March 9, 2022 What to expect in Washington (March 9) Overnight, the House posted a long-negotiated $1.5 trillion, 2,741-page omnibus appropriations bill that does not include a tax title, meaning it does not address any tax extenders or TCJA cliffs. The bill does include several health items, including telehealth provisions and $1 billion for the Advanced Research Projects Agency for Health (ARPA-H). The bill includes $13.6 billion in emergency assistance to Ukraine and our NATO allies and $15.6 billion in emergency assistance to continue to combat COVID. The House is planning to vote on the omnibus funding measure as soon as today and has also provided for a continuing resolution through March 15 to allow the Senate time to process the bill, given the March 11 deadline. Prior to the release, Roll Call reported that a bipartisan small-business relief package that would have backfilled the depleted Restaurant Revitalization Fund was omitted, and Senator Ben Cardin (D-MD) said there were Republican objections. “I don’t expect there will be” a tax section, Senate Finance Chair Ron Wyden, D-Ore., said in the report, which noted that some Democrats did not want to act on corporate tax provisions without items for individuals like extending the expanded Child Tax Credit with monthly payments. Wyden also said he wanted more time for the Finance Committee to consider and weigh in on a retirement package that some wanted in the omnibus. There had also been efforts to include in the omnibus provisions like a delay of the IRC Section 174 TCJA requirement for five-year amortization of R&D, rather than expensing. “There’s so many different tax provisions that people wanted that unless they got theirs, they didn’t want the others to get in,” Senator Cardin said. “It’s difficult to get a tax section agreed to.” Reconciliation – Regarding a post-Build Back Better Act reconciliation bill and other aspects of the congressional agenda, Majority Leader Chuck Schumer (D-NY) released a letter March 7 saying:
Politico described the letter as the “first concrete signal of a revival of Democrats’ stalled party-line domestic agenda” and said it “marks a clear step toward a resuscitated spending plan that might be more in line with the parameters set out last week by Sen. Joe Manchin (D-W.Va.)…” Competitiveness – Some members say the $52 billion in funding for CHIPS Act semiconductor R&D in both the America COMPETES Act approved by the House in February and the U.S. Innovation and Competitiveness Act (USICA) that passed the Senate in 2021 should move as a standalone measure given geopolitical pressures and uncertainty over how soon a conference agreement on the broader bills can come together. Axios reported March 8: “In a letter today, some 140 lawmakers, led by Sens. Mark Warner (D-Va.), John Cornyn (R-Texas) and Reps. Doris Matsui (D-Calif.) and Michael McCaul (R-Texas), urged congressional leaders to approve just the $52 billion for semiconductors on its own. They called on leaders to ‘immediately begin negotiations to allow votes in the House and Senate as soon as possible.’” The Senate Finance Committee has noticed a hearing, “The Promise and Challenge of Strategic Trade Engagement in the Indo-Pacific Region,” for Tuesday, March 15 (10:00 a.m.). Tax – The staff of the Joint Committee on Taxation March 8 released its Bluebook for the 116th Congress, with the following note: “Known formally as the General Explanation of Tax Legislation Enacted in the 116th Congress, the Bluebook provides explanations of more than 200 tax provisions across eight different Acts, starting with the Taxpayer First Act (Public Law 116-25) and ending with the Consolidated Appropriations Act, 2021 (Public Law 116-260). For each provision, the Bluebook includes a description of present law, an explanation of the provision, and the effective date.” The Bluebook is available only via download. Thursday, March 10 (10:30 a.m.) is the Washington Post Live event “The Path Forward: U.S. Treasury Secretary Janet L. Yellen.” House Ways and Means Oversight Subcommittee Chairman Bill Pascrell (D-NJ) March 8 called on Secretary Yellen to issue regulations on irrevocable grantor trusts to limit abuse of the “loophole” related to stepped-up basis. Chairman Pascrell is the primary sponsor of a bill related to the issue (H.R. 2286). Bloomberg Tax March 8 reported foreign tax credit regulations “are too restrictive and burdensome overall, business groups say. But companies that have operations and pay taxes in developing countries could feel the sharpest pinch because those countries are more likely to levy ‘novel’ kinds of taxes on U.S. companies that won’t qualify for the U.S. foreign tax credit under the new rules, [practitioners] say.” A March 4 letter on the issue from trade associations is available here. Health – The Washington Post March 7 reported that Senator Ron Johnson (R-WI), in a radio interview, said he wants to see the GOP repeal the Affordable Care Act if his party wins the White House and the House and Senate majorities in 2024. Congress – The Senate March 8 approved 79-19 a postal reform bill, sending the measure to the President. House Democrats are holding an issues conference/retreat in Philadelphia during the latter half of the week, with President Biden expected to deliver remarks on Friday. The Senate is out of session today for both parties to hold retreats in Washington, returning to session on Thursday. ———————————————
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