U.S. House of Rep. Passes 2018 Budget – DTN

    The House of Representatives on Thursday passed the fiscal year 2018 budget resolution that had earlier cleared the U.S. Senate, setting the stage for the Republicans to write a tax reform bill.

    The budget resolution will allow the Senate to consider a tax-reform bill without needing 60 votes in the Senate to end debate.

    The vote was 216-212. Twenty Republicans joined all 192 Democrats in voting against the resolution, giving the Republican leadership a margin of only four votes. Five members did not vote.

    The White House praised the action. A statement from Press Secretary Sarah Sanders said, “This resolution sets the stage for Congress to put America first by providing economic relief for the American people in the form of tax cuts and tax reform.”

    The statement added, “President Trump has always made cutting taxes for hard-working American families, creating more jobs for American workers, and simplifying the rigged and burdensome tax code a priority, and he looks forward to further cooperation with Congress to advance the Administration’s pro-growth and pro-jobs agenda.”

    Some Republicans expressed reservations that the bill may increase the national debt and that tax reform may end the deduction for state and local taxes. House Budget Committee Chairwoman Diane Black, R-Tenn., defended the budget resolution, “I am proud that Congress agreed to a budget that reflects the shared priorities of both chambers and represents the golden key to unlock historic tax reform,” Black said.

    “Through tax reform, we can put more money in the pockets of hardworking Americans, provide much-needed tax relief and create more jobs. By passing this budget, I am pleased we can begin the process of advancing tax reform and ultimately get legislation to the president’s desk for his signature.”

    But a spokesman for the Democratic Congressional Campaign Committee said, “With this budget, House Republicans are officially on the record supporting a middle-class tax increase — something they’ll be forced to defend repeatedly in the midterms.”

    “Speaker [Paul] Ryan’s [R-Wis.] foolish decision to force his most vulnerable members to walk the plank on a toxic tax increase for a huge group of hardworking Americans has further imperiled his majority.”

    Farm Policy News

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    Farm leaders have expressed enthusiasm for tax reform, but are beginning to have reservations about current tax breaks that farmers might lose in the Republican attempt to reduce the corporate income tax rate.

    This week the National Council of Farmer Cooperatives expressed strong reservations about the provision in the Republican document “Unified Framework for Fixing our Broken Tax Code” that would eliminate the Section 199 deduction that is passed down by farmer co-ops to their member-owners.

    Section 199, also known as the Domestic Production Activities Deduction (DPAD), was enacted as part of the American Jobs Creation Act of 2004 and applies to proceeds from agricultural products that are manufactured, produced, grown, or extracted by farmer cooperatives, or that are marketed through co-ops, NCFC explained.

    If the provision is passed, NCFC said, “Money will flow from the pockets of farmers and rural communities to investment bankers on Wall Street and venture capitalists in Silicon Valley.”

    The great majority of cooperatives pass the benefit through directly to their farmer-members, and it is estimated that the deduction returns nearly $2 billion annually to rural areas in all 50 states.

    Patricia Wolff, the tax adviser at the American Farm Bureau Federation, has spoken repeatedly of farmers’ concerns about the tax bill. This week she told Financial Times that farmers want to hold on to the interest deduction because they rely heavily on debt to buy their land, finance equipment and purchase seeds and other raw materials.

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