Accounting

Guide to TCJA extension for financial advisors and clients

Published

2 months ago

March 4, 2025

The slim margins, trillions of dollars in tax cuts at stake and key missing details add up to great reasons for financial advisors and their clients to contact their members of Congress.

“Now’s the time to be doing it, because they’re starting to put together the legislation now,” said Mary Burke Baker, a government affairs counselor and the leader of the tax policy practice of law firm K&L Gates. “It’s important to let them know what’s important.”

That’s because every Republican member of Congress could exercise outsize influence on the process as President Donald Trump’s party extends the expiring provisions of the 2017 Tax Cuts and Jobs Act. Even though no one expects any steep tax increases as Congress confronts its year-end deadline, Burke Baker acknowledged that it “has to be difficult to advise clients to the extent that you can advise clients” on questions that may affect their payments to Uncle Sam — without any definitive answers until the passage of a bill that has yet to be written.

The elusive law appears far away from the finish line. Republicans are debating among themselves about how much they are willing to expand the federal budget deficit and whether they should pursue other priorities first. The intraparty squabbling could even provide an opening for Democrats to change the entire equation, if Trump, House Speaker Mike Johnson and Senate Majority Leader John Thune fail to align the GOP behind a way forward.

As they aim to prepare clients’ for the unknown possible impacts to say, estate taxes, deductions for state and local duties, Trump’s campaign promises or any number of other wish-list items among various constituencies, advisors could drive themselves crazy trying to stay abreast of every phase of an inevitably complicated political endeavor.

Instead, they should be counseling clients about “avoiding the temptation to act based on the news” of any particular day in the Beltway, said Ben Henry-Moreland, a former advisor who’s a senior financial planning nerd with the Kitces.com blog. While he said he doesn’t see “a high probability” that the current exemptions to the estate tax might revert to a lower level, Henry-Moreland suggested that advisors discuss the possibility with clients and prepare any necessary documents before December, just in case. If there are alterations to estate taxes in particular, they could find it incredibly difficult to draft new documents in a rush.

“It’s not necessarily, ‘Oh, here’s what X and Y congressmen are saying,’ but more, ‘Let’s take the big picture and figure out, is it really going to help you to act based on what you’re hearing on the news now, versus waiting until we’re going to know a little bit more?'” Henry-Moreland said. “Otherwise the documents can go in the shredder. It’s good to have some amount of flexibility, but you probably don’t want to make too many commitments yet.”

Pressing numbers

At this point, Trump and Congressional GOP leaders are also looking for leeway as they search for common ground on the cost of the legislation, possible tax expenditures that add to it or potential spending cuts that take away from it. To pass the law, they must navigate any number of twists and turns in coming months, with detours to keep every faction aboard and moving on a budgetary path that hasn’t even been laid out. For advisors and clients wondering how they’ll get to the ultimate destination, Republicans have barely embarked on their journey.

House and Senate budget resolutions tabbed the cost of tax legislation at north of $4 trillion over the next decade, but Trump’s plans may come with a price tag between $5 trillion and $11.2 trillion. Even if lawmakers let the Tax Cuts and Jobs Act provisions expire, the national debt is on pace to top its prior record of 106% of gross domestic product in 2029 and trigger so-called bond vigilantes’ ever-higher interest rates that would curtail economic growth. The arguments that new tariff revenue or higher federal receipts due to economic expansion from the tax cuts hold more sway among the White House and its allies than with budgetary experts.

To the toughest fiscal watchdogs, the mere $2 trillion in spending cuts over a decade in the House budget plan would only amount to a quarter of the necessary reductions, according to Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a bipartisan-led nonprofit policy research organization.

“For anyone who has made the case they support lower government spending, this is a pretty puny number, which is pretty darn close to a rounding error,” MacGuineas said in a statement. “It would be far better to use these savings as part of a larger debt reduction deal than to offset tax cuts. We have cut taxes and increased spending year after year since the last budget surplus in 2001, which is how our debt got so out of control. Lawmakers now need to face the reality that we should be adopting a debt deal rather than pursuing tax cuts or spending increases.”

But Republicans are not likely to abandon the main tax plank of their official campaign platform. In a speech on economic issues last fall, Speaker Johnson vowed to “keep those cuts in place to support job creation, along with the doubled guaranteed deduction and a strong child tax credit.” Last month, Majority Leader Thune introduced a bill called the “Death Tax Repeal Act” while expressing the hope that Congress “will not merely extend this exemption, but that we will get rid of this fundamentally flawed tax once and for all.”

Trump pledged frequently on the campaign trail to extend and expand the tax cuts, but the lofty goals of his administration and those of Trump’s allies in the conservative Project 2025 blueprint are now facing the political and fiscal calculus of passing major legislation through Congress. Trump has displayed a willingness to separate taxes from other legislative priorities, even if he has a clear preference.

“Well, I like one big beautiful bill. I always have. I always will. But if two is more certain, it does go a little bit quicker, because you can do the immigration stuff early,” he said in January.

Devil in details

Despite some earlier talk of passing the legislation by May, the “latter half of the year” sounds like a much better estimate for the timing, according to Erica York, the vice president of federal tax policy at the nonpartisan, nonprofit Tax Foundation’s Center for Federal Tax Policy.

“Congress tends to act at the last minute,” York said. “In an ideal world, we would get this taken care of very quickly, in a fiscally responsible way, so that people would have the certainty to make decisions. I think this will be a very long, drawn-out process, given the slim majority in the House.”

And the cost could balloon well above $7 trillion, if lawmakers include Trump’s other priorities such as ending taxes on tips and Social Security benefits or creating a deduction for the interest on auto loans for American-made cars, according to Jonathan Traub, a managing principal and the leader of the Tax Policy Group at consulting and professional services firm Deloitte Tax. In their recipe for tax cuts and spending pullbacks that go far beyond any undertaken by Elon Musk’s efforts, lawmakers are effectively trying to come up with a solution to the problem of, “‘How do you fit 7 trillion pounds of sugar into a $2 trillion sack,'” Traub said.

Take the deduction for state and local taxes, which, conveniently, is often referred to as SALT. Currently, taxpayers may deduct up to $10,000 — a level that Republicans from high-tax states such as New York and California say is too low. Trump, Johnson and Thune will need nearly all of those votes to pass the bill if they are going to do so without any Democrats’ support.

Using figures and policy options from guidance document compiled in January by Republicans on the House Ways and Means Committee, lawmakers could: double that limit for married couples at a cost of $100 to $200 billion over a decade; boost it to $15,000 for individuals and $30,000 for married couples ($500 billion); make only property taxes deductible but eliminate deductibility for income and sales taxes ($300 billion); get rid of the deduction for corporations to create $310 billion in savings against the cost; or eliminate the SALT deduction entirely to raise $1 trillion in revenue over a decade.

The issue “breaks down on regional lines” rather than ideological ones, which explains why the SALT discussion has been so hard for leaders of both major parties, Traub said.

“I don’t envy anybody in that process,” he said. “It’s a really difficult challenge. It has vexed leaders for years, and it will keep vexing them this year, as well.”

The idea of repealing the tax credits for green energy investments that President Joe Biden and the Democrats put in place through the Inflation Reduction Act could deliver savings of $800 billion and fit nicely into the Trump administration’s stated goal of slashing government spending for climate change. However, that may threaten manufacturing jobs and other economic benefits connected to projects in many Republican districts, according to Joe Hughes, a senior analyst for the Institute on Taxation and Economic Policy, which provides “data-driven recommendations to shape equitable and sustainable tax systems.” So cutting them could be tricky, as well.

“It would only pay for maybe about a third of the tax cuts to the wealthy,” Hughes said. “That issue is going to be awkward for Republican lawmakers, but I would highlight that as the biggest pay-for that they can come up with.”

What to watch in coming months

For policy experts, the next important step will come with the requirement that Congress must agree to “identical budget resolutions” in both chambers, with instructions about whether the Senate will take up one or two bills subject to so-called reconciliation bills, Burke Baker said. That’s a Senate procedure enabling the passage of a bill with only a majority of 51 votes, rather than the 60 necessary to overcome a filibuster.

With Trump’s support, the House GOP is pursuing a “one big, beautiful bill” strategy encapsulating tax cuts as well as border security and other priorities. Republicans in the Senate are pushing for two reconciliation bills, which would delay passage of any tax legislation until later in the year. Burke Baker and other experts say that the longer it takes for the two chambers to reach agreement on a budget resolution, the more likely it will be for the Senate to prevail in waiting on the tax cuts until later in the year.

“It’s going to be difficult, even if both chambers were really rowing in the same direction,” she said. “It’s just a terribly complicated topic, and, if any of these issues were easier, they would have been taken care of earlier, and we wouldn’t even be talking about them right now.”

The procedural and policy topics could morph the debate into something altogether different if they stretch longer into the year. Otherwise, any tax changes are likely to fall “mostly on the corporate side” rather than on provisions affecting individual retail wealth management clients, Traub said. To him, repeal of green energy credits and deductions for corporate SALT and highly paid executives or an excise tax on stock buybacks would be more probable than any shifts in policies for municipal bond investments or mortgage interest.

If the Republican talks fall apart completely and lawmakers face the prospect of raising taxes in the year of a midterm election, the deduction for qualified business income for pass-through entities or even higher rates for some taxpayers could come up for debate if any Democrats’ votes are required for passage, Traub said.

“There’s a variety of things they could demand,” he said. “The universe of what is possible becomes quite a bit more dramatic.”

The bottom line

That scenario would represent a shocking outcome, though, for advisors and clients who don’t have much reason to expect a big tax hit from the legislation. Wealthier households will get more benefits from extending the expiring Tax Cuts and Jobs Act provisions than those with less than $400,000 in annual income. In a parallel universe, proposals such as raising corporate tax rates, placing foreign income of U.S. corporations in the same bracket as their domestic earnings or repealing the “Gingrich/Edwards loophole” may be on the table, Hughes said.

“There are plenty of options out there, and those are the sort of things that Republicans would be looking at and discussing if they were remotely serious about some sort of deficit-neutral tax reform,” he said. “There’s no goal of actual tax reform or of really helping the middle class here. The main goal here is to provide tax cuts to very wealthy individuals.”

Regardless, the complexities signal that there is “a good chance at this point” that passage of any bill waits until December, according to Henry-Moreland. Republicans won the trifecta with control of both houses of Congress and the White House, but passing a law entails much more than a simple agreement to push back the sunset date of the current rules under the Tax Cuts and Jobs Act or make them all permanent, he noted.

“I still don’t think that this bill is going to be a straight-up extension of TCJA. We have a different group of legislators, and we have different political and economic environments right now,” Henry-Moreland said. “There are so many moving pieces and so many different priorities right now. It’s going to be more of a TCJA replacement than an extension, per se.”

The debate currently revolves around factions among Republicans that are “pulling in the opposite direction,” with one seeking higher itemized deductions and the other trying to reduce the deficit, York said. The push-pull between them and Trump’s influence could leave advisors and their clients guessing until the end of the year.

“For each provision, you have a set of constituents who are vested in that provision existing, so it makes it politically difficult to say, ‘We’re going to cut it,” said York. “A dollar for something means a dollar less for something else.”

Accounting

AI great at simple tasks but struggles with complexity

Published

2 hours ago

May 9, 2025

Business Finance News

Artificial intelligence has indeed led tech-forward firms (including those in this year’s Best Firms for Technology) to be more efficient and productive in both client-facing and administrative tasks, but at the same time professionals have found the technology still struggles with precision and accuracy, which limits its usefulness for complex work.

On the positive end, firms such as the Texas-based Franklin Alliance reported that adopting AI technology has dramatically increased their capacities as bots take on repetitive manual tasks with an ease and a speed far past more conventional automation setups, allowing accountants to focus more on higher value tasks.

“What’s been most impressive about the AI tools we’ve explored is their ability to dramatically reduce the time spent on repetitive, manual tasks—things like document summarization, data extraction, and even early-stage tax prep. In the right context, these tools create real efficiency gains and allow our team to shift focus to higher-value advisory work,” said Benjamin Holloway, co-founder of Texas-based Franklin Alliance.

For some, like Illinois-based Mowery & Schoenfeld, these efficiencies have been most impressive on the internal administration side, with AI effectively taking care of the non-accounting work that nonetheless keeps many firms afloat, especially where it concerns meetings.

“Truly most impressive and a huge time savings for us has been AI’s ability to record and summarize Team meetings. Circulating notes and reducing administrative burden on such activities has freed up much capacity, both for our admin side and for partners or management who are not able to be at every meeting,” said Chris Madden, director of information technology.

Others, like top 10 firm Grant Thornton, emphasized AI’s benefits in client-facing activities and noted that it has been especially meaningful in its risk advisory services at least partially due to the firm’s recently-launched CompliAI tool, designed specifically for this area.

“The tool uses generative artificial intelligence and was developed using Microsoft technology, including Microsoft Azure OpenAI Service. CompliAI’s ability to quickly analyze vast datasets and identify potential risks has proven invaluable in combining Grant Thornton’s extensive global controls library with generative AI models and features, including AI analysis, ranking and natural language processing capabilities. As a result, our employees can run control design and assessment tasks in minutes, versus days or weeks. This means clients enjoy faster operational insights, which could amount to a new level of efficiency and a path toward transformative growth,” said Mike Kempke, GT’s chief information officer.

Another positive frequently mentioned, such as by top 25 firm Cherry Bekaert, has been the accessibility and ease of use for many AI solutions even for those without strong technical capacities. Assurance partner Jonathan Kraftchick said this means they did not need to wait long before they began seeing results.

“The most impressive aspect of AI has been its ability to add value with minimal ramp-up time. Many of the tools we’ve implemented have a low barrier to entry, allowing users to start experimenting and seeing results almost immediately. Whether it’s drafting content, conducting accounting research, summarizing meetings, normalizing data, or detecting anomalies, AI has consistently helped accelerate tasks and enable our teams to focus on higher-risk or higher-value areas,” he said.

Several firms, such as California-based Navolio & Tallman, also mentioned improvements to broad strategy and ideation, saying it’s been good for enhancing creativity and accelerating the early stages of their work.

“We’ve still seen value in AI as a jumping off point for ideas and strategy. It’s been helpful for brainstorming, drafting early versions of client communications, and supporting high-level planning conversations,” said IT partner Stephanie Ringrose.

Inconsistencies, inaccuracies, insufficiency, and insecurity

At the same time, firms over and over again said that while the strength of AI comes in handling simple jobs, it often lacks the precision and consistent accuracy needed for higher value accounting work. While it can certainly generate outputs at an industrial scale, trusting that those outputs are correct is another story for firms like Community CPA and Associates.

“AI is incredibly useful for certain types of tasks, such as summarization, data extraction, answering simple questions, drafting communications or documentation, brainstorming ideas, or serving as a sounding board. However, we have observed that most AI tools we’ve tried have difficulty with complex tasks that require lots of context, precision, or domain-specific knowledge. Oftentimes in these cases, AI tools will generate responses that are overly confident or wrong and are missing key information due to not being integrated with other systems or software we have,” said CEO Ying Sa.

Some, like top 25 firm Armanino, noted that these challenges mean that humans need to devote considerable time to ensuring the quality of AI outputs and intervening when the programs go off track.

“The primary disappointment stems from the occasional inaccuracies or biases inherent in AI-generated outputs, commonly referred to as ‘hallucinations,’ necessitating continuous human oversight to ensure reliability. Addressing these inconsistencies remains an ongoing challenge,” said Jim Nagata, senior director of cybersecurity and IT operations.

Top 25 firm Eisner Amper’s chief technology officer Sanjay Desai noted that these issues with accuracy and consistency can be found across AI solutions, though noted that the technology is still quite new and so many things are still in the process of being refined.

“The lows come from the gap between what’s possible and what works reliably in practice. We still need strong guardrails to define valid inputs and outputs, especially in sensitive use cases. Technologies like retrieval augmented generation (RAG) haven’t yet delivered the accuracy or consistency we need when working with proprietary or domain-specific data. Even in mature areas like audio-to-text transcription, we see issues—particularly with accurately identifying speakers in multi-person meetings, which affects the quality of recaps and follow-up actions. In short, while LLMs have come a long way, making them enterprise-ready still requires ongoing human oversight, thoughtful implementation, and continuous refinement,” said Desai.

Another issue reported by several firms was what firms like Navolio & Tallman saw as ongoing security risks from AI solutions that limits their ability to apply the technology to more sensitive use cases.

“The overall attention to security and privacy is still more limited than our industry requires, vendors have not yet aligned their pricing models with the impact their tools make to the business, and vendors still oversell their AI capabilities,” she said.

Top 25 firm Citrin Cooperman also noted–among other things–that the security of these solutions could stand to improve.

Another issue with AI that firms have reported is that solutions today don’t seem to integrate especially well with other programs, which limits the ability of these solutions to work across multiple systems in a single coherent workflow–under such conditions, AI solutions can wind up being siloed from the very areas it is needed the most.

“We believe one of the biggest gaps in current AI solutions is the inability to integrate into other AI solutions to work collectively across one process or workflow. There are many cases where one AI solution is very good at a specific task, while another is very good at another process or task, but the gap is the ability to integrate those solutions together to solve for an entirety of a process or a workflow,” said Brent McDaniel, chief digital officer for top 25 firm Aprio.

There is also the matter of data integration, which is needed for AI systems to gain a more holistic understanding of a firm’s needs. Without such integrations, AI becomes more limited in its ability to develop insights and provide actionable guidance, according to Tom Hasard, IT shareholder for New Jersey-based Wilken Gutenplan.

“We wish AI tools could fully synthesize all of our internal data and unique expertise—beyond the scope of general internet search—and provide detailed, context-specific answers for our team. In the near term, we envision an internal system that taps into our accumulated knowledge to assist staff in resolving complex client problems more quickly. Over time, this capability could be extended to give clients direct, on-demand access to our specialized insights, effectively scaling our expertise and delivering value in a more immediate and personalized way,” he said.

Beyond just data, lack of integration also limits the ability for AI to address complex problems due to lack of cross-disciplinary expertise, according to Kempke from Grant Thornton.

“Current AI solutions lack the deep cross-disciplinary expertise to be able to solve complex issues. AI today is optimized for specific fields and tasks but when it comes to solving problems that span multiple disciplines such as Tax, Legal and Finance, the current solutions are not yet capable of providing meaningful advice and guidance. Grant Thornton is already working with various AI partners on this issue and targets to be a very early adopter of the next iteration of AI that addresses this,” he said.

The AI wishlist

Many firms hoped that the next generation of AI solutions would address these sorts of problems in a way that will allow them to become true assistants capable of taking on complex tasks that require extensive judgment.

“We have found that AI currently lacks in the ability to replicate human creativity and complex decision-making. While AI excels at data analysis and task automation, it struggles with tasks requiring creativity and nuanced judgment. If AI could offer more sophisticated support in areas such as accounting and audit services, its value and impact in our daily lives would be significantly enhanced,” said Jim Meade, CEO of top 50 firm LBMC.

Desai, from Eisner Amper, also pointed out that AI isn’t very good at handling bad data, which is a problem considering that AIs run on data. This means that using AI effectively today still requires a great deal of data processing and sanitation to make information useful. If humans did not need to do so much manual cleanup to get data AI-ready, it would help make the technology even more efficient.

“One of the biggest gaps in AI today is its limited ability to handle bad data. Since data is the foundation of any AI strategy, it’s a challenge that most organizations still face— dealing with messy, inconsistent, or unstructured data. We wish AI could do more to identify, fix, and improve data quality automatically, instead of relying so much on manual cleanup,” said Desai.

Finally, Avani Desai, CEO of top 50 firm Schellman, said that AI needs to not only be safer, it needs to be visibly so, as trust and confidence in the technology is often key to adoption.

“I wish that AI could de-risk itself so that clients would be more open to using it and build client trust. If AI could more clearly demonstrate safety and responsible use, adoption would be much easier. Once people understand it’s here to help—and learn to use it responsibly—the fear will fade,” she said.

Accounting

Staten Island’s Malliotakis open to $30K SALT cap

Published

4 hours ago

May 9, 2025

Business Finance News

Representative Nicole Malliotakis said increasing the state and local tax deduction cap to $30,000 from $10,000 would reduce the tax burden of the vast majority of people in her district, indicating support for a proposal that is dividing Republicans.

“Every member needs to advocate for the particular needs of their district. Tripling the deduction to $30,000 will provide much-needed relief for the middle-class and cover 98% of the families in my district,” Malliotakis, a Republican representing Staten Island, New York and a member of the House tax committee, said in a statement to Bloomberg News on Friday.

Malliotakis’ nod of approval for a $30,000 SALT deduction cap comes as Republicans are fighting among themselves about how high to increase a tax break that has the potential to scuttle President Donald Trump’s entire tax package.

House Speaker Mike Johnson on Thursday said the $30,000 write-off limit is one of several options being discussed. That figure was rejected by several other New York Republicans, including Elise Stefanik, Nick LaLota, Mike Lawler and Andrew Garbarino. California’s Young Kim also rebuffed the idea.

Malliotakis’ district has less expensive property values and lower incomes than some of the other lawmakers pushing for a SALT expansion, making it politically viable for her to accept a lower cap than some of her colleagues.

White House Press Secretary Karoline Leavitt suggested on Friday that Trump would not weigh in on an appropriate level for a SALT cap, leaving it to lawmakers to resolve.

“There’s a lot of disagreement on Capitol Hill right now about the SALT tax proposal, and we will let them work it out,” she told reporters.

House Republicans’ narrow majority means that Johnson needs to win the support of nearly all his members to pass Trump’s tax-and-spending package.

Several of the SALT advocates have said that they are willing to block the bill unless there is a sufficient increase to the deduction. However, most members have not publicly stated how high the deduction must be to win their support.

The debate over SALT has proved to be a particularly thorny fight because it is a political priority for a small but vocal group of Republicans representing swing districts critical to the party maintaining a majority in the 2026 midterm elections.

Expanding the write-off is an expensive proposition, and Republicans have little fiscal wiggle room as they are sparring over ways — including cuts to Medicaid and levy hikes on millionaires — to offset the cost of the tax-cut package.

The House Ways and Means Committee is slated to consider the tax portion of the bill on Tuesday, including SALT changes.

Accounting

GOP eyes endowment tax hike in escalation of Ivy League feud

Published

5 hours ago

May 9, 2025

Business Finance News

House Republicans are considering increasing taxes on university endowments, a significant threat to some of the nation’s wealthiest schools as President Donald Trump seeks to tighten control over American higher education.

The measure is in a draft of the tax package Republicans are weighing, according to people familiar with the matter who spoke on condition of anonymity to share details on the effort. The proposal would create a tiered system of taxation so that wealthy colleges and universities pay more as the size of their endowment grows, the people said.

Republicans are considering boosting the 1.4% endowment tax currently on the books to rates as high as 14% to 21%, a person familiar with the matter said.

The bill is not finalized, however, the people cautioned, and the draft could change as Republicans negotiate its terms, a complex task as the party looks to renew and expand tax breaks and find ways to pay for them with only a narrow House majority.

Targeting university endowments would be a major escalation of Trump’s fight with elite colleges and universities, which has seen the administration demand changes to school policies that reflect his priorities.

The current tax on private-school endowments ensnares many of the richest universities, like Harvard University and Yale University, as well as smaller elite institutions such as Amherst College and Williams College. Some of the wealthiest private colleges in the country boast endowments of at least $500,000 per student.

Harvard, in particular, with a $53.2 billion endowment, has been locked in a high-stakes fight with the Trump administration over its demands for changes at the school. Harvard has sued several U.S. agencies and top officials for freezing billions of dollars in federal funding. Trump has also threatened the school’s tax-exempt status, though experts say revoking that designation would be a lengthy process involving the Internal Revenue Service and the courts.

A new poll by AP-NORC out Friday shows a majority of Americans disagree with Trump’s demands that higher-education institutions make curriculum and cultural changes or face the loss of federal funding for scientific and medical research or have their tax-exempt status threatened.

The poll found that 62% of Americans support maintaining federal research funding, 72% believe “liberals, students and professors can speak freely to at least some extent,” and 84% are concerned at some level about the cost of tuition, an issue Trump has not focused on.

Trump’s 2017 tax package, which Republicans are moving to renew, implemented an endowment levy of 1.4% on net investment income, similar to one that private foundations pay. That levy generated more than $380 million from 56 colleges or universities in 2023 — though it affected just a small fraction of the 1,700 private, nonprofit US schools.

House Budget Committee Chairman Jodey Arrington floated a long list of possible budget cuts in January that included raising $10 billion over 10 years by raising the endowment tax to 14%.

Discussions over the Republican tax package are reaching a critical stage. Trump is meeting Friday with the chair of the House Ways and Means Committee — the chamber’s tax-writing panel, according to people familiar.

Trump and Representative Jason Smith will discuss the draft proposal. The committee is expected to release parts of the bill later this afternoon and the rest of the draft on Sunday night or Monday, the people said.

One of the people familiar cast the effort as a bid by Republicans to ensure that universities spend their endowments on their students and not on other initiatives disfavored by conservatives, such as diversity, equity and inclusion efforts or on challenging the Trump administration’s policies.