September 23, 2022
What to expect in Washington (September 23)
House Republican leaders are unveiling their "Commitment to America" platform in Monongahela, PA, near Pittsburgh, today and a preview of the plan drew contrasts with Democratic policies in several areas. On tax, the plan is expected to be anchored by permanency of the TCJA tax rate cuts for individuals and the 20% deduction for passthrough income, and preview documents call for continuing "proven pro-growth tax policies that increase take-home pay, reduce the cost of living, boost local businesses, and encourage innovation." Health items highlighted include expanded access to affordable telemedicine, mental health services, and drug treatment.
On a related note, Rep. Vern Buchanan (R-FL), one of three members vying for the Ways & Means chairmanship in the next Congress if control of the House flips to Republicans, introduced the TCJA Permanency Act (H.R. 8913) to make permanent the 2017 tax cuts for individuals and small businesses. "Buchanan's legislation also includes a number of important updates to a previous iteration of this bill, including several technical fixes and expanded eligible uses of 529 savings plans to help parents and students," a press release said.
On the global tax front, President Biden cited the OECD-led global tax agreement in his address to the United Nations General Assembly in New York September 21, a setting that doesn't typically include tax mentions. "With partners in the Americas, Africa, Europe and the Middle East and the Indo-Pacific, we're working to build a new economic ecosystem, where every nation gets a fair shot in economic growth that is resilient, sustainable and shared," he said. "That's why the United States is championing a global minimum tax, and we will work to see it implemented, so major corporations pay their fair share everywhere."
The government of new UK Prime Minister Liz Truss announced a growth plan to, among other things, cancel a corporate tax increase, "keeping it at 19%," and cut taxes for homebuying. "Breaking sharply with the era of the previous prime minister, Boris Johnson, the new chancellor of the Exchequer, Kwasi Kwarteng, promised the dawn of a new age of lower taxation, with the scrapping of one planned tax rise and the reduction of levies on home purchases to try to fire up the real estate market," the New York Times said.
Government funding — Senator Joe Manchin (D-WV) September 21 released the comprehensive permitting reform text to be included in the Continuing Resolution (CR). The bill would require federal agencies to issue all approvals and permits for the construction of the Mountain Valley Pipeline and set a two-year target for National Environmental Policy Act (NEPA) reviews for major energy and natural resource projects. A CR with the permitting measure attached appears unlikely to advance given the 'strange bedfellows' opposition from both progressive Democrats who oppose the measure, or at least want a longer runway to its enactment, and Republicans still upset with Manchin over his support for the Inflation Reduction Act.
Punchbowl reported that a Tuesday Senate cloture vote (Congress is out Monday for Rosh Hashanah) on H.R. 6833, the legislative vehicle for the CR, could demonstrate that the permitting addition can't advance and allow Democrats to then offer a mostly "clean" version including Ukraine aid, "and it will get overwhelming support from lawmakers eager to go home to campaign." Funding expires September 30 and delays in clearing the CR could have the House voting over the weekend.
A Roll Call story said, "some GOP senators haven't ruled out objecting to a time agreement to speed up votes next week by yielding back debate time," given that some demanded that a CR be extended into next year. "Nonetheless, in theory the tentative plan to start the process this Thursday could lead to a final Senate vote by next Friday, when the current fiscal year expires. It might even enable the House to take up the Senate-passed bill and clear it in time to beat the midnight deadline," the report said.
The Hill reported Senate HELP Committee Ranking Member Richard Burr (R-NC) saying September 22 that the five-year reauthorization of the Food and Drug Administration's (FDA) user fee program will be attached to the CR.
Health — Bipartisanship was on display at the Ways & Means Committee during a September 22 markup of home visiting and mental health legislation, with Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) releasing a joint press release in which Chairman Neal said, "Today, we were honored to be joined by the loved ones of our late colleague, Congresswoman Jackie Walorski, as we honored her service and legacy by passing the reauthorization of home visiting legislation. The Jackie Walorski Maternal Child Home Visiting Reauthorization Act doubles the federal funding in the proven MIECHV program over the next five years and will allow even more families to access this life-changing support."
Ranking Member Brady said, "I am proud to join Chairman Neal in dedicating this bill to the late Republican Leader on the Worker and Family Support Committee, our dear friend Rep. Jackie Walorski. This bipartisan bill wouldn't be possible without her tremendous work finding common ground for a five-year reauthorization, increasing transparency about outcomes, and her deep commitment to helping vulnerable children and families."
Fed's third straight 'supersize' rate hike — Continuing its campaign against inflation, the Federal Reserve on September 21 raised its key interest rate by 0.75 percentage points for the third consecutive month, lifting the benchmark rate to a target range of 3 to 3.25%. The Fed also released a downbeat set of economic projections. When asked at a press conference if higher rates might hurt the economy, Chairman Jerome Powell said, "No one knows whether this process will lead to a recession or if so, how significant that recession would be." He added that "the chances of a soft landing [for the economy] are likely to diminish" because monetary policy needs to be "more restrictive, or restrictive for longer." Powell said the housing market will probably go through a correction after a period of "red hot" property values: "There was a big imbalance … housing prices were going up at an unsustainably fast level. For the longer term, what we need is supply and demand to get better aligned so housing prices go up at a reasonable level, at a reasonable pace … " Powell said. "We probably … have to go through a correction to get back to that place."
Stocks tumbled in response, with the Dow Jones Industrial Average on Wednesday sliding 522.45 points, its second consecutive day of losses. On September 22, the Bank of England raised its key interest rate by another half-percentage point to 2.25%, its highest level in 14 years. It was the bank's seventh straight rate increase, but "officials held off on acting more boldly as they predicted a second consecutive drop in economic output this quarter," the AP reported.