Legislative update: Budget resolutions approved by House, Senate

Budget resolutions approved by House, Senate

Before departing for a spring recess, Congress made headway toward possibly adopting a federal budget.

Related content

With the passage by both chambers of their respective versions of the budget this week on a mostly party-line basis, congressional leaders have set in progress a bicameral negotiation which will begin in earnest when an expected conference committee is convened after Congress returns to Washington in early April 2015.

A congressional budget resolution, provided the House and Senate agree to a final version, would establish revenue targets for future appropriations and tax legislation.

A budget resolution does not appropriate funds or change tax law, and it is not signed by the president.

House action

The House passed its budget on Thursday, March 26, after considering several alternative budgets offered by a number of members. The final budget adopted was very similar to the budget approved and reported last week by the House Budget Committee with some modifications largely related to defense spending levels.

Senate action

The Senate passed its version of a budget in the early morning hours on Friday, March 27. During the long floor deliberation, the Senate adopted several dozen amendments to the version of the bill passed by the Senate Budget Committee, including a few amendments that were focused on tax-related matters.

While passage of these amendments does not begin the process of enacting any tax legislation, the show of support for the matters addressed by the amendments may influence the trajectory of negotiations on future tax issues—such as tax reform and the extension of some expiring tax provisions.

Among the amendments to the budget resolution adopted by the Senate were those addressing the following tax-related issues:

  • Support for extending and expanding refundable tax provisions that benefit working families, childless workers, and the middle class
  • Opposition to federal taxes or fees imposed on carbon emissions from any product or entity that is a direct or indirect source of emissions
  • Support for permanently increasing the maximum amount of the section 179 small business expensing allowance to $1 million and the investment limitation to $2.5 million and indexing them both for inflation
  • Support for an undefined decrease in the corporate income tax as a method for preventing U.S. jobs from being moved overseas
  • Repeal of the federal estate tax

In addition, the Senate adopted an amendment sponsored by Senator Rob Portman (R-OH) that requires the Joint Committee on Taxation to provide, in addition to a traditional estimate, a macroeconomic revenue estimate for any future tax legislation with a budget impact of $15 billion or greater.

The issue of macroeconomic versus traditional scoring is likely to be a focus of negotiation between the House and Senate as they enter a conference committee to attempt to reconcile the two different budgets.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.