Legislative Tensions Rise as Congress Races Toward Reconciliation Deadline

As Congress hurtles towards a Memorial Day deadline to bring the reconciliation bill to the floor, cracks have started to form in the legislative process when it comes to priorities.  This week, the House Ways and Means Committee and the House Energy and Congress Committee finished their markups of their respective pieces.  As with many legislative actions, there tends to be some discrepancies, especially when it comes to areas of the federal government that influence our industry. 
 

Speaker Mike Johnson (R-LA) and his leadership team are working arduously to make sure Republicans are on the same page with the bill as critical legislative actions move forward.  Republican Members from blue states, especially New York, are looking for a major increase in SALT (State and Local Tax) deductions.  As part of the 2017 Tax Cut and Jobs Act, SALT deductions were capped at $10,000.  In the current version of the reconciliation bill, the SALT deduction is increased to $30,000 with a cap of $200,000 individual/$400,000 for joint filers.  The SALT Caucus is looking for something more in line with $60,000 and no income limit.  SALT supporters could stop the bill if they want, so some agreement will need to be in place before the bill can move forward.
 

It also appears that both the Energy Star and WaterSense programs will not survive past September 30.  Energy Star is an efficiency program established by President George H.W. Bush’s administration and is part of both the Department of Energy (DOE) and the Environmental Protection Agency (EPA).  WaterSense focuses on water efficiency and resides within EPA.  There are efforts to protect both programs and possibly transferring Energy Star in its entirety to DOE to ensure its survival.
 

Most of what the White House was looking for including no tax on tips, overtime, and Social Security (which has become a $4,000 deduction for seniors) should remain in the bill.  The TCJA would be extended in this legislation, but there are a lot of negotiations to come though the weekend before we have a clearer picture.