Tax Credits Blog

Elections Improve WOTC Position in Congress

Democrats’ taking control of the House increases the odds of winning permanent WOTC in the new Congress that’s seated in January.


Current Ways and Means Chairman Kevin Brady will become the ranking member of Ways and Means, and Congressman Richard E Neal (D-MA), the present ranking member, will take the chair.


Contrasted to Congressman Brady’s declared aim to end WOTC, Chairman Neal and committee Democrats rallied around Congressman Ron Kind’s amendment to make WOTC permanent during markup of tax reform last year.


Now Democrats will form the majority of Ways and Means in the 116th Congress and Chairman Brady may be leading the minority without two strong allies, Dave Reichert (R-WA) who is retiring, and Peter Roskam (R-IL) who is in a race too close to call.


Overall, we can expect a favorable attitude toward WOTC by Ways and Means Democrats provided we continue to stress its effectiveness and stick to evidence-based statements when communicating with members and staff.


We don’t know who’ll form the leadership of the House next year—there may be a challenge to Minority Leader Pelosi.  However, we can be confident the Ways and Means tradition, of advancing by seniority, means that Congressman Neal will succeed to the chair and currently-serving Democrats will retain their seats.


In sum, the odds have improved significantly for winning permanent WOTC when 116th Congress takes up an extender measure next year, when several tax provisions including WOTC expire. 


This doesn’t mean our job will be easy.  Democrats who voted against the tax cuts of TCJA made hay during the election by denouncing the resulting budget deficits; they’ll make deficit reduction a top priority when they take charge of the House.  In that situation, Congress chose in the past to extend WOTC a few years at a time, impairing its effectiveness over the years.


Congress returns on November 13th to take up a “technical corrections and extenders” bill to deal with expired tax provisions, including  Empowerment Zone employment credit and Indian employment tax credit.  Members should also continue pressing the case for applying WOTC to the recent hurricane disaster areas, to the new Opportunity Zones, and to repeal the BEAT tax or remove its impact on WOTC.