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June 5, 2023

What to expect in Washington (June 5)

On Saturday, June 3, President Biden signed the Fiscal Responsibility Act of 2023, which the White House said "suspends the public debt limit through January 1, 2025, and increases the limit on January 2, 2025, to accommodate the obligations issued during the suspension period; establishes new discretionary spending limits, appropriates funding for the VA Toxic Exposures Fund, and rescinds certain unobligated balances; expands work requirements for certain Federal programs; modifies environmental review processes; and terminates the suspension of Federal student loan payments."

There have been several press accounts of how the deal came together, then was quickly processed: from announcement to bill signing was only a week's time, from Saturday (5/27) to Saturday (6/3). Principal negotiators were on Sunday political talk shows talking about what was in the bill and what they successfully kept out. Republicans have celebrated bringing President Biden to the negotiating table after his initial refusal and blocking of any Biden budget tax increase proposals, while Democrats touted the omission of major cuts to government health programs and major new work requirements.

On CBS's "Face the Nation," Rep. Garret Graves (R-LA) said, "Because the White House laid down about seven red lines, including that they wouldn't negotiate, that they wouldn't allow anything to be done on work requirements, that they wouldn't allow any changes to environmental laws, that they wouldn't allow us to take any funds from IRS agents, and on and on. And yet every single red line that they laid down, we crossed right over in negotiations, resulting in the largest savings in any legislation in the history of the Congress. This was a huge accomplishment, huge legislative wins."

On CNN's "State of the Union," Office of Management and Budget (OMB) Director Shalanda Young said, "Default was not an option … Certainly, one of our goals is to make sure we got nothing close to what you saw in the House Republican bill. That would have been unacceptable for us, unacceptable for congressional Democrats. So, we had to do everything in our power to make sure whatever was passed didn't have many of those elements, and we succeeded. It was a reasonable bipartisan agreement you would expect to see in divided government. I have done this a long time, and we had to talk about the budget at some point this year. And this is about what you would expect to see out of a budget agreement with divided Congress."

On the politics of the deal, the Wall Street Journal reported: "President Biden averted an economic catastrophe that could have hobbled his first term and hurt his chances at a second, and he did it using a tactic critics in his own party were wary of — cutting a deal with Republicans. It was the second time in a matter of weeks that Biden crafted a compromise that angered some fellow Democrats but helped defuse a potential crisis, after he dealt with the end of the pandemic-era Title 42 policy … The debt-ceiling and border episodes offer a blueprint for how Biden seeks to position himself in his re-election campaign as the Republican presidential race gets under way: As a deal maker capable of rising above the nation's divisions. White House officials also believe that the debt-ceiling deal clears the way for Biden to focus more on his economic vision for the country, which entails revitalizing manufacturing and bringing parts of the supply chain for key industries back to the U.S."

Tax - President Biden June 2 announced his intent to nominate Marjorie Rollinson as Chief Counsel for the Internal Revenue Service. IRS Commissioner Danny Werfel said in an announcement, "I am excited to share today that the White House just announced the nomination of Marjorie Rollinson to serve as the next IRS Chief Counsel. Marjorie brings a wide variety of experience from inside and outside government to this critical role, one of two Senate-confirmed positions at the IRS. This also marks a milestone for the nation's tax system. Marjorie, if confirmed by the Senate, would become the first woman to ever formally serve as IRS Chief Counsel, a position that dates back to 1866. While the Chief Counsel position has had several women serve temporarily in an acting capacity, there has never been a woman formally confirmed by the Senate to lead the Chief Counsel organization. Marjorie brings an extensive background to this important role, including experience in Chief Counsel during the past decade."

Congress — Today, the House will meet at 2:00 p.m. for legislative business and votes will be postponed until 6:30 p.m. Several financial services bills will be considered on the suspension calendar:

  • H.R. 835, Fair Investment Opportunities for Professional Experts Act, as amended
  • H.R. 1579, Accredited Investor Definition Review Act, as amended
  • H.R. 2608, To amend the Federal securities laws to specify the periods for which financial statements are required to be provided by an emerging growth company, and for other purposes, as amended (Sponsored by Financial Services Committee Chairman Patrick McHenry, R-NC)
  • H.R. 2610, To amend the Securities Exchange Act of 1934 to specify certain registration statement contents for emerging growth companies, to permit issuers to file draft registration statements with the Securities and Exchange Commission for confidential review, and for other purposes, as amended (Sponsored by Rep. McHenry)
  • H.R. 2593, Senior Security Act of 2023, as amended
  • H.R. 2793, Encouraging Public Offerings Act of 2023, as amended
  • H.R. 2812, Middle Market IPO Cost Act, as amended

Other House business this week includes the H.R. 277, the REINS Act of 2023, which revises provisions relating to congressional review of agency rulemaking. A description said, "Specifically, the bill establishes a congressional approval process for a major rule. A major rule may only take effect if Congress approves of the rule. A major rule is a rule that has resulted in or is likely to result in (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises."

The Senate will reconvene on Tuesday, June 6, with a vote at 5:30 p.m. related to the nomination of David Crane to be Under Secretary of Energy. Majority Leader Chuck Schumer (D-NY) announced May 30 that, in addition to potential action on the US-Chile tax treaty, near-term business could see the Senate "begin the process of advancing bipartisan legislation" on the topics of competition, artificial intelligence, prescription drug costs including for insulin, rail safety, etc.

Committee business scheduled for this week includes:

  • On Tuesday, June 6, the House Small Business Economic Growth, Tax and Capital Access Subcommittee will hold a hearing on "American Ingenuity: Promoting Innovation Through the Tax Code."
  • On Wednesday, June 7, the Senate Finance Committee and Small Business and Entrepreneurship Committee will hold a roundtable, "Tackling Tax Complexity: The Small Business Perspective," though it is not open to the public and will not be broadcast.
  • On Thursday, June 8, the Senate Foreign Relations Committee will hold a business meeting on matters including S. 1457, the Taiwan Tax Agreement Act of 2023.
  • Also on Thursday, June 8, the Senate Finance Committee will hold a hearing on "Consolidation and Corporate Ownership in Health Care: Trends and Impacts on Access, Quality, and Costs."


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