
The House yesterday passed "The Tax Cuts and Jobs Act" by a 22-vote margin among the 432 elected U.S. Representatives.
Too, the Senate's own version of tax reform cleared the Finance Committee yesterday on a party lines vote of 14 to 12.
The expectation now is that, even in the whirlwind rush of political necessity for "a win," Senate majority leader Mitch McConnell will not likely force the Senate measure to a vote on the floor during a Thanksgiving-shortened week next week.
Instead, lawmakers will head home to their families, friends, and constituents for the Thanksgiving holiday.
Who knows what those lawmakers may hear during the break, and whether what they hear from voters on their home turf about how their $1.5 trillion or so calculus experiment will impact them?
Many of those voters were not around the last time the nation--and stakeholders in housing--endured so intense a cauldron of uncertainty around federal support for programs they depend on. The Tax Reform Act of 1986, considered by many on either side of it to be a most brutal affair, proved out then Speaker of the House Tip O'Neill's most famous assertion, "All politics is local."
Fact is that while the House and Senate bills have each taken on traits of unstoppable juggernauts, there'll likely be many twists and turns before a single measure will--if it even can--reach the President's desk before the Christmas holiday break as he insists.
So, have a look at what National Association of Home Builders Chairman Granger MacDonald has to say about the House bill that passed yesterday, consider where you stand on whether the calculus--which will likely impact both what you take home as businessmen and women operating large and small firms, as well as the means by which people can or can not become home buying customers or access affordable rental housing--and act.
“The Tax Cuts and Jobs Act is a bad deal for hard-working American families. It provides a huge windfall to major corporations paid for in large part by millions of working class home owners, who will see their housing tax incentives severely diminished. The bill effectively renders mortgage interest and property tax deductions unusable for middle class home buyers and home owners. By threatening the value of the largest asset held by most Americans, these changes will hurt the middle class by lowering household wealth.
“The House bill also severely diminishes the effectiveness of the Low-Income Housing Tax Credit (LIHTC), which is essential to spur the production and rehabilitation of affordable rental housing. With the nation already in the midst of an affordability crisis, undermining the LIHTC will deal a crippling blow to keep housing affordable and available for those citizens who are most in need. And the bill will make it far more difficult for small businesses to compete and thrive because it disproportionately benefits corporations.
Contact your elected Representatives and Senator(s), and let them know where you stand on these bills.
There are at least three major and critical milestones to go in the process.
- One is a vote by the full Senate on its tax reform bill, which differs dramatically on many issues from the House bill.
- Second would be a reconciliation of the two measures in conference committee of the two branches of Congress. This is by no means a given, especially if the Senate bill barely passes by a vote or two, and insists that the House accept its bill whole. Each bill's set of differences reflect compromises regarded as non-negotiable in order to secure voting blocks of various members; if any of those get cut from either measure, it could cost lost support from some member block or other.
- Third would be transition rules, a critical set of timelines and dates for all of the mechanics and changes in Tax Reform law to become fully effective.
While it is too early to be fully focused on going public with transition rule compromises, it is not too early for organizations to strategize on best, middle, and worst-case scenarios to prepare and position themselves for effective dates ahead.
The big issue now is to let Representatives and Senators know, loud and clear, where you stand on their positions on tax reform legislation, and how that will impact your support for their incumbency in midterm elections next year and two years later.
Housing's business community and culture have a voice, and now is the moment to use it at full volume.