I am fresh off a new episode of “Game of Thrones” and the similarity between the intrigue in the Seven Kingdoms and what is happening in Washington, DC is amazing. I will spare you a point by point/character by character analogy but aside from no one in our nation’s capital being scorched by dragons, the dysfunction and chaos that is a mainstay of the HBO drama seems to have become the new normal in Washington. 

Since my last report, when we were preparing for the promised vote on the ACA Repeal and Replace, mayhem has arrived in the Senate with Senate Majority Leader Mitch McConnell learning what it has been like for former Speaker John Boehner and current Speaker Paul Ryan who have not always been able to depend on their Republican conferences for votes to pass legislation.  At the time of this update it is unclear if there will be a vote on Repeal and Replace, simple repeal or no vote at all.  This has the President enraged and sending out Ravens, I mean Tweet’s targeting members of his own party with scorn and threats. 

With healthcare reform in tatters many are hoping amove to tax reform might be the salve the majority party in DC needs to finally get a win in their pocket.  A six person working group made up of members of the administration, House and Senate have been meeting for weeks on reform and the President believes reaching an agreement will be easy(ier) compared to healthcare reform.  Yet there remain significant gulfs between the White House, House and Senate on what is doable.  A number of Senate Finance Committee members have told me that their colleagues are not at all enamored with what has been coming out of the House, and the White House expectations are unrealistic.  What appears to be achievable in the end is less tax reform and more likely a tax cut.  They may reach an agreement on some international tax revisions which have bipartisan support, but more than that, especially considering the legislative calendar, seems unlikely.   I caution everyone to not assume tax reform is unachievable as we are living in the political era of expect the impossible.  That being said I remain bullish on the corporate tax rate remaining north of 28% with the likelihood of real tax reform slipping away with the coming of winter. 

What must be addressed by Congress is the FY2018 budget and that is proving equally as difficult to form consensus around.  The House may vote on a budget resolution this week before they depart for their August recess but as of today they are short the 218 votes needed to pass the resolution.  Significant cuts to domestic programs do not have consensus among Republican’s, including $1.2 billion in cuts to the Housing Choice Voucher program as well as other cuts to the HUD budget.  Significantly, the House version of THUD funding is $3.5 billion less than the Senate version which we will learn more about at the Senate THUD markup on July 25th.  The significant disparity between House and Senate funding levels do not bode well for an agreement between the two chambers which in the end, could spell trouble for the Republican plan to pass tax reform through the budget reconciliation process. If there is no agreed upon budget, there is no reconciliation. 

As I indicated previously, the House and eventually the Senate will be heading home for the August recess and this is a perfect time to advocate with your Senators and Representatives on behalf of our LIHTC legislation, S. 548 and H.R. 1661 as well as funding of the HUD budget.  You added Congressman Darrell Issa (R-49) to the cosponsor list for H.R. 1661 which is great news but we still have a majority of the CA delegation that has yet to sign-on.  Despite the travails facing tax reform, there are other potential vehicles by which our LIHTC expansion bills can become law so demonstrable support for the legislation is critical.  By all means enjoy the summer and let us know if you have a Member of Congress to a property.  The fall may prove perilous for many legislative priorities but as we have proven in the past, when we bring someone on board as an affordable housing supporter, our housing agenda has traditionally prevailed.  For timely updates and news feel free to follow me on Twitter at @dsgasson.