×

UPDATE 2-Pence goes to Capitol Hill as lawmakers work on tax bill

(Adds letter on advertising deductions in 15th paragraph)

WASHINGTON, Oct 31 (Reuters) - Vice President Mike Pence will meet with lawmakers on Capitol Hill on Tuesday as Republicans grappled with key provisions in the tax cut bill and lobbyists expressed concern that a bill might not be ready by a self-imposed deadline.

Asked if Republicans would release a bill or a detailed summary by their Wednesday target, House of Representatives Ways and Means Committee Chairman Kevin Brady said, "Our plan right now is the bill."

He said the number of unresolved issues was "very, very few," but did not elaborate.

Other lawmakers and lobbyists, however, said major elements were up in the air.

Questions remained on tax deductions for business interest payments and state and local taxes, as well as proposals to change tax law on retirement savings and small business taxes, they said.

Any significant delay in unveiling a bill could jeopardize the Republicans' goal of getting it through Congress and onto President Donald Trump's desk before January 2018.

Pence planned a series of meetings with lawmakers on Tuesday as they scrambled to work through the remaining issues.

In an effort to fulfill 2016 campaign promises and score their first significant legislative achievement since winning the White House and majorities in Congress, Trump and the Republicans have vowed to enact the first comprehensive tax reform since 1986.

But their plan for up to $6 trillion in tax cuts for businesses and individuals over a decade faces challenges, not only from Democrats, but from rank-and-file House Republicans.

One example is whether to keep the popular tax deduction for state and local tax (SALT) payments. Over the weekend, Brady said he would preserve the deductibility of property taxes under a potential deal with lawmakers from high-tax states such as New York and New Jersey who oppose ending the SALT deduction.

Analysts say eliminating the SALT deduction would disproportionately hit upper middle-class families in high-income tax states. Republicans from those states alone are numerous enough to derail tax legislation.

Republican Representative Tom Reed of New York said discussions were still "too fluid" on a possible compromise to preserve the deduction for property taxes but end the tax break for state and local income taxes. "Got to look at the numbers," Reed said.

Treasury Secretary Steven Mnuchin and Gary Cohn, director of the National Economic Council, appeared sympathetic to the concerns of Republican members of Congress from New York about losing the SALT tax break during a conference call on Monday night, Fox Business Network reported.

The administration officials told the lawmakers they would get back to them with a compromise in a few days, according to the report, which cited people familiar with the matter.

Also on Monday, a bipartisan group of 15 senators sent Senate leaders a letter opposing any tax reform measure that would prevent businesses from being able to fully deduct the costs of advertising in the year they are incurred.

A lobbying coalition for state and local governments, real estate interests and public unions said over the weekend that the Brady compromise would "unfairly penalize taxpayers in states that rely significantly on income taxes."

Over the weekend, the National Association of Home Builders vowed to defeat the tax bill, saying it would double the standard deduction to $24,000 for married couples and sharply reduce the number of middle-class homeowners claiming the mortgage interest deduction, raising home ownership costs. (Reporting by David Morgan and Amanda Becker; Editing by Kevin Drawbaugh, Mary Milliken and Jeffrey Benkoe)