By Kirsten Korosec
December 19, 2017

A procedural snafu could delay passage of one of the biggest overhauls to the tax code in three decades.

The U.S. House of Representatives easily approved the final version of a GOP-backed tax plan Tuesday. The Senate is expected to vote and clear the bill later Tuesday. The bill passed along partisan lines at 227 for and 203 against. Twelve Republicans voted against the bill. No Democrats voted for the bill.

However, Republican leaders have been forced to schedule another vote in the House because at least three provisions conflict with the Byrd rule, which governs the fast-track budget process Republicans are using.

The Byrd Rule: An Explainer

Robert Byrd, a Democrat who represented West Virginia in the Senate for more than 50 years, created the rule. Byrd died in 2010.

The Byrd rule was adopted to prevent Congress from using budget reconciliation for “extraneous” provisions (more on that in a minute). The main, and general, purpose is to place limits on the reconciliation process by barring the inclusion of non-budgetary provisions.

Reconciliation is a process that Congress uses to fast-track passage of laws related to spending and revenue. Under this process, which the GOP has used for its tax reform bill, a simple majority vote is required. Normally, at least 60 votes are required in the 100-member Senate.

Reconciliation can be a handy tool when Congress is trying to pass bills that raise taxes and slash spending. But the Byrd rule places limits to how far it can be used.

Now onto “extraneous” provisions. There are six tests, which are in section 313 (b)(1) of the Congressional Budget Act, to determine if the provision is “extraneous.” But in general, if a fast-track budget bill contains a provision that doesn’t have anything to do with federal revenue and spending than it’s probably “extraneous.” Meaning, nope, it’s not allowed.

If the provision makes changes to Social Security, increases the deficit beyond the 10-year budget window, or does NOT produce a change in outlays or revenue than it’s considered extraneous.

Three Problematic Provisions

The three provisions that run afoul of this rule include a measure that would allow people to use money 529 savings accounts for home-schooling. A 529 account is a tax-advantaged savings plan designed to encourage saving for future college costs.

Another possible problem provision is one that would exempt colleges from a new endowment tax if they have fewer than 500 students paying tuition. The third appears to be a technical issue, reported CBS News.

These provisions can stay if Republicans can gather 60 votes. If not, they must be struck from the bill and then sent back to the House for a vote.

The Senate is still expected to vote on the bill Tuesday evening. The House has scheduled a vote for Wednesday. If all goes as planned, President Donald Trump will sign it into law. It’s unclear if Trump will be able to sign it before the end of the week.

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