.S. Framework for Anti-Laundering & Counter-Terrorism
On December 1, the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG) released their fourth mutual evaluation of the United States anti-money laundering and counter-terrorist financing framework. The report analyzes the United States’ level of compliance with FATF Recommendations, the effectiveness of its anti-money laundering and counter-terrorist financing measures, and makes recommendations on how the U.S. system could be strengthened.
While the report largely finds the U.S. compliant with FATF recommendations related to charity and philanthropy, it offers a set of priority actions for the U.S to undertake that do not reflect the recent change to FATF’s Recommendation 8 for nonprofit organizations, which was revised this past June. For more information, visit the Council’s blog.
Exclusive from our colleagues at the National Council of Nonprofits.
Paid Leave on Policy Agendas
The District of Columbia could mandate the most generous paid family leave benefit in the country if the City Council approves a measure under active consideration. The legislation provides workers up to 11 weeks of pay for a child’s birth, adoption, or placement of a foster child, and eight weeks to care for a family member. Employees would be eligible to receive up to 90 percent of their weekly pay (capped at $1,000/week). Employers would see an increase of .62 percent in payroll taxes to pay for the benefit. The final vote on the bill is schedule for the week of December 19.
Maryland’s Governor announced plans this week to propose legislation requiring employers with 50 or more workers to offer paid sick leave of at least 40 hours each year. The plan calls for tax incentives for smaller employers to adopt paid leave benefits. Earlier this year the Legislature failed to enact a more comprehensive paid sick leave that was opposed by the Governor and the business community.
Minimum Wage Varies Widely Across the Country
To the question “what’s the current minimum wage these days,” it matters more where you are, and when you ask the question, than any form of coherent policy analysis.
Currently, 28 states apply hourly minimum wage rates that are higher than the federally set rate of $7.25 per hour, a level that Congress has not adjusted since 2009. In 19 of those states, the minimum wage is going up on or before New Year’s Day 2017. Among the new rates, Missouri will see the smallest adjustment, from $7.65/hour to $7.70/hour. Massachusetts and Washington State will reach the highest statewide minimum wage rate in the country of $11.00 per hour, effective January 1. Thanks to a ballot measure passed by voters on Election Day, Arizona employees will see the biggest jump in the minimum wage, from $8.05 to $10.00 per hour.
A full listing of current state minimum wage rates can be found on the U.S. Department of Labor website. The firm Nonprofit HR has compiled a helpful chart, 2017 Minimum Wage Information, identifying upcoming state-law changes. And the National Employment Law Project provides a useful list of differing minimum wage rates in four dozen local jurisdictions, from Seattle and Los Angeles to New York City and Washington, DC.