A substitute amendment to the tax bill planned for Thursday will bring the bill’s deficit impact back down to under $1.5 trillion, House Ways and Means Committee Chairman Kevin Brady said.
That is the total amount the budget reconciliation instructions will allow the tax overhaul bill to add to the deficit over 10 years under Senate rules. The House has some flexibility to ignore the instruction, but Brady has decided to ensure the measure stays on the target with the addition he plans to bring Thursday.
“We are completing an amendment tomorrow that will bring the bill within budget reconciliation,” the Texas Republican said.
The substitute amendment, which will come on the final day of the four-day Ways and Means markup of the tax overhaul, will have to raise roughly $74 billion to get back down to the $1.5 trillion target. That’s not factoring the need to offset $72 billion in off-budget revenue Brady’s bill raises in order for the score to comply with the Senate budget reconciliation rules.
Additional revenue may be needed if Brady decides to incorporate changes that will cost money, like tweaks to small business provisions that would allow more so-called pass-through entities to benefit from the bill’s reduced 25 percent tax rate for some small business income. Brady has acknowledged changes in that area are being considered.
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“We continue to work to improve the small business portions of this. We’ve really had great discussions with NFIB and others,” he said, referring to the National Federation of Independent Businesses, which opposes the bill in its current form.
One revenue source that remains on the table is repeal of the individual mandate, which President Donald Trump and conservative lawmakers have asked tax writers to add to the bill. The Congressional Budget Office released an updated cost estimate of that provision Wednesday, per a request from Brady, showing repeal of the mandate would raise $388 billion over 10 years.
While the getting rid of the mandate cuts a federal revenue source, it means more people are less likely to buy insurance and thus have more income for the government to tax. Its removal also reduces the need for the government to dole out premium tax cut subsidies, making it a net revenue raiser.
Brady said he has not made any decisions yet on whether to add individual mandate repeal to the bill.
“Honestly we’ve got a wide range of options we’re examining within the tax code,” he said. “We’ll have to make changes to get to that $1.5 trillion.”
Paul M. Krawzak contributed to this report.