Senate Majority Leader Mitch McConnell (R-KY) has every reason to smile. In the wee morning hours of Dec. 2, the Senate passed, 51-49, the Tax Cuts and Jobs Act (H.R. 1). Every Democrat voted against the bill. They were joined by Sen. Bob Corker (R-TN), the lone Republican dissenter.

Despite having filed hundreds of amendments, senators voted on only eight of those measures; and out of the eight, only three were adopted:

  • Cruz #1852 – an amendment that would allow 529 savings plans to be used for elementary and secondary education, including tuition expenses at public, private, or religious schools.
  • Merkley #1856 – an amendment that would repeal an exception to the endowment tax.
  • Hatch-Murkowski #1618 (as amended) – this is the substitute amendment to H.R. 1, containing the full text of the Senate’s Tax Cuts and Jobs Act, as amended.

KEY MODIFICATIONS TO THE SENATE TAX BILL

On the evening of Dec. 1, Senate Majority Leader Mitch McConnell directly incorporated a series of GOP amendments into the tax bill. A copy of the modified bill that was being circulated just before the final vote contained several handwritten changes and strike outs.

Here are some of the GOP’s last-minute changes to the Senate tax bill:

  • Increase the repatriation rates to 14.5% (cash) and 7.5% (non-cash)
  • Raise the pass-through deduction from 17.4% to 23%
  • Reinstate the corporate AMT
  • Reinstate the individual AMT but raise the exemption amounts
  • Maintain the state and local tax deduction for property tax – up to $10,000
  • Extend and phase down 100% immediate expensing after 5 years. The phase-down schedule is as follows: 80%, 60%, 40%, 20%
  • Maintain medical expense deduction and revert to a 7.5% threshold for 2 years
  • Eliminate many of the tax administration provisions that were in the original bill

An official copy of the Senate tax bill, as amended and passed, can be viewed here.

Based on the Dec. 1 estimate by the Joint Committee on Taxation, the Senate bill would add about $1.45 trillion to the deficit.

SIDE-BY-SIDE: HOUSE AND SENATE TAX BILLS

The House and Senate are expected to go to conference this week for the Tax Cuts and Jobs Act (H.R. 1). The purpose of the conference is to resolve the differences between the House and Senate bills.

On Dec. 4, House leaders named the following lawmakers to serve on the House-Senate conference committee for H.R.1:

Click here to view the table.

GOVERNMENT FUNDING

Congress must pass a spending bill by Dec. 8 to avoid a government shutdown. House Republicans have introduced a short-term funding patch (so-called “CR”) that runs through Dec. 22 to give lawmakers more time to come to an agreement to fund the rest of the fiscal year.

Members of the House Freedom Caucus are pushing Speaker Paul Ryan to extend the CR through Dec. 30 because they do not believe that a two-week extension would give Republicans enough time to secure a favorable spending deal.

The House Rules Committee has postponed taking action on the CR until the GOP can come to an agreement on the duration of the CR. Despite this, the House is expected to vote on the CR this Thursday. The CR also currently includes language to provide temporary funding for the Children’s Health Insurance Program.