June 22, 2022
What to expect in Washington (June 22)
President Biden is asking Congress to suspend Federal gasoline and diesel taxes ($.18 and $.24/gallon) through the end of September, though, as CNN reported, Republicans oppose the move, and the request was delayed until now "because of concerns at how it might be received in Congress." In April, House Speaker Nancy Pelosi (D-CA) said while "it's good PR … there's no guarantee that the saving — the reduction in the federal tax — that would be passed on to the consumer." Ways & Means Chairman Richard Neal (D-MA) said in Punchbowl today, "I'm not committed to it. I want to talk to the speaker about it, and we're going to go back and forth. I want some assurance that the money is going to go to the consumer."
Reconciliation talks between Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) also have energy issues as a focus. Senator Manchin said June 21 a $4,500 bonus tax credit for vehicles assembled at a US facility that operates under a union-negotiated collective bargaining agreement is no longer part of the negotiations, Bloomberg reported. "It's gone," he said. The report further said, "In recent weeks, Manchin has said he doesn't like the existing EV tax credit structure because U.S. companies have run out of credits or will soon run out of credits and foreign companies will continue to get subsidized." A group of automakers last week asked Congress to expand the EV credit and allow more than 200,000 qualifying sales per company.
On another reconciliation matter, NBC reported that AARP will launch TV ads in West Virginia urging Senator Manchin to support a budget reconciliation bill that includes prescription drug savings, to run through at least July 5. Manchin recently said allowing Medicare prescription drug negotiation and price caps is an "easy one for us to do," and "if we do nothing more this year, that's the one thing that must be done."
Retirement — Today (10 a.m.) is the Senate Finance Committee markup of the Enhancing American Retirement Now (EARN) Act, intended to be part of 'SECURE 2.0' retirement legislation. The Earn Act includes provisions on 403(b) multiple employer plans, part-time workers, treating student loan payments as elective deferrals, and insurance-dedicated exchange-traded funds, and would increase catch-up contributions and the age for required minimum distributions. The Committee posted 21 amendments.
A modification posted overnight would delay the higher catch-up amounts for those 60-63, to be effective after 2024, and accelerate the effective date for the optional treatment of employer matching and non-elective contributions as Roth contributions to apply to contributions made after 2022.
Politico this morning: "lawmakers have a ways to go until they reach a final deal on retirement, something that is most likely to happen after November's midterms. The House and Senate approaches have some definite overlap and a similar price tag, but an aide to Sen. Michael Bennet (D-Colo.) told our colleagues … that about 40 of the roughly 70 provisions in each chamber's bills are different."
Competitiveness — Speaker Pelosi and Senate Leader Schumer released a statement following a meeting of the Big Four bipartisan, bicameral leadership on the COMPETES/USICA conference June 21: "It is critical that the Congress act swiftly and decisively to lower families' costs, energize American manufacturing and strengthen America's competitiveness now and for the future. Today, we had a bipartisan, bicameral meeting of the Congressional Leadership to discuss the path forward with the bipartisan innovation conference. On behalf of House and Senate Democrats, we expressed our belief that there is no reason that we should not pass this bill through Congress in July. Democrats have already made accommodations in the name of reaching an agreement … "
Punchbowl reported House Republican Leader Kevin McCarthy (R-CA) as saying Democrats need to drop 'poison-pill' contentious provisions, and while those weren't specified, the reported suggested they could be climate, trade and labor items in the House bill.
In addition to expediency being sought because of political factors, there has been reporting in the New York Times that chip makers, who stand to benefit from $52 billion in funding under the measure, are "privately warning lawmakers that failure to do so could prompt them to take their manufacturing plants elsewhere." The story further said, "As lawmakers in the House and Senate have spent months haggling over more than a thousand other provisions in that larger package, chip executives have become increasingly anxious about if and when their incentives will materialize. And they have become increasingly vocal in warning lawmakers that the United States risks falling behind other nations … "
Congress — The Senate will hold another vote Thursday on gun legislation after a bipartisan deal was announced June 21 — by Senators Chris Murphy (D-CT), John Cornyn (R-TX), Kyrsten Sinema (D-AZ), and Thom Tillis (R-NC) — that addresses health issues like Medicaid and telehealth, access to mental health care in schools, and the Medicaid Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit. The measure cleared an initial procedural hurdle yesterday 64-34.
Health — On COVID vaccines becoming available for children under 5, President Biden said June 21, "this is a very historic milestone, a monumental step forward. The United States is now the first country in the world to offer safe and effective COVID-19 vaccines for children as young as six months old. In the first time in our fight against this pandemic, nearly every American can now have access to lifesaving vaccines."
Senators Jeanne Shaheen (D-NH) and Susan Collins (R-ME) plan to unveil a bipartisan bill today that aims to curb the high cost of insulin, the Washington Post reported.
Global tax — Treasury Secretary Janet Yellen said on Monday, at a discussion with Canadian Finance Minister Chrystia Freeland in Toronto, that when countries start implementing a global minimum tax on multi-national companies, other nations will need to follow along or risk losing tax revenues, Reuters reported. "When some countries opt into this (minimum corporate tax) and put these taxes in effect, it'll begin to be more and more that see that it's in their interest to join up," Yellen said.
After Hungary opposed the Pillar 2 minimum tax directive at last week's ECOFIN meeting over the economic situation in Europe, a member of the Hungarian parliament and political director for the Prime Minister said in a commentary in today's Wall Street Journal: "The European Union is entering a time of economic crisis. The war and sanctions are causing unprecedented challenges: rising interest rates and inflation, spiking food and energy prices, and supply-chain disruptions. Governments must make their countries' economic interests the priority and address the cost-of-living crisis. Adopting the European Commission's minimum-tax directive now would be a profound mistake."