March 20, 2023
What to expect in Washington (March 20)
The Senate will come back into session at 3 p.m. on Tuesday, March 21, with a vote at 5:30 p.m. on the motion to proceed to S. 316, a bill to repeal the authorizations for use of military force against Iraq (the Iraq war began 20 years ago today). The House Republican retreat is underway in Orlando, and the chamber won't return to session until Wednesday, March 22. House business this week includes the Parents Bill of Rights Act (H.R. 5) to codify rights to access information about a child's education.
Trade — The Senate Finance Committee has noticed a hearing on "The President's 2023 Trade Policy Agenda" for Thursday, March 23 at 10 a.m. One topic for discussion may be Sec. Yellen's recent comments that limited free trade agreements focused on battery minerals with the European Union and other nations won't need approval from Congress, which members from both parties cited concerns about during her March 16 Senate Finance Committee hearing. Chairman Ron Wyden (D-OR) said he has "serious concerns about the approach the administration has taken to implementing the portion of the Inflation Reduction Act that deals with sourcing critical minerals. Free Trade Agreements cannot be unilaterally decided by the Executive Branch. They require consultation and consent from Congress. That includes any agreements on critical minerals." Senator James Lankford (R-OK) expressed similar concerns.
The critical mineral and battery component EV requirements under the Inflation Reduction Act (IRA) require a certain percentage to be derived from the US or a country with which the US has a free-trade agreement or recycled in North America.
A March 19 Wall Street Journal story said the IRA doesn't define "free-trade agreement" nor do existing trade and tax laws. "Officials under the last two administrations have opted for arrangements that bypass congressional involvement, worried that formal trade deals would fail or take too much time for approval in a sharply divided Congress," the report said. "Rather than expanding market access through tariff cuts, the current generation of agreements focus on areas such as supply chains and digital trade, which the administration says don't require congressional signoff because they don't involve tariff policy." The report also said, "Along with the EV minerals deal, Biden administration officials are now accelerating negotiations on several other agreements, including the Indo-Pacific Economic Framework, or IPEF, Mr. Biden's most ambitious trade initiative, which seeks to enhance ties with more than a dozen friendly nations … "
President Biden and European Commission President Ursula von der Leyen March 10 released a statement on an agreement related to the IRA vehicle credit. "We will deepen our cooperation on diversifying critical mineral and battery supply chains, recognizing the substantial opportunities on both sides of the Atlantic to build out these supply chains in a strong, secure, and resilient manner," they said. "To that end, we intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act."
Banking — Senator Elizabeth Warren (D-MA) March 19 wrote to the Inspectors General at the Department of Treasury, the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve, urging them to immediately open a "thorough, independent investigation of the causes of the bank management and regulatory and supervisory problems that resulted in this month's failure of Silicon Valley Bank (SVB) and Signature Bank (Signature), and deliver preliminary results to Congress and the public within 30 days."
Senator Warren said on Meet the Press yesterday: "So, the problem we now face is two-fold, as you describe this. What are we going to do to make sure that the banks across this system are stable? That is, these big banks. The little community banks, they're doing great. But these banks that are multibillion-dollar banks, how are we going to make sure that they are stable and that we've got a set of rules in place going forward that will keep them safe? So, I want to see an independent investigation. The Fed just doesn't get to investigate itself. I want to see us make a change in the laws, roll back the rollbacks to put tougher regulations in place. And we finally need to step in and say, these bank CEOs, we've got to align them so that there are clawbacks, they're giving up on these big salaries, and they don't get to go into banking again if they explode a bank. So that's how I see the overall system right now."
Health — A Finance hearing on "The President's Fiscal Year 2024 Health and Human Services Budget" with HHS Sec. Xavier Becerra is set for Wednesday, March 22 at 10 a.m.
The House Ways and Means Health Subcommittee will hold a hearing on "Why Health Care is Unaffordable: The Fallout of Democrats' Inflation on Patients and Small Businesses" on Thursday, March 23 at 2 p.m.
Tax — An EY Alert, "FY2024 Budget includes few new international tax proposals, largely reprising proposals from prior budgets," is available here.