January 21, 2021
What to expect in Washington (January 21)
Joe Biden is president and Kamala Harris is vice president and the tiebreaking vote in the Senate now that three new Democrats have been sworn in (Padilla, to replace her, plus Ossoff and Warnock from the Georgia special elections), making Senator Chuck Schumer (D-NY) the majority leader. Tax news this morning: Mark Mazur, "the top Treasury Department tax-policy official during the Obama administration, is heading back into government temporarily" and "will work until the Senate confirms someone for his old job: assistant secretary for tax policy," the Wall Street Journal reported.
With Democratic control in Washington cemented, the next question is how, and how soon, they can act on Biden's $1.9 trillion COVID/stimulus plan and the rest of his agenda. Politico reported January 20 that the Administration (possibly NEC Director Deese) will soon meet with a bipartisan group of centrist senators who jumpstarted COVID relief negotiations late in 2020. The meeting may happen over the weekend, according to Senator Joe Manchin (D-WV), a key moderate who late last week affirmed his aversion to acting through the budget reconciliation process, preferring a bipartisan approach.
During a first briefing, White House Press Secretary Jen Psaki said the Administration is "not taking any tools off the table for how the … House and Senate can get this urgent package done" when asked how long they will wait for Republican support to materialize before turning to reconciliation for the $1.9 trillion plan.
A third option — #1 is a big bipartisan bill, #2 is a partisan reconciliation bill — is #3, "a bipartisan bill to dole out quick cash for vaccine distribution and $1,400 stimulus checks that would cost far less than the $1.9 trillion package that Biden initially sought," Politico said. Some senators have called for a checks-only bill.
Bloomberg reported centrist Republican Senators Mitt Romney (R-UT) and Lisa Murkowski (R-AK) as skeptical of quickly passing $1.9 trillion on COVID relief after just enacting $900 at the end of 2020:
Senators Schumer and Mitch McConnell (R-KY) have yet to reach a power-sharing agreement given the 50-50 Senate split, with McConnell seeking agreement that the "legislative filibuster remain intact, specifically during the power share for the next two years," an aide said. A meeting yesterday didn't produce a deal.
A Senate vote on the nomination of Janet Yellen to be Treasury Secretary will wait until at least next week, Reuters reported. Top Democrats had pushed for the vote to occur today (Thursday). Finance Committee members' questions for the record (QFR) were due COB yesterday and Yellen must respond (one QFR was from Senator Grassley on digital services taxes). The Finance Committee will vote on Friday. For historical reference, Steven Mnuchin was confirmed February 13, 2017; Timothy Geithner was confirmed January 26, 2009.
Biden announced acting agency heads until secretaries are confirmed, including, at Treasury, Andy Baukol.
Treasury announced some senior staff.
House Ways & Means Committee Chairman Richard Neal (D-MA) announced that Select Revenue Measures Subcommittee Staff Director Aruna Kalyanam will join Treasury's Office of Legislative Affairs as Deputy Assistant Secretary for Tax and Budget.
President Biden signed several "Day One" executive actions, and more are on tap today addressing safe reopening of schools and businesses, including by expanding testing, protecting workers, and establishing public health standards.
Yesterday's actions include:
The Administration also ordered a regulatory freeze.
Pursuant to orders yesterday, CDC Director Walensky tweeted in part "I will extend the order halting residential evictions until at least 3/31/21," and the acting Education secretary announced an extension of the pause on federal student loan payments and collections and keeping the interest rate at 0%.
Prior to leaving office, President Trump "struck down his 2017 executive order that had blocked administration officials from taking lobbying jobs for five years after leaving office," the Wall Street Journal reported.
This Friday, January 22 (12:00 p.m. ET), is the EY Webcast, "Tax in the time of COVID-19." 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.