Credit unions fared well in the GOP tax bill passed through Congress on Wednesday, despite lobbying efforts by big banks to tilt the playing field against them. But they didn’t get everything they wanted.
A provision that dealt with executive compensation would unfairly penalize credit unions, industry leaders complained after the bill first moved through the Senate in early December. Not to worry, urged lobbyists with the Credit Union National Association, there will be another chance to make themselves whole.
“We expect a tax technical corrections bill to be considered in Congress in 2018, and CUNA will actively advocate for not-for-profit parity with for-profit businesses regarding employee contract parity and the ‘grandfathering’ of existing contracts,” CUNA promised the credit unions it represents.
Republican leaders in Congress, after determining to go for $6 trillion in tax cuts, almost exclusively for the wealthy and major corporations, needed a way to balance some of those cuts out in order to squeeze it through the budget process known as reconciliation, which requires only a simple-majority vote in the Senate. The search through the nation’s couch cushions resulted in countless parties equally aggrieved as the credit unions. They now want their coins back. The lobbying battle in Washington, and the looting that comes with it, is just getting started.
“Next big fight is ‘technical corrections,'” Democratic lobbyist Heather Podesta, who runs the firm Invariant, told The Intercept. “Game on.”
That effort will compete with, and in some ways complement, a parallel effort to shape how the hastily written law translates into actual IRS regulations.
The breakneck process through which the bill passed has set the stage for special interests to take another crack at shaping tax policy. Lobbyists thrive on a poorly constructed statute, as it leaves wide room for interpretation when it comes to writing the regulation, and also opens the door for a “technical correction” that, in reality, is brand-new policy masquerading as a noncontroversial tweak.
Sam Geduldig, a Republican lobbyist and a partner at CGCN Group, said that Washington’s influence industry will now move to its next phase.
“A law firm will draft a proposed reg that benefits their client(s). A public affairs campaign will be structured around getting the reg drafted correctly, with opeds and media coverage. And then someone will hire us to hand the proposed reg and the favorable press clips to the lawmakers and agencies,” he told The Intercept over email. “We should all be registered as lobbyists, including the media outlets who accept our advertising. Unfortunately, the lobbyists are the only ones to disclose their role in this process.”
Most major legislative reforms require technical corrections, until recently done on a bipartisan basis to fix uncontroversial errors slipped into the text. After the 1986 tax reform, several technical corrections were passed to resolve unintentional issues created by the law.
But that comity was broken in the wake of the passage of the Affordable Care Act, which included its share of drafting errors. Republicans, however, refused to negotiate fixes and threatened a filibuster in the Senate. And so the law limped along as originally written.
The Tax Cuts and Jobs Act, drafted largely in secret and passed rapidly over the course of only two months, is expected to create a tidal wave of unforeseen tax issues. Tax experts have expressed concern that some substantial changes will require a 60-vote majority in the Senate, a legislative scenario that would set up a round of negotiations with Democratic lawmakers. The speed with which the bill was written already caused Republicans headaches, as the Senate parliamentarian ruled that two provisions, and even the bill’s short title, were in violations of the rules of reconciliation, requiring an embarrassed House to hold an extra vote after it had thought it was finished.
But for tax lobbyists, law firms, public affairs consultants, and accountants, the next round means full employment.
Republicans have made no secret of their plan to try to fix their bill after it becomes law. Only days before the House of Representatives passed the final conference report of the tax bill, one of the primary architects warned reporters — and the lobbyists reading them — to expect another round of changes. “I can’t imagine any major undertaking like this that doesn’t require technical corrections in the future,” Rep. Kevin Brady, R-Texas, told reporters on Friday.
K Street, no doubt, will be ready to assist.