Scott Peska, Ed.D., Dean of Students at Waubonsee Community College
January 11, 2018
For members of the Public Policy Division the month of December meant keeping a watchful eye on two important pieces of legislation in addition to taking time to celebrate the merriment of seasonal holidays such as Christmas, Hanukah, and Kwanzaa. The first bill was H.R. 4508 “Promoting Real Opportunity, Success, and Prosperity through Education Reform Act” or ”PROSPER Act.“ This 472-page bill was introduced to the House of Representatives Committee on Education and the Workforce on December 1st and marked-up and passed out of the committee less than two weeks later on December 12th. The second bill was the Tax Cuts and Jobs Act, signed by President Trumped on December 22nd, which was just in time for anyone who celebrates the December 23rd Festivus holiday.
For those unfamiliar, Festivus is a holiday celebrated annually on December 23rd that was created as an alternative to the heavily commercialized Christmas holiday. It was first introduced to popular culture through the 1997 Seinfeld episode “The Strike” in which Frank Costanza (George’s father) recounts how he created Festivus over a fight for a toy baby doll. Festivus, like many long-standing holidays, has a number of customary practices, which include a bare aluminum pole in a tree stand and a Festivus dinner beginning with an “Airing of Grievances.” (Frank Costanza describes the “Airing of Grievances” as “I got a lot of problems with you people and now you are going to hear about them.”) If you want to learn more about how to have a tinsel free Festivus holiday visit http://festivusweb.com.
Anyone watching CSPAN on December 1, picking up a newspaper in the few weeks leading up to the holidays, or read the December 11 NASPA blog post on the pending tax bill and PROSER Act saw plenty of concerns to voice about both the Tax Cut and Jobs Act as well as the PROSPER Act.
First, many Democratic Senators aired concerns that they were not provided enough time to read the 479-page tax plan. This new Tax Cuts and Jobs Act includes some significant changes and is one of the largest overhauls to the tax code in more than 30 years. The bill was introduced to the House of Representatives on November 2nd and was passed on November 16th with not a single hearing held before the vote. On this same day the Senate Finance Committee introduced companion legislation (a common practice) which was passed by the Senate Budget Committee on November 28th to allow a vote on the Senate floor on December 2. Many Democratic Senators claimed that in addition to not having time to read the bill they also did not receive all the last minute edits and changes to the bill, some of which were hand written in the margins of earlier drafts of the bill, in a timely fashion. Democratic leaders filed motions to provide a 3-day extension, but these were not passed.
Another grievance shared about this new tax bill is how it contains abundant provisions that benefit very few people or even specific individuals. An example pointed out by Senator Bernie Sanders (I-VT) was that this tax bill included specific language (page 503, section 14504) that seemed to specifically benefit hedge fund managers who reside in the Virgin Islands, giving them a major tax break on capital gains and nearly a 90-percent reduction in tax liability on their income.
Now that it has been signed by President Trump, the new tax law will become the responsibility of the Internal Revenue Service to implement. Since its passing there remain many unanswered questions. One that dominated the media before the New Year was whether individuals should prepay on their mortgage taxes. It seemed no one could provide a clear answer because so much has yet to be determined. The Internal Revenue Service will be challenged to enact the new changes during their busiest time of year, while trying to process the tens of millions tax returns for 2017. The New York Times reports that the IRS’s budget has been dramatically cut since 2010, which has resulted in a 23% reduction of staff. These reductions may mean implementation challenges may linger and be part of the Festivus conversations next year when individuals realize how they may or may not benefit from this new plan.
For those who have not compared the Tax Cuts and Jobs Act to the current tax bill, this New York Times article provides a strong comparison between the previous law and the new law.
Moving on to the PROSPER Act, it appears this bill moved with nearly the same speed out of Committee. It was passed in the wee hours of the December 12 and was referred to the full house. ACE prepared a well-documented summary of the 472 page act and the provisions in this legislation as it was introduced. While there were changes and amendments made during the committee mark-up, the final passed bill is not yet posted on Congress.gov. While some changes are welcomed, such as the simplification of FASFA and the continuation of the Pell Grant through 2024, there are other aspects that are quite concerning to undergraduate students, graduate students, parents, and all of higher education. (Editor’s note: For more on the PROSPER Act, sign up for a free half hour policy briefing from NASPA staff on January 25, 2018 at 2:30 ET.)
Again, a concern of timing is being voiced that there will be very little time to provide comments or feedback while this is in the markup stage in committee. On December 8 the National Association of Student Financial Aid Administrators shared their feedback regarding this proposed legislation.
Hopefully the Senate Committee on Health, Education, Labor & Pensions (HELP) process will result in a bill with fewer potential grievances, otherwise it will be on the table for Festivus next year!
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