There is no business on the House floor this week, though, while we are in between major legislative efforts (post-American Rescue Plan, pre-Build Back Better), it’s an important week for hearings in both the House and the Senate, where there is also floor action on the Paycheck Protection Program bill and nominations. After this week, both chambers will be out for a two-week district/state work period, until mid-April.

The Senate will vote on Marty Walsh to be Labor Secretary this evening. Procedural steps have been taken to set up votes this week related to:

• the House-passed PPP Extension Act of 2021 (H.R. 1799) to extend the PPP application deadline from March 31 to May 31 and require the SBA to process applications by June 30;
• the nominations of
  • Adewale Adeyemo to be Deputy Secretary of the Treasury;
  • Shalanda Young to be Deputy Director of the OMB;
  • Rachel Leland Levine to be Assistant Secretary of Health and Human Services;
  • Vivek Murthy to be Surgeon General (previously held the position 2014 - 2017); and
  • David Turk to be Deputy Secretary of Energy.   

Hearings this week include:

• Tuesday, March 23 (10:00 a.m.), House Ways & Means Committee “Members’ Day” hearing that press reports suggest is on infrastructure;
• Tuesday, March 23 (10:00 a.m.), Senate HELP subcommittee, “Why Does the US Pay the Highest Prices in the World for Prescription Drugs?”;
• Tuesday, March 23 (12:00 p.m.), House Financial Services, “Treasury Department’s and Federal Reserve’s Pandemic Response” with Secretary Yellen and Fed Chairman Powell;
• Wednesday, March 24 (10:00 a.m.), Senate Banking, “The Quarterly CARES Act Report to Congress,” with Secretary Yellen and Fed Chairman Powell;
• Thursday, March 25 (9:30 a.m.), Senate Finance on the impacts of US international tax policy on American jobs;
• Thursday, March 25 (11:00 a.m.), Senate Budget, “Ending a Rigged Tax Code: The Need to Make the Wealthiest People and Largest Corporations Pay their Fair Share of Taxes”;
• Thursday, March 25 (11:00 a.m.), House Transportation & Infrastructure, “The Administration’s Priorities for Transportation Infrastructure” with Secretary Buttigieg; and
• Thursday, March 25 (1:00 p.m.), Ways & Means subcommittee, “Examining Private Equity’s Expanded Role in the U.S. Health Care System.”

Ahead of the Senate Finance international tax hearing, the staff of the Joint Committee on Taxation late Friday released a document discussing the legal and economic background of US taxation of cross-border activity, with particular attention on provisions newly enacted or substantially revised in the TCJA. The document also summarizes international efforts to address tax challenges of the digitalization of the economy, and the implications for the United States.

Build Back Better – Politico reported that top House Democrats are contemplating addressing drug pricing and climate policy goals in the Build Back Better plan under the budget reconciliation process that, once Congress agrees to an FY2022 budget resolution, would allow simple majority passage in the Senate. “Sweeping immigration bills are also on the wish-list for many members, with Democrats eager to fit what they can in Biden’s next high-profile package — which could be the party’s last shot at using the budget tool before the midterm elections…” the report said. “House Democrats are in discussions about including two of the caucus’ signature bills — one, a drug pricing bill known as H.R. 3, and another a sweeping green infrastructure bill known as H.R. 2 — as part of the next reconciliation package…”

Congress – The March 20 Louisiana special election to fill the seat of Cedric Richmond (who joined the Administration) is headed to an April runoff between the top two candidates, State Senators Troy Carter (36%) and Karen Carter Peterson (23%), both Democrats. The New York Times observed that the 2^nd district is the state’s only Democratic representation in Washington – both senators and all other congressmen are Republican – and who ultimately wins will have some sway “over how Louisiana benefits from the infrastructure bill that is among the next priorities for President Biden. And few regions in the country have the varying needs of South Louisiana, with its dependence on two sectors of the economy that suffered heavily from the coronavirus: tourism and oil and gas.” In the other special election (5^th district), Republican Julia Letlow was elected to the seat won by her late husband, who subsequently passed away.

The other open seats are those of:

• the late Rep. Ron Wright (R-TX), May 1 special election;
• Rep. Deb Haaland (D-NM), now Interior Secretary, June 1 special election; and
• Rep. Marcia Fudge (D-OH), now HUD Secretary, November 2 special election.

With four vacancies, the ratio is 219 Democrats, 212 Republicans. If the seats stay same- party, the ratio would be 222-213, the narrowest House margin since the 107th Congress (2001 - 2003).

Tax – A New York Times editorial over the weekend focused on the tax gap, or difference between taxes owed and paid, discussing a plan by former IRS Commissioner Charles Rossotti and others to have the government “require banks to produce an annual account statement totaling inflows and outflows, like the 1099 tax forms that investment firms must provide to their clients.” The forms would be required only for people with taxable income above a threshold, and progressive Rep. Ro Khanna (D-CA) has a bill setting it at $400,000. Rossotti wrote about the tax gap in a November 2020 Tax Notes article with former Treasury Secretary Larry Summers and UPenn’s Natasha Sarin, now Deputy Assistant Secretary for Microeconomics.

In today’s Wall Street Journal: “The top sliver of high-income Americans dodge significantly more in income taxes than the Internal Revenue Service’s methods had previously assumed, according to forthcoming estimates from IRS researchers and academic economists. Overall, the paper estimates that the top 1% of households fail to report about 21% of their income, with 6 percentage points of that due to sophisticated strategies that random audits don’t detect.”

Health – On March 19, Rep. Cindy Axne (D-IA) introduced H.R. 2079 to provide that CARES Act Provider Relief Fund payments are not includible in gross income. 

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