President Trump stood on the South Lawn of the White House with dozens of Republican lawmakers Wednesday, touting his biggest legislative accomplishment to date: passage of a $1.5 trillion comprehensive tax reform bill, which the GOP successfully muscled through Congress earlier in the day, despite an 11th hour hiccup.
While the bill has been passed, reports cited White House officials as saying Trump might wait until after the New Year to sign the legislation into law in order to delay cuts to Medicare and other programs.
HR1, also known as The Tax Cuts and Jobs Act, passed the Senate on a 51-48 vote Wednesday morning before being sent back to the House for a second vote, where it also passed, 224-201. Lawmakers in the House had to take a second vote after the Senate parliamentarian ruled late Tuesday afternoon that parts of the bill, since removed, violated the reconciliation process.
The tax bill, which lowers the corporate tax rate from 35% to 21% and preserves important tax credits used by the oil and gas industry, received no Democratic support in Congress. Sens. Angus King (I-ME) and Bernie Sanders (I-VT), who caucus with the Democrats, voted no, as did several GOP defectors in the House, most of whom represent states with high tax rates (i.e. California, New Jersey and New York).
“We are making America great again,” Trump said to applause, before heaping praise on Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI). “Paul Ryan and Mitch, it was a little team. We just got together and we would work very hard, didn’t we? It seems like it was a lot of fun. It’s always a lot of fun when you win. If you work hard and lose, that’s not acceptable.”
Trump also lauded Alaska’s all-GOP contingent — Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young — for their efforts to get a controversial policy rider attached to the bill that will open a portion of the Arctic National Wildlife Refuge (ANWR), aka the 1002 Area, to oil and gas development. All three attended the White House event.
“A friend of mine called up about ANWR,” Trump said. “He’s in the office, and he said ‘you didn’t get ANWR?’ And I said, ‘tell me about ANWR.’ And he said ‘we’ve been trying to get that passed, the whole country, the world. They tried in Ronald Reagan, they tried with the Bushes, they tried with everybody — they never got ANWR. But we got ANWR in this bill. So we have ANWR, we have mandate, and we have the tax cut and we have the reform.”
Murkowski pointed out that Wednesday was also the winter solstice, the shortest day of the year.
“For us in Alaska, we’ve had some pretty dark days recently,” Murkowski said. “But with passage of this tax bill, with passage finally, almost 40 years later, to allow us to open up the 1002 Area, this is a bright day for Alaska. This is a bright day for America. So we thank you for that.”
HR1 preserves tax credits for enhanced oil recovery (EOR) and production from marginal oil and gas wells, plus deductions for intangible drilling costs, aka IDCs, and the passive loss exception. The bill eliminates the Corporate Alternative Minimum Tax, while agreeing to allow corporations to continue to take an Alternative Minimum Tax (AMT) credit to offset the regular tax liability for any taxable year.
HR1 also calls for temporarily increasing the annual limitation on offshore revenue sharing under the Gulf of Mexico Energy Security Act (GOMESA). Currently, GOMESA has a $500 million annual limit on distributed qualified Outer Continental Shelf revenues from FY2016 through FY2055, but under the tax reform bill the limit would be raised to $650 million for FY2020-2021.
The oil and gas industry reacted positively to the news.
“We’re pleased to see the final bill includes pro-growth measures that support the unique nature of our businesses, while allowing producers to continue investing billions of dollars back into American energy and the U.S. economy,” said Barry Russell, CEO of the Independent Petroleum Association of America.
“Meaningful tax policies like strong cost-recovery provisions, full expensing of capital expenditures, repeal of the corporate AMT, and lower corporate rates will help our member companies reinvest into new production and innovative technologies that will keep American energy affordable for U.S. consumers and create opportunities for the U.S. workforce.”
Dave McCurdy, CEO of the American Gas Association, added that “natural gas utilities are capital intensive industries and the Tax Cuts and Jobs Act supports the unique nature of the long-term investments that are at the heart of the safe and reliable service that our members provide.
“Long-term investments in energy infrastructure, including natural gas distribution systems, strengthen our economy, make the country more attractive for corporate investment and create jobs.”
But environmental groups and Democrats derided the tax bill as a GOP giveaway to corporations and the rich.
“Every Senate and House Republican who voted for this bill is now on record backing massive tax cuts for corporations and the richest Americans that will result in devastating cuts to programs that protect the health and safety of all people in our country,” said Sierra Club Executive Director Michael Brune. “This is a truly awful piece of legislation, but it can’t stop the work of environmental advocates to protect the air we breathe, the water we drink and the places we play.”
Senate Minority Leader Chuck Schumer (D-NY) was even more blunt.
“This tax bill will be an anchor around the ankles of every Republican,” Schumer said Tuesday. “If they haven’t learned it yet, they are going to learn it next November. Republicans will rue the day they passed this bill and the American people will never let them forget it.”
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