May 4, 2022
What to expect in Washington (May 4)
A leaked Supreme Court draft ruling to overturn the Roe v. Wade decision “triggered political upheaval with potentially broad electoral and legal consequences” and “Democrats led by President Biden vowed to make abortion rights a defining issue of the fall midterm elections,” the New York Times reported. Axios reported that President Biden “plans to seize on the expected ruling to sharpen the contrast with congressional Republicans.” White House Press Secretary Jen Psaki said May 3, “The president’s position is that we need to codify Roe, and that is what he has long called on Congress to act on,” while noting there was insufficient support in Congress to pass the Women’s Health Protection Act even if there was no filibuster.
The House passed the bill, but a February procedural vote failed in the Senate 46-48, with Senator Joe Manchin (D-WV) joining Republicans in opposition. Moderate Senators Manchin and Kyrsten Sinema (D-AZ) have signaled they are still unwilling to repeal the filibuster in light of the development, raising the question of whether anything can be done by Democrats in Congress to act on the issue. Still, the Senate is taking procedural steps to consider a new version of the bill, S. 4132, to permit a woman to determine whether to continue or end her pregnancy, and to permit health care providers to provide abortion services.
The Wall Street Journal reported: “Democratic senators heavily criticized the ruling but also seized on the news to try to rally voters. They said they would again mount a long-shot effort to pass a federal law codifying Roe v. Wade, even if such a vote would serve only to put lawmakers on the record closer to the election, after a previous effort failed and drew no Republican support.”
Competitiveness – The Senate has yet to vote on the 28 nonbinding motions to instruct conferees to the America COMPETES/USICA competitiveness bill conference, which may include one filed by Sen. Maggie Hassan (D-NH) calling for an expansion of the R&D tax credit for small businesses and preserving R&D expensing. Punchbowl reported, “Senate Democrats and Republicans are wrangling behind the scenes over whether to allow Sen. James Lankford (R-Okla.) a vote this week on a motion to symbolically force the Biden administration’s hand on the Iran nuclear deal,” which would “require any future nuclear deal with Iran to address the regime’s nuclear weapons development program.”
Energy – Regarding Senator Manchin’s apparent two-track effort for a budget reconciliation bill with tax changes and a bipartisan energy bill, BGOV reported he “and other lawmakers are weighing a border adjustment tax that would slap a levy on imports of carbon-intensive goods from countries with weaker climate policies as they work on a potential bipartisan energy and climate package… [It] would place tariffs on fossil fuels and products such as cement and steel to prod countries that are moving too slowly to cut their greenhouse gas emissions…’This is not a carbon tax,’” Senator Bill Cassidy (R-LA) said.
Elections – In the May 3 primaries for the midterm congressional elections, J.D. Vance, author of Hillbilly Elegy, has been called as the winner of the Republican primary to face Rep. Tim Ryan (D-OH) for the Ohio Senate seat being vacated by Senator Rob Portman (R-OH). “Vance’s primary win caps an extraordinary political transformation from staunch Trump critic to one of the former president’s most vocal champions,” the Washington Post reported.
Tax – In a Wall Street Journal opinion piece, former Obama administration official Jason Furman offered a retrospective of changes in US international taxation in recent years and said the OECD/Inclusive Framework on BEPS global tax agreement strengthens the argument for “building on and fixing” the TCJA’s international tax reforms. The undertaxed payments/profits rule (UTPR) to allow any country to enforce the agreement against companies headquartered in countries without minimum tax laws is an enforcement mechanism, and even without it, “the absence of an agreement would risk replacing the recent spirit of cooperation with messy tax and trade wars.” The piece concluded, “The global minimum tax agreement signals the dawn of a new era of international economic cooperation. It will be good for the countries involved and may even be popular. It is pragmatic and, if anything, relatively minimal in only establishing a 15% rate floor. If Congress doesn’t pass legislation to implement it in the U.S., we could end up with something even worse than the stupid territorial system we had before President Trump.”
Cryptocurrency – Yahoo! Finance reported, “Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY) are proposing a tax exemption for up to a certain level of capital gains on cryptocurrencies, as part of new forthcoming legislation to regulate cryptocurrencies. ‘We came up with a number of $600 just to start out with, but among the things that we’re doing is sharing our bill draft with a number of our constituents so we can get feedback,’ Lummis said.”
Financial services - “The Fed chair, Jerome H. Powell, and his colleagues are expected to raise interest rates half a percentage point on Wednesday, which would be the largest increase since 2000,” the New York Times reported. Powell holds a press conference at 2:30 p.m.
Today, May 4 (at 2 p.m.), the Senate Finance Taxation and IRS Oversight Subcommittee will hold a hearing, “Laws and Enforcement Governing the Political Activities of Tax-Exempt Entities.”