With reconciliation and conversations about how to deal with soon-expiring tax cuts, President Donald Trump is being more hands-on with bill negotiations than he was in 2017, a top House tax writer told us Thursday morning.
Rep. Kevin Hern (R-Okla.), a senior member of the House Ways and Means Committee, said it’s Trump rather than Treasury Secretary Scott Bessent driving tax talks. In 2017, then-Treasury Secretary Steve Mnuchin was a key driver of the negotiations that led to the tax law signed that year.
“I’ve seen the president for the last five weeks in a row, and he’s more hands-on than any president’s probably been in modern history,” Hern said. “The president has a vision of where he wants to go.”
Tax promises: While lawmakers won’t be able to get all of their tax priorities in a reconciliation bill, they’re trying to ensure all of Trump’s goals make it in, Hern said.
One of those areas that Trump is seriously pushing is ending the carried interest loophole. Trump tried to do that in 2017 as well but was unsuccessful.
“He’s not happy he didn’t fix that the first time around,” Hern said.
Challenges: Another aspect of this year’s reconciliation effort that’s different from 2017 is the slim House majority, Hern said. That’s one of the main reasons House Republicans are pushing for one reconciliation bill.
The Senate is currently moving ahead with a two-bill approach to reconciliation, with a border and energy package going first and a tax bill going second. That makes enacting tax priorities more difficult, Hern said.
“The speaker has a very difficult job, much different than even in 2017 when you can lose 20+ votes in the Republican party,” Hern said.
Fireside chat: Following our conversation with Hern, Danielle Rolfes, the partner in charge at KPMG’s Washington National Tax practice, joined us for a conversation about what companies should be watching out for during tax negotiations.
Rolfes said the legislative environment creates a challenge for companies and their chief tax officers.
“It’s really hard to plan for a large organization when you don’t know what the tax laws will be in 2026,” Rolfes said.
One of the most important areas for companies to watch is what pay-fors lawmakers decide to use to offset the rest of the tax package, Rolfes added.
International tax is a ripe area for offsets, and companies weren’t prepared for some of the changes in 2017.
“At the end of the day watch out for international as the good old piggy bank,” Rolfes said.
Child tax credit: We also sat down with a separate panel of experts to discuss the child tax credit and how Congress may approach changes to the tax benefit for families.
Kodiak Hill-Davis of the Niskanen Center, Paolo Mastrangelo of American Policy Ventures and Portia Allen-Kyle of Color of Change joined us for the conversation. A more generous child tax credit is one of the 2017 measures that is set to expire at the end of 2025.
“The most important part from my perspective of how to build the CTC is how to make it as durable as possible,” Mastrangelo said.
You can watch the video of the full event here.
