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This week (August 2-6)

Congress: The Senate is in session, but the House has begun its August recess. The Senate may pass the Infrastructure Investment and Jobs Act and take up an FY2022 budget resolution.

Last week (July 26-30)

Infrastructure: The bipartisan infrastructure agreement cleared a second procedural hurdle in the Senate July 30 — a 66-28 vote on the Motion to proceed to H.R. 3684, the legislative vehicle for the Infrastructure Investment and Jobs Act — and the chamber may pass the bill the week of August 2, after debate and amendments. As outlined, the bipartisan package would provide $550 billion in new spending — which, combined with routinely authorized transportation funding, is $1 trillion over five years — offset predominately with unused COVID funds but also with new pay-fors like cryptocurrency IRS information reporting, so-called "pension smoothing," and a delay of the Medicare rebate rule. After a month of negotiations, sticking points like an infrastructure bank and tax gap funding were dropped, and transit money was pared back. "With the cooperation of our Republican colleagues, I believe we can finish the bipartisan infrastructure bill in a matter of days," Senate Majority Leader Chuck Schumer (D-NY) said July 30 (weekend votes are possible). In the face of criticism of the package, including from the Wall Street Journal editorial page, main negotiator Senator Rob Portman (R-OH) said in an op-ed that the deal averted the major tax increases President Biden proposed for infrastructure. House Speaker Nancy Pelosi (D-CA) has said she won't bring the bill to the floor until the Senate passes a Democratic only health/climate/education/care bill that has been envisioned to cost $3.5 trillion.

Cryptocurrency: On the cryptocurrency provisions, Politico reported that digital assets would be added to requirements for businesses to report cash payments above $10,000 to the IRS, and the definition of broker would be updated "to reflect the realities of how digital assets are acquired and traded." The provision has reportedly been scored as raising $28 billion over 10 years and is larger than the provision that was in the Treasury Green Book, which was scored as raising negligible revenue. A July 30 NYT story said: "A preliminary draft of the Senate legislation, which The New York Times obtained, has broader language than the Treasury Department's proposal. The administration's plan would apply new reporting requirements to cases in which taxpayers bought crypto assets from one broker and then transferred them to another broker. It would also apply to businesses that received crypto assets worth more than $10,000 … The Senate bill, which could still change, proposes similar reporting requirements but includes a broader definition of a cryptocurrency broker to mean anyone who facilitates transfers of digital assets." Bloomberg reported Senator Portman as saying the measure would "deal with the reality that digital currency is more and more common" and "everybody's been talking about the appropriate way to provide more reporting in particular." IRS Commissioner Charles Rettig said in April that the tax gap could exceed $1 trillion per year, far above the $441 billion estimate for 2011–2013, when people were "generally unaware of the term cryptocurrency."

Reconciliation: Leader Schumer said July 29 he has support for the FY2022 budget resolution from all 50 Senate Democrats, meaning the resolution could be considered as early as the week of August 2. However, moderate Senator Kyrsten Sinema (D-AZ) is objecting to a $3.5 trillion bill under reconciliation that Senate Budget Committee Democrats and leader Schumer targeted weeks ago. Her comments don't threaten the timeline for consideration of the budget — she said, "I will support beginning this process, [but] I do not support a bill that costs $3.5 trillion" — but rankled progressives already wary that the bipartisan effort diluted the impact of infrastructure legislation, and portend the difficulty leaders face in crafting a massive bill that can win the support of all 50 Senate Democrats and most House Democrats. Budget Committee Chairman Bernie Sanders (I-VT) this week acknowledged that drafting reconciliation instructions was holding up the resolution. House Majority Leader Steny Hoyer (D-MD) said July 29 members may come back in August to vote on the resolution, as the House is set to begin its scheduled August recess. "We don't want to have the budget sitting out there," he said, Roll Call reported.

Global tax: Sparing US tech companies from Digital Services Taxes (DSTs) was a major impetus behind the BEPS 2.0 project for a global tax agreement, but another sector, the pharmaceutical industry, is pushing back against the plan, the WSJ reported July 27. "The effort comes at the same time the industry is fighting U.S. proposals to cut drug prices. Lawyers and company officials estimate the tax overhaul, if adopted, could cost some of the biggest pharmaceutical companies hundreds of millions of dollars more each year. That has set up a fight in Congress and in Europe. In private industry meetings and discussions with congressional staffers, drug company executives and lobbyists are seeking to use the industry's pandemic role as leverage."

Energy: Senate Finance Ranking Member Mike Crapo (R-ID) and Senator Sheldon Whitehouse (D-RI) introduced the Energy Sector Innovation Credit (ESIC) Act (S. 2475) that would allow up to a 40% ITC or 60% PTC for low market penetration technologies across a range of energy sources and "provide flexibility for unforeseen clean energy technologies to be eligible for ESIC by including an expedited-consideration provision for Congress to take up new technology recommendations from DOE." Reps. Tom Reed (R-NY) and Jimmy Panetta (D-CA) introduced identical legislation in the House (H.R. 4720).

Real estate: On July 28, Senators Debbie Stabenow (D-MI) and Gary Peters (D-MI), and Reps. Jimmy Gomez (D-CA), Dan Kildee (D-MI), and John Larson (D-CT) introduced the Revitalizing Downtowns Act (S. 2511/H.R. 4759) to create the Qualified Office Conversion Tax Credit to convert unused office buildings into residential, commercial and mixed-used properties.

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