GOP Tax Bill Passes / by Joe Furia

Debbie Johnston, Senior Vice President of Policy Development

Congress voted Wednesday to approve the conference report for the Tax Cuts and Jobs Act after removing several provisions that did not comply with budget reconciliation rules. The House then reapproved the bill. The conference report maintains tax-exemption for private-activity bonds and medical expense deductions. It also repeals the Affordable Care Act’s individual mandate to purchase health insurance; changes the way organizations can deduct interest expense on their debt; repeals the exclusion from gross income for interest on advance refunding bonds; and creates a 21 percent excise tax on certain executive compensation, among other provisions.

The $1.5 trillion measure as written also could trigger automatic, offsetting spending cuts under the Pay-As-You-Go Act of 2010, commonly known as "pay-go." Industry experts have said this could lead to $136 billion in automatic spending cuts in FFY 2018, including $25 billion in cuts to Medicare spending, $900 million to the Prevention and Public Health Fund, and $715 million to the Federal Hospital Insurance Trust Fund.

In related news, Senate Republicans scrapped plans to include a pair of bipartisan bills to shore up the Obamacare exchanges in a stopgap government funding measure as lawmakers scramble to avoid a shutdown this week. GOP supporters of the Obamacare fixes - Sens. Susan Collins of Maine and Lamar Alexander of Tennessee - now hope to move the measures when Congress considers must-pass bills in January.