Capitol Hill Democrats are set to resist the
spending proposal; the SEC requests a budget bump
February 10, 2020 BY
MARK SCHOEFF JR.
In a
budget proposal released Monday, the Trump administration assumes that tax cuts
set to die in 2025 would live on — a move that almost certainly will hit
resistance on Capitol Hill.
The $4.8 trillion White House
budget for fiscal 2021 projects a $1.1 trillion deficit for
2020 that drops to $986 billion in 2021. The budget would balance in 2035,
according to Trump administration estimates, thanks in part to $4.6 trillion in
deficit reduction over the next decade.
In
order to construct the baseline for the projections, the budget assumes that
the reduction in individual tax rates, as well as estate and gift tax
rates contained
in the 2017 tax reform law, would extend beyond 2025, when they’re
currently set to expire.
“The
2021 budget supports the extension of the individual and estate tax provisions
of the Tax Cut and Jobs Act beyond their expiration in 2025 … to provide
certainty for taxpayers and to support continued economic growth,” the
budget analysis states.
Palmer
Schoening, chairman of the Family Business Coalition,
is lobbying Congress to lock in the 2017 tax cuts.
is lobbying Congress to lock in the 2017 tax cuts.
“What
the Trump administration is proposing in the president’s [full-year] 2021
budget would provide predictability to small businesses, which are currently
facing the prospect of higher taxes [soon] if the current law is not extended,”
Mr. Schoening wrote in an email. “Locking in these rates would let business
owners know that their taxes won’t spike and their succession plans won’t be
thrown out in 2026, costing them time and money in estate planning fees to
rework how to pass their businesses on to the next generation.”
Fight
looms in Congress
But
there is no chance the Trump administration budget proposal will get through
Congress intact. The Democratic majority in the House signaled it won’t
go along with President Donald J. Trump’s approach to reducing federal
spending.
“Less
than a week after promising to protect families’ health care in his State of
the Union address, the president is now brazenly inflicting savage
multi-billion-dollar cuts to Medicare and Medicaid,” House Speaker Nancy
Pelosi, D-Calif., said in a statement Sunday night.
Extending
the tax cuts would cost the government $1.5 trillion between 2025 and
2030, according
to the Committee for a Responsible Federal Budget.
Trying
to make significant changes to the tax code this year is not likely, said Marc
Gerson, a member at the law firm Miller & Chevalier.
“The
revenue issue is a very significant one, especially in
an election year,” Mr. Gerson said.
an election year,” Mr. Gerson said.
But the
tax policy contained in Mr. Trump’s budget will likely become campaign fodder.
“It
will stand in contrast to the proposals of the Democratic presidential
candidates,” Mr. Gerson said.
SEC
requests budget increase
The
administration’s budget proposal includes $1.9 billion for the
Securities and Exchange Commission, an increase of about $80 million
from its enacted fiscal 2020 budget.
The
budget boost would allow the SEC to add 30 positions to “enhance
the agency’s depth of expertise in emerging or evolving areas relating to
financial innovation, cybersecurity, small business capital formation, and market oversight, as well as other policy and operational areas,” the SEC states in its budget request.
the agency’s depth of expertise in emerging or evolving areas relating to
financial innovation, cybersecurity, small business capital formation, and market oversight, as well as other policy and operational areas,” the SEC states in its budget request.
At the
beginning of the current government fiscal year, Oct. 1, the SEC said it
oversaw nearly 13,500 registered investment advisers with $84 trillion in
assets under management.
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