December 14, 2020
What to Expect in Washington (December 14)
This week again begins with members of Congress and the President facing an expiration of government funding on December 18 and pressure to reach agreement on additional coronavirus spending that could be attached to an omnibus appropriations bill to provide funding through the end of the fiscal year. If a coronavirus agreement is reached, other items including tax provisions could potentially also be attached to a year-end bill. Senate Majority Leader Mitch McConnell (R-KY) has suggested the controversial issues of state and local government funding and liability protections be kept out of year-end discussions, and there are new signs that approach could be considered.
The bipartisan Senate group that has been filling out details of a $908 billion compromise coronavirus spending proposal plans to release a full plan today, with the state and local and liability pieces kept separate from the $748 billion in less controversial provisions. On CNN December 13, House Majority Leader Steny Hoyer (D-MD) suggested Democrats could accede to dropping state and local funding, saying, “the legislative process is a give and take … and although I think state and local assistance is critically important, the others are critically important too. We have millions of people who are at high risk… We need to act, and if acting means that we are not going to get everything we want… life is a series of trade-offs and gives and takes, but we need to make sure that we get the very important health, unemployment, small business, vaccine delivery dollars, school dollars, child care dollars, all of which are in the agreement” taking shape by the bipartisan group of senators.
During a December 13 call with Treasury Secretary Steven Mnuchin, however, House Speaker Nancy Pelosi (D-CA) continued to push for state and local funding and “reiterated her view that a compromise on the liability issue should be found that does not jeopardize workers’ safety,” an aide tweeted. She also “raised the recent bipartisan, bicameral agreement on surprise billing and the bipartisan support for its inclusion in the omnibus agreement.” (An agreement was announced December 11.) They are set to talk again today.
There is no certainty that dropping state and local is an approach that will be backed fully by Democrats or that doing so will allow a bill to advance, but several CARES Act relief programs expire near or at the end of the year and there is also pressure on providing funding for vaccine distribution. Other moving parts include Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) trying to secure a vote on another round of $1,200 stimulus checks, and Sanders saying on the Senate floor that he won’t back down as he did last week. “Maybe we’ll have Christmas Eve together,” he told reporters.
The Washington Post reported Friday night: “As Congress voted to keep government agencies funded for another week, lawmakers began admitting something that was painfully obvious: They aren’t very likely to meet next Friday’s deadline, either.” No indication of how long things go if a year-end bill isn’t wrapped up December 18.
There have been indications that House and Senate tax-writers have readied an agreement for tax extenders and tax-related coronavirus provisions should the larger deal come together.
Electoral college – The Electoral College will meet today to formally cast their ballots for President and Vice President.
Tax - Public comments on the BEPS 2.0 Pillar 1 and Pillar 2 blueprints are due by December 14.
The Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) has completed review on a final rule on “Section 451(b) Requirements [TCJA].”
On Friday, December 18, is the EY Webcast, “Tax in the time of COVID-19,” at 12:00 p.m. ET. The coronavirus (COVID-19) and the resulting economic crisis – all occurring in an election year – have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) Elections, US economy and tax policy; (ii) What’s happening at the IRS; and (iii) Breaking developments. Register.