September 28, 2022
What to expect in Washington (September 28)
The Senate is set to vote today or tomorrow on a continuing resolution (CR) to fund the government through December 16 after Senator Joe Manchin (D-WV) pulled his energy permitting reform and the legislative vehicle for the funding measure, H.R. 6833, cleared a procedural vote 72-23. Punchbowl reported that amendment votes are possible, and that Senate Appropriations Chairman Pat Leahy (D-VT) said Thursday was more likely for a final vote. Ukraine funding, a five-year FDA User Fee reauthorization, LIHEAP heating cost funding, and water and natural disaster funding remain as add-ons.
The House, which is set to vote on multiple bills plus more than 30 on the suspension calendar today, would be expected to clear the funding bill before the midnight Friday deadline. After that, both chambers are in recess next week and only the Senate is scheduled to return before the elections, with work on the National Defense Authorization Act on tap. There is the possibility the Senate could postpone that work and cancel the October work period to keep members in their states and campaigning ahead of the elections.
Majority Leader Chuck Schumer (D-NY) said he would work with Manchin to enact the permitting measure before the end of the year. Manchin said, "It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk."
In remarks in the Rose Garden September 27, President Biden touted elements of the Inflation Reduction Act, particularly Medicare drug price negotiation and the corporate alternative minimum tax (CAMT). "Now corporations will have to pay a minimum corporate tax of 15%. Just 15%. We're not gouging anybody, 15% minimum. That's it," he said. "The days of billion-dollar companies paying zero taxes are over though. And there's enough money there to pay for an awful lot of this."
The President said Republican senators want to cut Social Security. "The senator in charge of reelecting the United States senators — Senator Scott — has proposed the plan where Social Security, Medicare — every five years on the chopping block … Then there's Senator Ron Johnson of Wisconsin. He thinks waiting five years — every five years is too long to wait. He wants to put Social Security and Medicare on the chopping block every single year in every budget."
On the CAMT, Tax Notes reported: "The 15 percent corporate alternative minimum tax pushed by Democrats in the U.S. Congress through the Inflation Reduction Act (IRA) is not an adequate stand-in for pillar 2 of the OECD's global tax deal, EU Tax Commissioner Paolo Gentiloni said. When answering a question from Dutch member of the European Parliament Paul Tang during a tax dialogue with the Economic and Monetary Affairs Committee of the EP September 26, Gentiloni said the U.S. decision to introduce the corporate AMT is a 'positive and interesting decision in the domain of corporate taxation that establishes a minimum of 15 percent corporate taxation in the U.S.,' but that it is 'not a substitute for the implementation of pillar 2.'
Regarding EV credits in the IRA, the Wall Street Journal reported September 27, "The government is pressing to complete new rules on tax breaks for electric-vehicle purchases by an end-of-year deadline as auto companies seek guidelines that help qualify as many vehicles as possible … The Treasury Department, in its regulatory guidance for the credits, could help make the new requirements easier for auto makers to meet, industry and advocacy groups said. Issues the groups would like to see addressed include how the government calculates whether the sourcing requirements have been met and how auto makers will certify they are in compliance."
Friday, September 30 (12:00 p.m.), is the EY Webcast, "Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments." Register.