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Some Republicans are calling for the continuing resolution (CR) currently under consideration to be "clean," or free of add-on items, and last until the start of the new Congress, The Hill newspaper reported. The development muddles current plans to extend government funding into December and then consider a year-end bill anchored by an omnibus (or another CR) that could be a vehicle for tax and/or retirement provisions.

"We must not accept anything short of a 'clean' Continuing Resolution ('CR') that contains no additional spending or extraneous policy riders," said a letter from Republican senators led by Sen. Mike Lee (R-UT). "At a minimum, any agreement on a clean CR must carry over into the beginning of the 118th Congress. Failure to stand strong against lame-duck spending and caving to the Democrats will likely worsen inflation, prolong the current economic recession, and advance policies contained in the Biden administration's progressive wish-list." Senate Finance Committee Ranking Member Mike Crapo (R-UT) was among the 14 GOP signatories. A similar letter was backed by more than 40 House Republicans.

Trade — Still, a Politico report on trade issues noted that "Crapo has previously said he hoped some trade provisions could be included in a year-end tax extenders bill." It said that timeline was reiterated on Tuesday by House Ways and Means Chair Richard Neal (D-MA), who said that "many of the tax considerations will be done in the end" of the Congressional session and Crapo "knows what my priorities are" when it comes to trade. "I talked to him about them weeks ago," he said in the report. Trade provisions were once in, then out, of the House Build Back Better Act that, in narrower form, became the Inflation Reduction Act; and the America COMPETES Act that became the CHIPS and Science Act. The article mentioned Trade Adjustment Assistance, the Generalized System of Preferences, and Miscellaneous Tariff Program.

Energy — On the CR generally, Punchbowl reported that Senator Joe Manchin's (D-WV) energy permitting proposal will be unveiled today but faces an uphill climb to get support from the unpredictable alliance of progressives and Republicans opposed to the issue (and, in the case of many Republicans, still upset with Manchin over his support for the Inflation Reduction Act). Senate Majority Leader Chuck Schumer (D-NY) said following the regular Tuesday party lunches that he still intends to attach the permitting reform to the CR. The report said, "There's not going to be a government shutdown, and lawmakers in both parties and both chambers want to head home to run for reelection. But the endgame on the CR — which will include roughly $12 billion for Ukraine — is dragging out."

On the Republican perspective, Politico reported Senator John Cornyn (R-TX) as saying, "Given what Senator Manchin did on the reconciliation bill, [it's] engendered a lot of bad blood … There's not a lot of sympathy on our side to provide Sen. Manchin a reward."

Tax — An EY Alert, "OECD holds public consultation meeting on Progress Report on Amount A of Pillar One," is available here.

Bloomberg Tax reported an official with the IRS LB&I division as saying at a conference hosted by the Tax Executives Institute September 20 that IRS and the Treasury Department are working to provide "quick guidance" on provisions of the Inflation Reduction Act and notices of proposed rulemaking should be published "very soon." Also, IRS is "actively working on" guidance related to a provision in the 2017 tax law on the amortization of research and development expenditures, expected to address substantive concepts and questions that have been raised about the change of accounting method.

On Tuesday, September 20, the Ways & Means Committee advanced to the full House H.R. 82, the Social Security Fairness Act, to fully repeal Social Security's Government Pension Offset and Windfall Elimination Provision. The bill is sponsored by Reps. Rodney Davis (R-IL) and Abigail Spanberger (D-VA) with 299 co-sponsors, enough to put it on the House consensus calendar. Chairman Neal and Ranking Member Kevin Brady (R-TX) said they were still working to find agreement on the issue. Roll Call reported that the Committee's action prevents Rep. Davis from fast-tracking the bill to the floor without leaders' consent.

The Committee also voted 24-16 to adversely report to the House a resolution of inquiry, H. Res. 1269, directing the Treasury Secretary to provide documents relating to the impact of the OECD Pillar One agreement. Rep. Kevin Hern (R-OK), the author of the resolution, said Treasury has not divulged information and has deprived the Joint Committee on Taxation information to produce their own estimates.

Elections — Some of the latest political reporting is on the North Carolina Senate race for the seat of retiring Sen. Richard Burr (R-NC). "Since a blue wave in the state in 2008, winning elections hasn't been easy for Democrats. But polling is evenly divided as Cheri Beasley and Ted Budd compete," the New York Times said. The report said the race, without the fiery dynamics of others, such as in Pennsylvania and Georgia, may be the sleeper of the 2022 midterm elections. "Ms. Beasley is running as a judge above the fray, and Mr. Budd, hoping to shed his association with former President Donald J. Trump, is trying to come off as a generic Republican campaigning against an unpopular Democratic president when the national environment favors his party."

Gaining control of the House continues to seem more possible for Republicans, who only need a net gain of five seats (presuming the vacant Indiana seat stays Republican) with more than 30 held by Democrats that are rated as toss-up or lean-to/likely to go to the other party. The Senate is more difficult to handicap, and even Senate Republican Leader Mitch McConnell (R-KY) said yesterday it could remain evenly split. "The country is 50-50 and I think the outcome for the Senate is likely to be 50-50. We've got a bunch of hard-fought races. We're all giving it our best on both sides, and I think it's a jump ball," he said.

Congress — Both chambers are expected to be in session until a one-week recess the week of October 3. Following that recess, the Senate is scheduled to then come back for two weeks, while the House is set to remain out of session until after the elections. Leader Schumer said yesterday regarding the schedule: "We will be meeting in October. There's one week we can't meet because of the Yom Kippur holiday but we'll be meeting in October. [The National Defense Authorization Act] will be part of what we do."

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