September 22, 2020
What to expect in Washington (September 22)
The House may vote as soon as today (September 22) on a Democratic continuing resolution ("CR," H.R. 8319) to:
Speaker Nancy Pelosi (D-CA) said yesterday: "The Continuing Resolution introduced today will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year. As part of the CR, Democrats are proud to include provisions that save America's seniors from an up to $50 per month Part B premium hike. The CR also includes a one-year surface transportation authorization extension, preventing disruption to America's communities."
The action doesn't mean the funding issue is close to being resolved. Efforts to extend government funding beyond September 30 had been proceeding on a bipartisan basis before falling apart September 18. The House bill released yesterday omits $30 billion in aid to farmers (via the Commodity Credit Corporation (CCC)) sought by the White House that was being considered in exchange for pandemic-related food assistance for children sought by Democrats, which was also left out of the House package.
Republicans were critical of the House bill. Senate Majority Leader Mitch McConnell (R-KY) tweeted yesterday, "House Democrats' rough draft of a government funding bill shamefully leaves out key relief and support that American farmers need. This is no time to add insult to injury and defund help for farmers and rural America." Senate Finance Committee Chairman Chuck Grassley (R-IA) tweeted: "HOGWASH alert: House Dems filed funding bill notably excl Commodity Credit Corp $$. Replenishing CCC has long been noncontroversial &is necessary support 4our farmers House Dems shld b ashamed for leaving our farmers in the lurch Sen Ernst & I hv ur back + will fight for farmers"
How and when the situation gets resolved is unclear, though there are indications that talks to add the farm and food aid have been revived. The contents of the bill represent the only must-do items facing Congress prior to the election, and partisan tensions have flared generally with the fight over handling of the Supreme Court vacancy. There is broad interest in avoiding a shutdown, though. National Economic Council Director Larry Kudlow said on Fox News yesterday, "I think the most immediate issue fiscally is to get a clean continuing resolution, make sure we keep the government open through the September 30 date."
A major question facing Congress has been whether Senator McConnell has sufficient support from his members to hold a vote on the Supreme Court vacancy prior to the election, or at least this year. Yesterday, Senator Cory Gardner (R-CO), who is in a tough re-election race against former Gov. John Hickenlooper, released a statement saying he "will continue to support judicial nominees who will protect our Constitution, not legislate from the bench, and uphold the law. Should a qualified nominee who meets this criteria be put forward, I will vote to confirm." Senator James Lankford (R-OK) added his name to the list of those supporting a floor vote this year, as did Senator Mitt Romney (R-UT).
"We've got the votes to confirm Justice Ginsburg's replacement before the election," Senator Lindsey Graham (R-SC) said on Fox News last night.
President Trump tweeted this morning: "I will be announcing my Supreme Court Nominee on Saturday, at the White House! Exact time TBA."
Should Democratic nominee Joe Biden win the election, a major question is whether Democrats will move to eliminate or modify the Senate filibuster to more easily move on agenda items. An NBC News reporter tweeted that Senator Dianne Feinstein (D-CA) does not favor filibuster repeal, saying: "I don't believe in doing that. I think the filibuster serves a purpose. It is not often used, it's often less used now than when I first came, and I think it's part of the Senate that differentiates itself."
President Trump will speak in Moon Township, Pennsylvania, today. The White House announced that President Trump will visit Charlotte, in election battleground North Carolina, on Thursday to discuss his healthcare vision for the nation. "Among the topics to be discussed will be the administration's work to improve care for seniors, signing an executive order to protect and improve the Medicare program, and easing access to innovative technologies," said the North State Journal. "Also among the topics for the visit will be the President's action to bring transparency to healthcare and affordable insulin to those in need."
Democratic nominee Biden is also planning an area campaign stop, the paper reported.
In Wisconsin yesterday, Biden, in addition to criticizing President Trump's handling of the coronavirus pandemic, expanded upon an everyday-American theme of his campaign, challenging the Ivy League pedigree of the presidency, saying, "I say it's about time that a state school president sat in the Oval Office because you know what? If I'm sitting there, you're going to be sitting there, too." He later tweeted: "Donald Trump ran for office saying he would represent the forgotten men and women of this country — and as soon as he got in office, he forgot about us."
A New York Times story on the fate of the Affordable Care Act in light of the Supreme Court vacancy — oral arguments in a case to unwind the ACA, addressing the Tax Cuts & Jobs Act's effect on the individual mandate, start November 10 — suggested, "If a new justice is not confirmed and seated by then, the case will be decided by the remaining eight members. A ninth justice who joined the court after oral arguments but before a decision would still not cast a vote."
The Congressional Budget Office (CBO) released the 2020 Long-term Budget Outlook, showing: deficits increase from 5% of GDP in 2030 to 13% by 2050; and federal debt held by the public, already projected to equal 98% of GDP this year, will increase to 104% of GDP in 2021, 107% of GDP (the highest amount in the nation's history) in 2023, and 195% of GDP by 2050.
In another report, CBO said "climate change will, on net, reduce average annual real GDP growth by 0.03 percentage points from 2020 to 2050, relative to growth that would occur under the climatic conditions that prevailed at the end of the 20th century."
The Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) has completed its review of: a final rule on Allocation & Apportionment of Deductions & Foreign Taxes, Foreign Tax Redeterminations, FTC Disallowance Under 965(g), Consolidated Groups, Hybrid Arrangements & Certain Payments under 951A; and a proposed rule on Guidance Related to the Foreign Tax Credit, Clarification of Foreign-Derived Intangible Income [TCJA].
On Friday, September 25, is the EY Webcast, "Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments," at 12:00 p.m. ET. The coronavirus (COVID-19) and the resulting economic crisis have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) the US legislative and economic landscape; (ii) breaking developments — federal and state; and (iii) what's happening at the IRS. Register.