Congress
Ways and Means eyeing limits to corporate tax deductions
The House Ways and Means Committee is looking at limiting corporate state and local tax deductions as one way to offset the costs of a large party-line tax bill, according to two people familiar with the discussions.
The panel, which oversees all tax policy, is considering the limit among other potential offsets for the bill, according to the people, who were granted anonymity to share private deliberations. Companies currently can deduct an unlimited amount of state income, property and sales taxes from their federal tax bill.
The discussions signal that a proposal to limit corporate SALT, as the deduction is called, may have enough support among Republicans to make it into a party-line tax bill. The far-right House Freedom Caucus had previously raised the idea of putting a cap on the deduction to pay for raising the current cap on the amount of state and local taxes that individuals can deduct, but it was unclear how much buy-in the proposal had with the rest of the conference.
The discussions come as tax writers scramble to find ways to contain and offset the costs of both extending expiring tax cuts and enacting President Donald Trump’s tax priorities. House Republicans adopted a budget plan last week that set the upper limit on the size of tax cuts at $4.5 trillion, which leaves very little wiggle room for the conference to enact all of their ideas.
Extending the expiring provisions of Trump’s 2017 tax cuts for ten years would cost roughly $4 trillion without interest, according to the Congressional Budget Office. Republicans have also committed to restoring business write-offs like bonus depreciation, which would cost $378 billion over a ten-year window, according to CBO.
Those policies alone would leave little room for some of Trump’s campaign promises to eliminate income taxes on tips and overtime work, which could add hundreds of billions more in red ink.
The Ways and Means Committee has also been considering other ways to cut down the impact of a tax bill on the federal deficit. Those include strengthening work requirements for the Temporary Assistance for Needy Families program and repealing a nursing home staffing mandate implemented under the Biden administration.
According to a joint analysis by the Bipartisan Policy Center and the Tax Foundation, repealing corporate deductions for state income taxes could raise around $192 billion in revenue.
Congress
Librarian of Congress Carla Hayden is fired by Trump
President Donald Trump fired Librarian of Congress Carla Hayden Thursday, according to a library spokesperson and an email obtained by Blue Light News.
“Carla, On behalf of President Donald J. Trump, I am writing to inform you that your position as the Librarian of Congress is terminated effective immediately. Thank you for your service,” wrote Deputy Director of Presidential Personnel Trent Morse in an email to Hayden sent at 6:56 p.m.
Hayden’s firing generated an immediate backlash from congressional Democrats. Rep. Joe Morelle (D-N.Y.), the top Democrat on the House committee that oversees the library, slammed Trump for “firing a patriotic public servant.” House Minority Leader Hakeem Jeffries piled on, calling the decision “unjust” and a “disgrace.” Sen. Martin Heinrich (D-N.M.) praised Hayden in a statement and said Trump was “taking his assault on America’s libraries to a new level.”
The White House did not immediately respond to a request for comment.
Hayden became the first Black Librarian of Congress and the first woman to lead the world’s largest library after the Senate confirmed her in a 74-18 vote in 2016. Her 10-year term began that year, though she may have been eligible for renewal under rules set by Congress.
Hayden was nominated by President Barack Obama, who knew Hayden from her time at the Chicago Public Library. Immediately before being tapped as Librarian of Congress, she led the Enoch Pratt Free Library in Baltimore.
She has been a prominent public face of the Library of Congress, active on social media and expanding offerings of events at the library. She launched a strategic plan for the library and was shepherding a complete overhaul of the visitor experience, including significant structural changes to create a new way for visitors to view the iconic reading room.
Hayden faced criticism from House Republicans at a House Administration hearing Tuesday about cost increases and delays to that project.
Gregory Svirnovskiy contributed to this report
Congress
Ways and Means chair to huddle with Trump on taxes
House Ways and Means Chair Jason Smith is set to meet Friday with President Donald Trump at the White House with the tax portion of the GOP megabill at risk of unraveling, according to three people granted anonymity to describe the private plans.
Smith will have to inform Trump that the tax portion of the megabill has been limited by the GOP’s inability to build support for deep spending cuts and that Republicans will have to leave out some of his priorities, according to three other people with direct knowledge of the matter.
The White House meeting will come a day after Speaker Mike Johnson privately told Republicans Thursday that they would only be able to pay for $4 trillion in tax cuts, versus the $4.5 trillion they had previously been targeting to enact the president’s sprawling tax demands.
Smith explained Trump’s latest asks for the tax bill to Ways and Means Republicans in a Thursday morning meeting. They include closing the so-called carried interest loophole and hiking taxes on the wealthiest Americans, according to two other people.
Congress
Senate Democrats demand hearing on Trump deportations
Senate Democrats are asking Homeland Security and Governmental Affairs Committee Chair Rand Paul to convene a hearing on President Donald Trump’s deportation policies, including claims that administration officials are defying court orders in their haste to expel foreigners from the U.S.
In a letter obtained by POLITICO, all the panel’s Democrats called on Paul to “immediately” hold a hearing on Trump’s approach to a series of high-profile deportation fights, including the transfer of more than 200 foreigners to a notorious high-security prison in El Salvador in March. Judges have found two of the deportations to be illegal or improper, while another judge is mulling contempt proceedings after concluding the administration might have defied his orders.
“The Administration demonstrates its intention to upend our nation’s bedrock principles of checks and balances by placing the Executive Branch above the law and outside the reach of judicial orders,” said the letter, signed by the committee’s top Democrat, Sen. Gary Peters of Michigan, and colleagues. “The Administration has declined to present evidence of their claims in court, they have denied individuals their right to have a hearing to contest the government’s claims, and they have refused to follow the rulings of multiple courts, including the U.S. Supreme Court.”
The Democrats said Trump’s policies threaten to impact U.S. citizens as well, since he has publicly said he’d like to send American criminals to foreign prisons.
In the letter sent Wednesday, Peters and colleagues asked Paul to summon three Cabinet members — Secretary of State Marco Rubio, Attorney General Pam Bondi and Homeland Security Secretary Kristi Noem — as well as FBI Director Kash Patel.
The letter warns that Republicans could “embolden” Trump by failing to conduct oversight of his administration’s action, but it also makes reference to Paul’s independent streak, praising him as “a steadfast advocate for Congress’ role as a co-equal branch of government.”
A spokesperson for Paul did not immediately respond to a request for comment.
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