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September 19, 2022

What to expect in Washington (September 19)

This week begins much like last week: both chambers of Congress are in session, the only must-pass item of the pre-election session is a continuing resolution (CR) to extend government funding beyond September 30, and there is no expectation of swift movement on the CR because of continued negotiations on potential add-ons like energy permitting reform and an FDA User Fee package.

The House is in at noon today with a first vote at 6:30 p.m. Beyond a long list of votes on generally non-controversial items, the House may consider the Joint Consolidation Loan Separation Act. A Washington Post story from the weekend said, "A short-lived federal program to combine the student loans of married couples has trapped scores of borrowers in loans that are ineligible for debt relief initiatives … House Democrats are a step closer to passing legislation to let borrowers split their joint consolidation loans."

On Tuesday, September 20, the House Ways & Means Committee will meet to mark up H.R. 82, Rep. John Larson's (D-CT) Social Security Fairness Act of 2021 to repeal provisions that reduce Social Security benefits for individuals who receive other benefits, as well as "resolutions of inquiry," including:

  • H. Res. 1269, directing the Secretary of the Treasury to provide certain documents relating to the impact of the OECD Pillar One agreement on the U.S. Treasury; and
  • H. Res. 1262, directing the Secretary of Health and Human Services to provide certain documents regarding the reinterpretation of tax code sections relating to the "family glitch."

The Senate will convene at 3:00 p.m. today and, at 5:30 p.m., will vote on a procedural motion related to the Florence Pan DC Circuit judicial nomination. The Finance Committee has no hearings scheduled. The Senate Banking Committee holds a hearing on Tuesday, September 20, "Tightening the Screws on Russia: Smart Sanctions, Economic Statecraft and Next Steps."

Tax — On Friday, September 23, House Republican leaders are planning to unveil their "Commitment to America" platform, "with the tax portion of the plan focused on extending 2017's tax rate cuts for individuals, the 20 percent rate cut on passthrough income, and bonus depreciation," Tax Notes reported. There will be a "skinny" version that may hardly mention tax, as well as a broader blueprint for the first year of a Republican-controlled Congress, according to the report, which said the rollout was postponed from September 19 for reasons related to the death of Queen Elizabeth II. Punchbowl reported that GOP leaders will unveil the package near Pittsburgh Friday, after previewing it for members on Thursday.

Washington — President Biden is away from Washington, attending the funeral for Queen Elizabeth II. He returns to address the U.N. General Assembly on Wednesday. Also on Wednesday, September 21, the Federal Reserve is expected to announce its next interest rate decision.

On 60 Minutes last night, President Biden, confronted about lingering inflation, the highest in 40 years, said: "I got that. But guess what we are. We're in a position where, for the last several months, it hasn't spiked. It has just barely — it's been basically even. And in the meantime, we created all these jobs and prices have gone up, but they've come down for energy. The fact is that we've created 10 million new jobs. We're in — since we came to office, we're in a situation where the unemployment rate is about 3.7%, one of the lowest in history. We're in a situation where manufacturing is coming back to the United States in a big way. And look down the road, we have massive investments being made in computer chips and employment. So, I — look, this is a process. This is a process."

Elections — A New York Times story this morning discussed persistent voter concerns about inflation ahead of the midterm elections and how it is figuring into House races. "In the six-month primary season that came to a close on Tuesday, issues like abortion, crime, immigration, the Jan. 6 attack on the Capitol, and Donald J. Trump have risen and fallen, but nothing has dislodged inflation and the economy from the top of voters' minds," it said.

An editorial in today's Wall Street Journal said, "Democrats have a good chance of adding to their majority in the Senate and even keeping it in the House," and if they do, "Major tax increases will also be back in play. Ways and Means Chairman Richard Neal recently told a Bloomberg reporter that Democrats will raise individual and corporate tax rates if they keep power. Treasury Secretary Janet Yellen said in a recent speech that the Administration's goal is to return 'tax rates for high earners and corporations to historical norms.' How high is 'historical'? Mr. Neal's original proposal in 2021 raised the corporate rate to 26.5%, and the individual rate to 39.6% from 37% at $400,000 in income and 42.6% above $5 million, and imposed a tax on capital gains at death. With two more Senators, expect those rates to go much higher."


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Washington Council Ernst & Young
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