November Advocacy Roundup: A December to Remember…Again
November 30, 2017
Mark Lee, Policy Director, Government Relations, AEO
If it is the end of the year, then there is likely another year-end Congressional showdown looming. This year is no different.
On November 28, House and Senate Leadership of both parties were scheduled to meet with President Trump, separately, to hammer out a deal funding the government for the balance of FY 2018. However, a dismissive tweet by the President in lieu of the meeting prompted Democratic House and Senate Minority Leaders Nancy Pelosi (D-CA) and Chuck Schumer (D-NY) to cancel. This snub infused further uncertainty into an already unwieldy end-of-the-year Congressional schedule.
On September 8, Congress passed a continuing appropriations resolution (CR) to fund the government until December 8. The CR was part of a larger deal between President Trump and Leaders Pelosi and Schumer to raise the debt ceiling and provide disaster relief to victims of Hurricanes Irma and Maria. While the debt ceiling will not require further attention until sometime in spring 2018, Congress will need to complete the appropriations process, or pass another short-term CR, before or by 11:59 p.m. on December 8.
To that end, the Senate Appropriations Subcommittee on Financial Services & General Government — the subcommittee of jurisdiction for the Small Business Administration (SBA) and the Community Development Financial Institutions Fund (CDFI) at Treasury — has released its funding bill for FY 2018. The proposed funding levels for AEO priorities are as follows:
- CDFI Fund: $248M (AEO FY 2018 request: $250M)
- CDFI BGP: $500M (AEO FY 2018 request: $1B)
- Microloan (TA): $31M (AEO FY 2018 request: $31M)
- Microloan (Lending): $36M (AEO FY 2018 request: $44M)
- Women Business Centers: $18M (AEO FY 2018 request: $21.5M)
For appropriation’s purposes, the SBA’s PRIME program is considered discretionary, and funding will be determined by the SBA after the bill passes. Other programs supported by AEO, funded by the Senate Appropriations Subcommittee on Agriculture, are as follows:
- Rural Business Development Grants: $24M (AEO 2018 request: $30M)
- Intermediary Relending Program: $8.8M (AEO FY2018 request: $19M)
The United States Department of Agriculture’s (USDA) Rural Microentrepreneur Assistance Program (MRAP) is also considered discretionary, and funding will be determined by USDA after the bill passes.
Although the House passed its FY 2018 funding bill on September 14, the Senate has yet to act. Both chambers will need to negotiate on funding for the remainder of FY 2018 prior to December 8, or pass another short-term CR to allow Congressional appropriators to finish their work.
Congress is simultaneously moving with all due haste toward passing a major tax reform bill before the end of the year. The Senate is considering the “Tax Cuts and Jobs Act”. While the bill has survived one legislative hurdle, full Senate is not yet guaranteed. Three major concerns have emerged: 1) the tax treatment of pass-through entities, 2) the effects of the $1.4 trillion bill on the federal deficit, and 3) the repeal of the Obamacare Individual mandate. In the bill, the corporate tax rate is cut from 35% to 20% after a one-year delay. Pass-through entities would receive a 17.4% deduction on up to 50% of net business income. The GOP holds a 52-48 majority in the Senate, and can only lose the support of two GOP senators if they are to pass the bill, with Vice President Mike Pence casting the deciding vote.
If the Senate manages to pass its tax reform legislation, the variations between it and the House version are stark. Amongst other differences, the House bill generally taxes pass-through entities at a 25% rate, and reduces individual rates from seven to four tax brackets. Another concern is that corporations will be able to deduct State & Local Taxes (SALT), whereas pass-throughs cannot. AEO has sent a letter to the entire Senate regarding our tax priorities. Before a final bill makes it to the President’s desk, these differences will need to be resolved.
Historically, the looming Christmas holiday recess has proven a great motivator for Congress to seek deals and avoid unresolved issues from bleeding into the next calendar year. AEO will continue to keep you informed during Congress’ mad dash to 2018.
October 22, 2018
Treasury Releases Proposed Regulations on Opportunity Zones Designed to Incentivize Investment in American Communities
The IRS's proposed regulations clarify that any person that recognizes capital gain for U.S. federal income tax purposes is eligible to defer all or a portion of such gain by investing in an Opportunity Fund.
October 17, 2018
AEO Announces Hyacinth Vassell As Vice President of Innovation Engineering
AEO, a national nonprofit organization dedicated to the development of a robust marketplace for underserved microbusinesses, is proud to announce Hyacinth Vassell as Vice President of Innovation Engineering.