In This Week's Edition of Snapshot…
- Tax Reform Update: Senate begins debate on health care, tax reform continues moving forward
- Update on Treasury personnel
- President Trump issues EO for Commerce Department
- In the States: State budgets remain in flux, NYC arts funding plan to promote diversity
- Johnson Amendment is subject of blog post
In the coming months, we will provide weekly updates with new developments in the tax reform process.
On Tuesday, the Senate voted to begin debate on a health care bill — despite not knowing which version of the health care bill they would be debating. There have been two main options on the table thus far: the Better Care Reconciliation Act (BCRA) — which would repeal core elements of the current law under Obamacare and phase out state Medicaid expansion, and the “repeal now, replace later” version of the bill—which passed both chambers of Congress in 2015, but was vetoed by then-President Barack Obama.
A third option, which has emerged on the floor of the Senate since GOP leaders have not yet been able to secure enough support for one of the aforementioned plans, is what is being referred to as a “skinny repeal.” At its core, this option would eliminate both the individual and employer insurance requirements, in addition to a tax on medical-device manufacturers (with the potential for incorporating additional amendments offered by Senators). If the Senate can pass a “skinny repeal,” it buys Congress more time to work across chambers and reconcile the differences between the versions of health care bills passed in the House and Senate — extending the process beyond the upcoming congressional recess into the fall.
Senate Majority Leader Mitch McConnell (R-KY) already delayed the start of August recess for Senators by two weeks in hopes of voting on health care legislation before lawmakers return to their states. The timing of this vote on health care continues to be a major factor in the timing of tax reform, given that Republicans intend to use the process of reconciliation with the fiscal year (FY) 2018 budget to pass overhaul the tax code. The budget resolution that will produce the reconciliation instructions for this process is expected to be put up for a vote in September, according to Republican Study Committee Chairman Mark Walker (R-NC).
In other big tax reform news, House Speaker Paul Ryan (R-WI) announced at an event on Tuesday that the “Big 6” tax reform group intends to release a set of principles that will outline the GOP approach to tax reform as early as today. The group — which includes Speaker Ryan, House Ways and Means Chairman Kevin Brady (R-TX), Senate Majority Leader McConnell, Senate Finance Committee Chairman Orrin Hatch (R-UT), U.S. Treasury Secretary Steven Mnuchin, and White House National Economic Director Gary Cohn — hopes that releasing this messaging document just before the August recess will help build and maintain momentum on tax reform until Congress reconvenes in September.
Last week, the Senate Finance Committee voted unanimously to advance David Kautter—President Trump’s nominee to be the Assistant Secretary for Tax Policy at the U.S. Treasury Department. According to Chairman Orrin Hatch’s (R-UT) statement, “The Treasury Assistant Secretary for Tax Policy is a critical role as Congress and the administration work to overhaul the nation’s tax system. David Kautter’s experience and knowledge will serve the nation well as we work to unite on comprehensive tax reform. I am hopeful the full Senate will put politics aside and swiftly confirm his nomination.”
Kautter, if and when he is confirmed, will be a key player in the tax code overhaul Congress and the White House are trying to pass this year. Additionally, POLITICO Pro Tax Whiteboard reported yesterday that Kautter and the tax reform effort have quietly gotten help. Whiteboard reported that Dana Trier has been appointed as the deputy assistant secretary for tax policy at Treasury and began serving on July 10. He is the number two person in the tax policy office.
Last Wednesday, President Trump signed an executive order to establish “in the Department of Commerce the Presidential Advisory Council on Infrastructure…” According to BroadbandUSA, “The order calls for a council of 15 members who will be appointed by the President and will represent the interests of the following industries: real estate, finance, construction, communications and technology, transportation and logistics, labor, environmental policy, regional/local economic development and others determined by the President to be pertinent to the discussion.”
The goal of the Council is to research and make recommendations to the President in areas such as infrastructure projects and funding for the federal government.
Exclusive from our colleagues at the National Council of Nonprofits.
State Budgets Remain in Flux
Four weeks into the state fiscal year, many states continue to struggle to balance revenues with spending plans. One reason for the challenge is that state income tax receipts for April 2017 declined by four percent over the previous year, with tax declines largest in the New England and Mid-Atlantic states, according to a new report from the Rockefeller Institute of Government.
In Connecticut, where the Governor, House, and Senate continue to offer conflicting proposals, nonprofits are engaging in days of advocacy, dubbed #ForAllofUs, to draw attention to how spending cuts are affecting individuals in legislative districts. Pennsylvania Governor Wolf is allowing a $32 billion budget to go into effect without his signature, but also without a plan in place to pay for it — thus averting a government shutdown but not a fiscal reckoning.
Other states are not without their own challenges. Illinois’ Comptroller is warning that despite the formal end of the state’s budget stalemate — which includes higher taxes and expected increased revenue to state coffers — there is no quick fix for eliminating the pile of unpaid bills to nonprofits and others that total nearly $14.5 billion. Louisiana is also at risk of revenue shortfalls, causing the state’s Bond Commission to start the process for borrowing up to $500 million in anticipation of the state government needing the money.
NYC Arts Funding Plan to Promote Diversity
New York City Mayor De Blasio will use increased cultural funding to promote diversity among arts audiences and workforces, according to the new CreateNYC cultural plan released last week. Under the plan, the City will consider diversity among board members and staff, and an organization’s plans to boost diversity, as factors in a competitive grant process that provides funding to almost 1,000 museums and organizations, the Daily News reports. “If we are going to continue to live up to that title [of ‘the world capital of art and culture’] we must use every tool we have to ensure that every resident, in every neighborhood, has the same access to cultural opportunities,” Mayor De Blasio said in announcing the plan. “CreateNYC is the first comprehensive roadmap to lifting up arts and culture across the city — now it’s time to roll up our sleeves and get to work." See the news release for more information.
In a recent post on the blog “Nonprofit = Awesomely Fun!,” writer Vu Le tackled the issue of the “Johnson Amendment” — a prohibition of charitable 501(c)(3) organizations from participating in, or intervening in (including the publishing and distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. Vu writes, “But, as boring as the Johnson Amendment is, it has served our community well for over 60 years, and now it is being threatened. Our sector and the people we serve could be seriously screwed if we don’t do something now. So I am asking you … to sign this letter if you haven’t.”
The letter, which the Council has signed and urges all of our members to sign if they have not yet done so, currently has over 4,800 signatories from across the country and has been shared with every member of Congress.