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The bitter partisan battle over the Tax Cut and Jobs Act last December left many of us wondering if Congress could cut a deal on the budget. But last month, Congress passed and the President signed into law a massive bipartisan budget deal to increase funding for government programs by hundreds of billions of dollars while averting another shutdown. The deal, which was announced by Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer, bumps spending for both defense and nondefense programs. The package sets the budget caps for the next two years and extends the current level of funding through March 23.
Included in the legislation is an additional $28 billion to the Department of Housing and Urban Development to help rebuild homes and infrastructure, and includes massive new spending on areas affected by natural disasters in 2017. It offers $89.3 billion for affected areas plus and additional $23.5 billion to FEMA’s Disaster Relief Fund.
So as we head into the countdown this month, Congress is looking to package all 12 appropriations bills into one omnibus spending bill, an action that has grown more common in recent years. Since 1985, the all-inclusive spending packages have been passed by Congress nine times. But within this year’s version, there may be an actual tax package and affordable housing advocates for the Housing Credit are in full gear to try to attach s548 (Cantwell-Hatch) into the legislation.
Could we really see a tax vehicle in an appropriation’s bill? In the huge rush to "fix our broken" Tax Code, Congress simplified things for lots of people by eliminating many of their itemized deductions, but made taxation of business income quite a bit more complicated. One of the unintended consequences of the new tax law may require action- it is called the “grain glitch”, and if left in place, the deduction would allow some farmers to effectively become tax-exempt and create major distortions in the agriculture industry, favoring cooperatives over other companies. While I say “good for the farmers”, there appears to a fix in the works. House Ways and Means Chairman Kevin Brady has said it is likely to be considered in the omnibus spending package.
The package may be our last chance this year to find a vehicle to increase the Housing Credit and fix the 4 percent rate for private activity bond deals. Thanks to the advocacy efforts of the ACTION Campaign, and its affiliate members, the outreach to Congress is in full swing. I encourage you, as always, to reach out to your Representative and /or Senator and ask them to support H.R. 1661 and s548 in the omnibus. For details on the bills, look them up on Congress.gov, and let me know your results.
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Affordable Housing News & Views - April 2018
This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.