Republicans in the House and Senate will begin hammering out a compromise on each chamber’s respective tax reform plans next week and will also face a potential showdown with Democrats on legislation to temporarily fund the government.
The House will vote Monday on a resolution to go to conference with the Senate so lawmakers can come up with a bill that melds both tax measures.
The Senate passed a $1.4 trillion tax cut measure late Friday. The House passed a tax bill on Nov. 16. Neither measure received any support from Democrats.
Republicans are pushing to send a tax bill to the president’s desk before the end of the year.
The two bills are very similar, but House lawmakers are refusing to simply endorse the Senate bill and will seek changes in conference, including additional allowances for state and local tax deductions that are not included in either bill.
The Senate bill includes a provision to repeal Obamacare’s individual mandate by eliminating the fee charged to those who do not purchase health insurance plans. The mandate repeal could prove to be a major sticking point.
Many House Republicans don’t want to mix tax reform with healthcare reform and fear the elimination of the mandate will raise premiums. The deal hinges on the Senate passing additional legislation to shore up Obamacare subsidies, which is a move many House Republicans oppose.
The Senate tax bill also maintains the estate tax, which the House phases out. And, House Republicans oppose the Senate plan to delay until 2019 the plan to reduce corporate taxes to 20 percent.
While lawmakers work behind the scenes on final tax legislation, both chambers must pass spending legislation by Dec. 8, when current government funding expires.
Appropriators are readying a two-week spending bill, which they believe will provide enough time to write another spending bill that would last until the end of the fiscal year.
Democrats, angry that year-end spending legislation will exclude immigration legislation they are seeking, are threatening to oppose the government funding legislation — although it is not clear whether they will try to block the two-week extension.
The Senate GOP controls only 52 votes and needs the help of Democrats to pass the legislation.
“We will pass a short-term CR that is necessary to keep the government open, to keep talks going,” on a long-term bill, said House Speaker Paul Ryan, R-Wis. “Hopefully, people will decide to participate in these talks. And if the Senate Democrats choose to filibuster that, then they will have chosen to shut the government down, something that we do not want to see happen.”