March 22, 2021
What to expect in Washington (March 22)
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:
Hearings this week include:
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 2nd 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 (5th 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:
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.