Tax News Update    Email this document    Print this document  

February 7, 2022

What to expect in Washington (February 7)

The Senate may consider about a dozen judicial and other nomination votes this week. The House is in session this week but out the week that begins with Valentine’s Day, so they may vote on a continuing resolution to extend funding beyond the current expiration on February 18, perhaps into March. “It will probably be a short-term CR and it will be this coming week to give us a little more time,” Majority Leader Steny Hoyer (D-MD) said Sunday.

Reconciliation bill – Senator Joe Manchin (D-WV) made a joint appearance with Senator Lisa Murkowski (R-AK) on CNN’s State of the Union, where they backed each other’s re-election bids, with both facing calls for primary challenges, and promoted bipartisanship. Senator Manchin repeated that “the Build Back Better as it has been presented over – what, the last seven, eight, nine months? That bill no longer will exist, OK? Should there be parts of it? Do you want to talk about different things? I think the president said there might be certain parts and this and that. My biggest concern and my biggest opposition: it did not go through the [committee] process.” Asked whether he has talked to President Biden about a way forward for the BBB, maybe as a smaller bill, Senator Manchin said, “We have had a conversation, but we really didn’t get into that, because, right now, our main concern is to get a budget… We have to get a budget bill first… We’re working off of, basically, the last year of the Trump administration’s budget.”

Government funding – Democratic and Republican appropriators have been working toward an agreement on discretionary spending levels for defense and non-defense spending as well as policy riders. Spending levels are no longer dictated by the Budget Control Act (BCA) limits in place for the past decade, which were routinely modified by bipartisan agreements. The Bipartisan Budget Act of 2019 set FY2020 and 2021 spending levels, and a continuing resolution has covered spending for FY2022 since the beginning of the fiscal year on October 1. The Wall Street Journal (WSJ) said of the BCA, “With the law’s expiration, the two parties have less incentive to abide by the principle of parity in military and nonmilitary spending increases. President Biden called for a 15.9% increase in nondefense spending for fiscal 2022, to $769 billion, but only a 1.7% increase in the defense budget, to $753 billion. Republicans have balked at the disparity…”

Competitiveness/supply chain – On Friday, the House passed the America COMPETES Act, which is comparable to the U.S. Innovation and Competitiveness Act (USICA) that passed the Senate in 2021. Both include over $50 billion in funding for CHIPS Act semiconductor R&D, National Science Foundation (NSF) provisions, and a long list of duty suspensions and reductions. Among many differences, the House bill includes Trade Adjustment Assistance (TAA), a permanent extension of the Health Care Tax Credit for health insurance costs, and climate provisions. Most House Republicans didn’t support the bill, and Senate Republicans who backed USICA in June 2021 have said a final agreement, which leaders want within a month, must be close to the Senate bill.

A story in the February 5 Washington Post said, “Republican and Democratic House aides both said they understood that their chamber’s provisions on trade, climate, foreign policy and research needed to be reworked for Senate approval. While it could take several weeks for a conference to formally begin — given that leaders must determine how to establish one under an equally split Senate — it is possible that House and Senate committee chairs and ranking members will soon start informally negotiating...”

The WSJ noted, “Another difference is the House’s inclusion of a new, $45 billion fund to provide grants and loans to strengthen U.S. supply chains and manufacturing.”

Hearings – On Tuesday, February 8 (at 10:00 a.m.), the Senate Finance Committee holds a hearing on “Protecting Youth Mental Health: Part I - An Advisory and Call to Action,” with the sole witness U.S. Surgeon General Vivek Murthy. The Committee holds a hearing on two HHS nominations the following day.

The House Ways and Means Oversight Subcommittee will hold a “Hearing with the National Taxpayer Advocate on Challenges Facing Taxpayers” on February 8, 2022 (at 2:00 p.m.).


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Ray Beeman (
   • Kurt Ritterpusch (
   • Heather Meade (
   • Adam Francis (