Tax Legislation
Author: Bill McDevitt, CPA, CVA
How Can You Pass Tax Legislation Without 60 Votes in the Senate?
Normally, the Senate needs 60 votes to pass tax legislation. However, the budget reconciliation process requires only a simple majority.
The following are the basic aspects of the budget reconciliation process:
Step 1: Congress passes a budget resolution. This resolution instructs House and Senate committees to write parts of the bill and how much to change spending or revenue. In other words, limits are set on the bill’s cost over a period, usually ten years.
Step 2: Committees write a bill that follows the instructions in the budget resolution.
Step 3: Committees mark up their bills. This is where the horse-trading happens. Often, there are more things that Congress wants to do than there is room in the budget resolution.
Step 4: The committee bills are packaged into a single reconciliation package. One in the House passes with a simple majority (as usual), and one in the Senate also passes with a simple majority (rather than the normal 60 votes).
Step 5: If we have two different reconciliation packages, what happens now? There will be more horse-trading until there is a single reconciliation bill.
Step 6: Both the full House and Senate must vote again to approve the reconciliation bill.
Step 7: The bill is signed into law by the President.
Because of the thin majorities in both the House and the Senate, just a few members can hold the progress hostage, until they get what they want. It will be interesting to watch. We will do our best to keep you up to date with this WG Tax Legislation Watch blog. At this point, if you are as old as me, you may be hearing the Schoolhouse Rock song “I’m Just a Bill” in your head. I know that I am.
For a more detailed analyisis of the budget reconciliation process, click here.
If you have questions or require additional information, please contact your WG advisor.
President Trump met with House GOP
Trump met with House GOP leadership yesterday. The stated goal of the House is to outline the main points of the bill by the end of the day today. Hold hearings next week and pass the legislation in April. Ambitious goals… Senate leadership is meeting with the President at Mar-a-Lago today. The Senate has stated that they first want to pass legislation to fund Trump’s deportation plan and complete the border wall. The Senate plans to take up tax legislation later this year.
Questions? Ask a WG Advisor
Bill McDevitt
CPA, CVA
This blog is intended to provide general information on potential tax law changes under consideration in Washington. The topics discussed reflect legislative proposals and ongoing developments; however, not all provisions may ultimately be enacted into law. There is no guarantee regarding the final content, timing, or passage of any tax legislation. The information presented should not be relied upon as tax, legal, or financial advice. For guidance on how potential changes may impact your specific situation, consult with a qualified tax professional.
