Paul Krazak has reported at CQ that the tax bill passed Congress, H.R. 1, may have to wait on a Presidential signature until January 3rd.
As I wrote about yesterday, the enactment of the tax bill could trigger a $212 billion mandatory sequester in 2018 unless Congress removes the budgetary effects of the bill from the Statutory PAYGO scorecards.
“White House National Economic Council Director Gary Cohn said Wednesday that Trump might delay signing the tax bill (HR 1) if a waiver of the pay-as-you-go law is not included in a continuing resolution that lawmakers are trying to pass before government funding runs out at midnight Friday. “
And more Krawzak on the important bit:
“But if Trump were to sign the bill in January, then, in the view of some OMB officials, the costs of the bill would not be entered on the scorecard until fiscal 2019 through 2028, meaning the sequester would be delayed until 2019. That would give Congress another year to figure out how to waive the law.“
The Office of Management and Budget (OMB) is responsible implementing the sequester even though they are required to use the budgetary effects estimated by the Congressional Budget Office (CBO) for the scorecard (as long as a cost estimate for the legislation has been produced). Therefore, OMB’s opinion on how the sequester would work matters a great deal.
OMB is suggesting that if the bill is not signed until January the budgetary effects will not be entered onto the scorecard until the next session of Congress.
Because the sequester order is based on an annual report issued by OMB “not later than 14 days” after the closing of a Congressional session based on legislation enacted in the last session, the budgetary effects wouldn’t technically be entered onto the scorecards in time to trigger a sequester in 2018.
Whether OMB’s interpretation is correct may be debatable. However, it does seem possible that the President can prevent a sequester in 2018 even without a PAYGO waiver.
Update: Congress included language on a short-term continuing resolution that passed both chambers December 21st that excludes the budget effects of the tax bill on the PAYGO scorecards. Senator Paul (KY-R) raised a point of order on the language. However, that point of order was waived by a vote of 91 to 8 (only 60 votes were required to waive).