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It's a big week for the 117th Congress, which convened for the first time on Sunday, January 3. Nancy Pelosi (D-CA) was re-elected House Speaker. Control of the Senate won't be known until the two January 5 runoff elections are decided. About a dozen GOP senators and dozens of House Republicans are planning to challenge some states' electoral votes when Congress meets January 6 to certify President-elect Joe Biden's victory. (The House and Senate must vote separately to accept or reject any objections.)

The January 3 Washington Post explained: "[I]f members from both the House and the Senate object to the electoral college slates, both chambers must debate and then vote on the contest. The Republicans' plans to muddy up the proceedings could force Wednesday's ceremony to go all night and into the next morning. For each successfully contested state, the joint session must recess, allowing the House and Senate to individually debate up to two hours and then vote on the challenges."

Regarding the January 5 Georgia runoff elections, the polls are close, and an enormous amount of money has been spent. Both Biden and President Trump are campaigning there today (Monday).

The Senate isn't scheduled to be in session prior to Inauguration Day aside from the January 6 certification, meaning the chamber may not get much of a head start in considering President-elect Biden's nominees. The current party ratio is 51 Republicans, 48 Democrats. Senator David Perdue's (R-GA) term ended January 3, and his reelection will be considered in one of the two runoffs.

The House party ratio is 222 Democrats, 211 Republicans, with two vacancies attributable to an undecided race in New York and the passing of Rep.-elect Rep. Luke Letlow (R-LA). The chamber today will consider a resolution "Adopting the Rules of the House of Representatives for the One Hundred Seventeenth Congress," with changes including limiting the Motion to Recommit procedural tool to eliminate the minority party's ability to include instructions back to a committee, which can pose difficult votes for the majority. A Motion to Recommit without instructions would remain.

Tax

The Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) completed review on a final rule on "Limitation on Deduction for Business Interest Expense [TCJA]" on December 30. A final rule on "Credit for Carbon Oxide Sequestration [TCJA]" cleared OIRA December 31. "Guidance Under Section 1061 [TCJA]," addressing carried interest, remains under review.

The latest in the webcast series, "Tax in the time of COVID-19," is this Friday, January 8, from 12:00-1:00 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.

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