Last Monday and Thursday the House Ways and Means Committee acted on a second package of tax cuts. The bills were introduced on Tuesday and passed in Committee on Thursday.
Committee Chairman, Congressman Kevin Brady (R-TX) announced the unveiling of “Tax Reform 2.0.” The package includes three bills: H.R. 6760, H.R. 6757 and H.R. 6756. The bills would make the middle class and small business portions of the tax bill permanent.
In announcing the bills, Brady said:
“We are providing certainty. The Protecting Family and Small Business Tax Cuts Act locks in the tax relief from the Tax Cuts and Jobs Act – which included a nearly doubled standard deduction, a doubled Child Tax Credit, lower rates across the board, and a historic 20-percent pass-through deduction for Main Street businesses. This will create over 1.5 million new jobs, continue to raise wages, and boost long-run GDP.”
If enacted, the package is certain to increase the budget deficit even further. Legislation in Congress is scored or calculated by the Congressional Budget Office (CBO) on its costs over a five year and ten year window. The December tax package allowed some non-business parts of the law to expire before ten years. That meant the official costs of the legislation was reduced even if supporters hope or expect the provisions to continue.
CBO has projected deficits to exceed $1 trillion in FY 2019, well above the $665 billion in 2017. There are two drivers the tax cut package and the spending deal from last February with the tax package the bigger driver of the deficit. The deficit has reached $895 billion through August of this year (the first 11 months of the fiscal year).
If the House where to take up another tax package it would have to wait until after the election with members eager to get back to their districts before the November elections.
