Both the House and Senate have passed the tax bill, and it is on its way to be signed by President Trump. It’s unclear now, but the President is likely to sign the bill between Christmas Day and sometime on New Year’s Day. It seems that a new small obstacle to passage of the tax bill has sprung up as it relates to the interaction within the administration of governmental activities. White House chief economic adviser Gary Cohn indicated that President Trump wants to sign the tax bill into law this year, but a congressional provision that could trigger automatic cuts to Medicare and other spending probably needs to be waived first. Under a 2010 law known as PAYGO, the $1.5 trillion reduction in government revenue caused by tax bill would trigger years of across-the-board cuts to programs including Medicare starting next year. By delaying signing until January 1, the PAYGO cuts would be postponed until 2019.
As always, contact your Schneider Downs representative with any questions. Additional details will be forthcoming as they emerge. Please continue to check the Our Thoughts On...Tax Reform blog for more coverage.