March 25, 2022
What to expect in Washington (March 25)
The push for a post-BBBA reconciliation bill may be back on after Senator Joe Manchin (D-WV) said in early March that he could back a bill that splits revenue, including from tax changes, between deficit reduction and spending on climate initiatives. The Washington Post reported late March 24 that Senator Manchin “has restarted talks with fellow Democrats about reviving the party’s climate and social spending bill, according to two people familiar with the matter, as administration officials search for oil and gas policies that could make the measure more palatable to him. Manchin, who has traveled in the past week with Energy Secretary Jennifer Granholm and Interior Secretary Deb Haaland, has told staff members and colleagues that the legislation must be voted on before senators leave town in August…”
Axios reported March 24 that Senator Manchin “told a group of climate activists and energy executives he’s open to supporting revised Build Back Better legislation narrowly addressing three issues: climate change, prescription drug prices and deficit reduction. Why it matters: Manchin’s private comments during a closed-door dinner Monday are a clear indication he’s serious about returning to the negotiating table, but for a much smaller version of President Biden’s initial $3.5 trillion proposal, people familiar with the matter tell Axios.”
Some House members have suggested Democrats likely will be making a legislative push in the tax area after Congress completes work on competitiveness legislation.
Competitiveness – Senate Majority Leader Chuck Schumer (D-NY) set up two votes for Monday, March 28 to complete the process of amending the America COMPETES Act (H.R. 4521) with the text of the Senate-passed USICA (S. 1260) so the two chambers can go to conference and resolve differences between the bills. While Senator Schumer previously suggested that some Republicans were delaying the process, Punchbowl reported that Monday’s votes were set after Senator Bernie Sanders (I-VT) dropped his opposition. Senator Sanders slowed the process over opposition to the $50 billion in CHIPS Act semiconductor funding and funds for a moon rocket project. “To get Sanders to stand down, Schumer promised that he would be allowed two votes on ‘motions to instruct’ conferees to the House-Senate negotiations” to strike the two proposals, the report said.
Tax – A Senate Foreign Relations Committee vote on a long-lingering tax treaty, between the US and Chile, was postponed until March 29.
Trade – Politico reported, “The Senate is struggling to quickly pass popular bipartisan legislation to suspend normal trade relations with Russia… Sen. Rand Paul (R-Ky.) is preventing the chamber from approving the bill before senators leave Washington for the weekend over his opposition to language in the measure regarding sanctions for global human-rights abusers.” On procedure, Senate Finance Ranking Member Mike Crapo (R-ID), the lead GOP negotiator on the trade measure, said, “The senators have a choice. They can just filibuster, which means it will take a week or 10 days, or they can agree to have a vote on their issue. … We don’t want to amend this legislation on the [trade relations] side.”
The House Ways & Means Committee will hold a hearing on the “Biden Administration’s 2022 Trade Policy Agenda” on Wednesday, March 30, 2022 (at 10:00 a.m.). The Senate Finance Committee will hold a similar trade hearing on Thursday, March 31 (at 10:00 a.m.).
Global tax – During a BDI/Business at OECD (BIAC) International Tax Conference March 23, Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration, suggested that while Pillar Two of the BEPS 2.0 project may not be implemented by some countries, it’s important to get a critical mass of nations implementing it and for other countries to recognize its legitimacy.
Health - On March 23, the Senate Health, Education, Labor & Pensions (HELP) Committee held a hearing that discussed the impact of the COVID-19 pandemic on the nation’s mental health and a rise in substance use disorders (SUD), including ways to improve children’s access to mental and behavioral health services and how to overcome barriers to SUD treatment such as workforce shortages and integration of mental health and primary care. An EY Tax Alert has details.
The Administration - The President’s FY2023 budget will be released on Monday, March 28, though tax and health hearings have not been scheduled at Ways & Means and Finance.
Congress – The House, upon returning from recess next week, is expected to consider a bipartisan “SECURE 2.0” retirement bill with committee-passed provisions from Ways & Means and Education & Labor.