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December 19, 2022

What to expect in Washington (December 19)

Congress is preparing to try to pass an omnibus appropriations bill before departing for the holidays at the end of the week and before the current expiration of funding on December 23. Some Republicans insist that another short-term patch be enacted to extend funding only into early 2023 to give the GOP more leverage with control of the House next year, and some have suggested that if the still-unreleased bill can't be reviewed before votes, they could slow the process, which needs to be expedited to finish this week.

Appropriators announced agreement on a framework last week, without details. Details known now include:

  • the text of the $1.7 trillion bill could be released as soon as today;
  • the Senate will process the bill first;
  • Republican Leader Mitch McConnell (R-KY) said they need to finish by Thursday, December 22;
  • prospects for a robust tax package are dim, though a very narrow tax title is possible;
  • Democrats haven't gained traction on a Child Tax Credit expansion for 2022 TCJA cliffs deal; and
  • there is much greater optimism for inclusion of a retirement savings package.

Ways & Means Ranking Member Kevin Brady (R-TX) said last week that a very narrow tax title may be included, without elaborating on its potential contents. Press stories have suggested the possibility of some non-energy tax extenders — energy items were previously addressed in the Inflation Reduction Act — or relief from the third-party network transactions reporting threshold reduction to $600 under the American Rescue Plan Act being included. The stories also noted the traditional difficulty involved in addressing only some but not all outstanding tax items. Politico Morning Tax today said, "A pair of West Virginia Republicans, Sen. Shelley Moore Capito and Rep. Carol Miller, are trying to attach a one-year delay of new tax reporting requirements to the omnibus."

An analysis in the Sunday Washington Post that discussed how down-to-the-wire lame-duck sessions to cap the year weren't always the norm said, "leaders hope soon to unveil the details of a $1.7 trillion outline for funding federal agencies, with final votes planned by Friday, just two days before Christmas." While some previous post-election sessions have been short, "this coming week, lawmakers are expected to be in town until Friday to approve the final bills for the 117th Congress. They may even work part of the last week of the year if some important business is on the verge of being negotiated. Although this has been a productive two years overall for major legislation, congressional leaders have again waited until deep into the holiday season to assemble must-pass bills … "

Today's Wall Street Journal reported the Senate is expected to vote on the bill first and, "Lawmakers are planning to add a bipartisan bill that would expand incentives for retirement savings, and they have been working for months to reconcile House and Senate versions. The legislation is expected to raise the starting age for required minimum distributions from tax-deferred accounts, encourage enrollment in retirement plans and expand savings incentives for low-income households. It is also likely to include new limits on aggressive tax deals known as syndicated conservation easements. Prospects for a broad bipartisan agreement on tax breaks for businesses and families are dim."

A Sunday New York Times (NYT) story about reasons for Democrats to feel optimistic heading into 2023 said: "The average price of a gallon of gasoline has fallen to $3.18 from a height of $5.02 in June. And even though Americans are still feeling pretty sour about the overall state of the economy, the overall rate of inflation rose by 7.1 percent in November — still a lot, but less than expected. Twelve Republican senators voted for the same-sex marriage law that Biden championed, a recognition of just how far public opinion has moved on the issue over the last decade. If all goes as planned next week, Congress also looks poised to pass an overhaul of the Electoral Count Act, a major bipartisan victory led by Senators Susan Collins of Maine and Joe Manchin of West Virginia. The legislation, which will be tucked into the $1.7 trillion year-end spending bill, was designed to prevent a repeat of … [what] unfolded on Jan. 6, 2021."

Congress — According to the Periodical Press Gallery, "The Senate will convene at 3pm on Monday, December 19. At 5:30pm, the Senate will proceed to a roll call vote on either the nomination of Martin J. Gruenberg to be a Member of the Board of Directors of the Federal Deposit Insurance Corporation or in relation to the Omnibus."

House guidance to members at the end of last week said, "Members are advised that pending Senate action on the Omnibus, the earliest the House is expected to meet is Wednesday, December 21st, with first votes of the week postponed until 6:30 p.m. Members are further advised that the House is also expected to meet on Thursday, December 22nd and will stay in session until the Omnibus is completed."

Tax — The Bloomberg Daily Tax Report this morning reported: "Itai Grinberg, a Treasury Department official who has helped lead the US's participation in the 2021 global tax agreement, confirmed Friday at a George Washington University Law School conference that he is leaving Treasury to return to academia. Grinberg also said Friday that while US remains strongly supportive of the OECD's global tax agreement in the wake of a rival United Nations proposal on international tax cooperation, everyone should decide on a single unified approach."

Health — A December 17 NYT story discussed how "Federal health officials are proposing an extensive set of tougher rules governing private Medicare Advantage health plans, in response to wide-scale complaints that too many patients' medical claims have been wrongly denied and that marketing of the plans is deceptive."


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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