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Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) have reportedly continued to meet over a possible slimmed-down reconciliation bill. Unconfirmed descriptions of a framework for a bill have been circulating in Washington that outline about $650 billion in spending on clean energy tax credits, Affordable Care Act subsidies, and childcare; $300 billion in revenue from prescription drug cost savings and $1 trillion in tax increases; and spending and deficit reduction split 50-50. Axios reported that new revenue could total $800 billion; Manchin is eager to authorize prescription drug price negotiation; and while he would like a corporate tax rate increase, “he’ll settle for establishing a domestic minimum rate of 15%.”

Retirement – Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Senator Patty Murray (D-WA) and Ranking Member Senator Richard Burr (R-NC) May 26 released a discussion draft of a bill intended to be incorporated into ‘SECURE 2.0’ retirement legislation. Provisions would allow employers to offer emergency savings accounts; expand access to employer-provided retirement plans through multiple employer plans, and through increased access to plans for part-time workers; and improve communications to retirement plan participants and transparency around lump-sum buyout offers for pension plan participants. The Committee intends to mark up a bill in the coming weeks.

There have been reports that the Senate Finance Committee is planning to mark up a bill in June. Tax Notes reported senators including Finance Ranking Member Mike Crapo (R-ID) as saying “a refundable savers credit and a requirement for all businesses with 10 or more employees to offer a workplace retirement plan still needed to be worked out before what they hope will be a committee markup in June.”

Budget – The Congressional Budget Office (CBO) May 25 released The Budget and Economic Outlook: 2022 to 2032, projecting:

• the federal budget deficit will shrink to $1.0 trillion in 2022 (from $2.8 trillion last year) and average $1.6 trillion annually from 2023 to 2032
• Federal debt held by the public will dip from 100% of GDP at the end of 2021 to 96% in 2023, then steadily rise, reaching a record-high 110% of GDP in 2032
• extending the 2017 TCJA’s changes to individual income tax provisions would cost $2.064 trillion over the 2023-2032 window
• extending higher estate and gift tax exemptions would cost $102 billion
• extending policies including bonus depreciation and R&D expensing and maintaining certain business tax provisions altered by the TCJA would cost $529 billion

Global tax – The OECD on May 27 released and sought public comments on two consultation documents relating to tax certainty: a Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A under Pillar One.

Congress – The House and Senate are out until the week of June 6. Senate Democratic leaders said the chamber will debate background check gun legislation upon returning. CNN reported that Senate Republican Leader Mitch McConnell (R-KY) instructed Senator John Cornyn (R-TX) to begin discussions with Democrats on possible legislation related to gun violence.

With Congress in recess, What to Expect in Washington won’t be published this week, but Alerts will be issued as events warrant.

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