Legislative Activity

Border Adjustability in the Spotlight

Though healthcare and repealing and replacing the Affordable Care Act have thus far been the primary focus of the tax-writing committees this Congress, policymakers are still continuing to move forward with tax reform. Among the proposals in the House Republicans’ tax reform “Blueprint” receiving the most attention in recent weeks is the call for a border adjustment tax. While the border adjustability provisions serve as a large payfor to help lower rates, there has been an increasing amount of opposition to the idea – including from several of the GOP’s more traditional allies. Potentially further complicating their efforts, President-Elect Trump last week made comments about the complexity of the border adjustment tax, noting that “[a]nytime I hear border adjustment, I don’t love it.” However, after receiving pushback from fellow Republicans who are counting on his support and leadership to get tax reform done, he later walked back his statement noting that “[i]t’s certainly something that’s going to be discussed…over the next month-and-a-half, two months we’ll be having more concrete discussions.” Since then, House Ways and Means Committee Chairman Kevin Brady (R-TX) has indicated that he and staff are working with the Trump Administration on the issue.

While the exact timing of when we expect legislation to be released is uncertain, tax reform is a priority that we expect will begin to be addressed in a substantive way during the first 100 days of the Trump presidency – thus, we are likely to see legislative text released by April.

This Week’s Hearings:

• On Tuesday, January 24, the House Ways and Means Oversight Subcommittee has scheduled a meeting to consider organizational matters for the 115th Congress.

Regulatory Activity

Acting Treasury Secretary Named as Mnuchin’s Confirmation Pending

Last week, as Treasury Secretary Jack Lew stepped down in conjunction with the inauguration of President Donald Trump, the Treasury Department named Acting Undersecretary Adam Szubin as Acting Secretary to ensure continuity until a successor is confirmed by the Senate.

Relatedly, on Thursday, January 19, the Senate Finance Committee held a hearing to consider the nomination of Mr. Steven Mnuchin to be the Secretary of the Treasury. During the hearing, discussion focused on various topics, including:

1. tax reform;

2. the Internal Revenue Service (IRS);

3. trade;

4. financial services regulations;

5. sanctions;

6. currency; and

7. housing finance reform

Mr. Mnuchin was the national finance chairman for President-Elect Trump’s 2016 presidential campaign and is a former partner at Goldman Sachs, where he worked for 17 years. As of today, no date has been set for a vote by the Committee on his confirmation.