July 24, 2023
What to expect in Washington (July 24)
The House is back in session on Tuesday, July 25, with votes beginning at 6:30 p.m. on suspension bills including the U.S. Supply Chain Security Review Act (H.R. 3395), to require the Federal Maritime Commission to study the effects of foreign ownership of domestic marine terminals on U.S. economic security; and the Securing Semiconductor Supply Chains Act (H.R. 752), to require the SelectUSA program to solicit comments from state economic development organizations regarding federal efforts to increase foreign direct investment in semiconductor-related manufacturing and production.
Business later in the week includes appropriations bills on Military Construction, the Department of Veterans Affairs, and Related Agencies (H.R. 4366) and Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (H.R. 4368). Neither is controversial compared to some of the other dozen annual spending bills, but floor consideration is expected to put a spotlight on demands by conservatives to cut spending even further than the FY2022 levels House GOP leaders agreed among themselves to adhere to. (Members of both parties backed this year's Fiscal Responsibility Act debt limit agreement to keep spending at FY 2023 levels, which conservatives were unsatisfied with.) In the opposite direction from the House, Senate Appropriations Chair Patty Murray (D-WA) and Vice Chair Susan Collins (R-ME) have said they will pursue a supplemental emergency funding appropriations bill to boost appropriations levels by $13.7 billion above the FRA caps. Those disparities suggest an impasse over government spending is brewing ahead of the September 30 expiration of current funding.
Politico reported last night: "Both parties have long anticipated a September showdown over keeping the government funded. This week, House Republicans will take their first shot in the fiscal battle. House GOP leaders are hustling to build enough support to pass two of their easier annual spending bills among the broader group of a dozen proposals — most of them dogged by unpopular spending cuts, billions of dollars in rescinded cash and controversial attempts to make policy using the federal purse. If Republicans can pass either of those two bills before leaving Washington for their August recess, they will have scored the first wins of the season on spending."
The House schedule doesn't include the Ways & Means-passed (June 13) American Families and Jobs Act that addresses the TCJA "pre-cliffs" relating to Section 174 R&D expensing, Section 163(j) interest deduction limitations, and 100% expensing, suggesting the bill may not be considered prior to the August recess.
The Senate will next convene at 3 p.m. on Tuesday, July 25, with two votes at 5:30 p.m. in relation to S. 2226, the FY2024 National Defense Authorization Act.
After this week, the current Senate and House schedules have the Senate out for five straight weeks and the House out for six straight weeks.
ERTC hearing — The House Ways and Means Oversight Subcommittee will hold a hearing on the backlog of Employee Retention Tax Credit (ERTC) processing, Internal Revenue Service response to inquiries about ERTC credits, and the impact of fraud on those legitimately trying to claim the credit on Thursday, July 27, 2023 (2 p.m.).
Retirement — A Wall Street Journal article discussed using a tax-advantaged annuity to help avoid outliving retirement savings. "Starting this year, Americans can use up to $200,000 of their retirement accounts to purchase qualified longevity annuity contracts, or QLACs. The new contribution limit, set by Congress, is up from $145,000 or 25% of your balance, whichever was lower," the article said. (QLCA changes were included in the year-end 2022 SECURE 2.0 package.)
Health care - The Senate Finance Committee will hold a markup of pharmacy benefit manager (PBM) legislation on Wednesday, July 26 (2 p.m.).
The Senate Health, Education, Labor & Pensions Committee will hold a markup of "The Primary Care and Health Workforce Expansion Act" on Wednesday, July 26 (10:30 a.m.).
Global tax — An EY Alert, "OECD/G20 Inclusive Framework releases additional Administrative Guidance on Pillar Two GloBE Rules: Detailed review," is available here.