Washington Tax Insight December 2016
Election Results and the Policy Agenda
On November 8th, Donald Trump was elected the 45th president of the United States. During the transition period until inauguration day on January 20, 2017, he is working to assemble a team of advisors and cabinet members. President-elect Trump discussed tax reform as a priority during his campaign and released a package of tax proposals, but it is difficult to predict what the pace and content of tax reform will be under a Trump Administration until key appointments are made and a more detailed package of proposals is available. The key appointee for the agenda on tax reform will be Trump’s pick for Treasury Secretary, Steve Mnuchin, a former Wall Street executive who served as the campaign finance manager. Although IRS Commissioner Koskinen’s term does not expire until November 9, 2017, it is unclear whether he will be replaced sooner considering efforts by House Republicans to impeach him.
Congressman Paul Ryan (R-WI) will return as Speaker of the House with Congressman Kevin McCarthy (R-CA) as Majority Leader and Congressman Steve Scalise (R-L) as Majority Whip. House Democrats have chosen current Minority Leader Nancy Pelosi (D-CA) to retain her position, House Ways & Means Committee Chair Kevin Brady (R-TX) keeps his position and will lead the House effort on tax reform in 2017. Congressman Richard Neal (D-MA) replaces Sander Levin (D-MI) as Ranking Member on the Committee.
The Ways and Means Committee currently has 39 members, split between 24 Republicans and 15 Democrats with no announcements yet as to whether that ratio will change. Two Democrats chose to retire – Congressman Charles Rangel (D-NY) and Congressman Jim McDermott (D-WA) – and three Republican seats will be filled due to the departures of Congressmen Dold (R-IL), Boustany (R-LA) and Young (R-IL).
Senator Mitch McConnell (R-KY) will return as Majority Leader for the Republicans. His counterpart as Minority Leader will be Senator Charles Schumer (D-NY), who replaces the retiring Senator Harry Reid (D-NV). Senator Schumer named an expanded leadership team of 10 Senators including Senators Bernie Sanders, Dick Durbin, Patty Murray and Joe Manchin. Senate Democrats are viewed as the last line of defense against the Trump agenda due to the general requirement of 60 votes in the chamber necessary to break a filibuster. In the next Congress, the Senate will have 51 Republicans, 48 Democrats and one independent. Senator Orrin Hatch (R-UT) returns as Chair of the Senate Finance Committee. Senator Ron Wyden (D-OR) won re-election and returns to lead the Democrats on the Committee. Several Republican members won re-election including Senators Portman (R-OH), Grassley (R-IA), Burr (R-NC), Crapo (R-ID), Isaakson (R-GA), Scott (R-SC) and Thune (R-SD) with one member to be replaced, Senator Dan Coats (R-IN), who will retire at the end of the year.