marctomarket.com / by Marc Chandler / Jul 31, 2017
The rancorous debate over health care reform sucked the oxygen away from other pressing issues before Congress. The savings from the reforms was seen as a critical part of tax reform.
The tax reform strategy is the same as with health care reform. A small group of Republicans, representing both houses of Congress and the Trump Administration, are hammering out an agreement that then will be presented to the House of Representative and Senate. It is not clear how the missing funding, from the health care reform and the Border Adjustment Tax, will be made up for in the tax reform. The same split that prevented the majority party from reaching an agreement on health care may hamper an agreement on taxes.
However, before taxes reform or cuts can be addressed, there are two other pressing fiscal issues: the debt ceiling and spending authorization. The debt ceiling (~$19.8 trillion) was reached late in Q1, and the Treasury Department has implemented a series of extraordinary measures that were large developments by earlier administrations dealing with the same issue.