March 18, 2024 What to expect in Washington (March 18) The House and Senate are in session this week, both beginning on Tuesday, March 19, ahead of the two-week Spring recess March 25-April 5. The second six-bill tranche of spending bills, on appropriations that are traditionally a heavier lift like Labor-HHS and Homeland Security, expires after March 22. "Negotiators are still working furiously around the clock to finish their work on the remaining six bills … " CNN reported March 15. "If this feels familiar, that's because this is the fifth time since September that lawmakers have run up against a funding deadline, passing stopgap bills in the nick of time in September, November, January and earlier this month to keep the government running." Roll Call reported last night: "Lawmakers are back to writing a full-year fiscal 2024 Homeland Security appropriations bill in a dramatic, last-minute shift following White House intervention over the weekend … Appropriators had been working on a yearlong stopgap measure, negotiating necessary changes to the fiscal 2023 status quo to be included as 'anomalies,' after talks on a full-year bill initially fell apart late last week. That continuing resolution was expected to be packaged with the five remaining fiscal 2024 appropriations bills. However, as lawmakers got ready to roll out the package the White House made a late-inning request for $1.56 billion in border-related funding, arguing that a CR through Sept. 30 would be insufficient to meet existing needs." The Washington Post reported March 17: "A dispute over border security funding threatens to force a shutdown of vast swaths of the federal government in less than a week, as Congress and the White House struggled Sunday to reach a deal on long-term spending legislation. Funding for roughly 70 percent of the federal government — including the departments of Defense, State and Homeland Security as well as the IRS and Transportation Security Administration — will expire Saturday just after midnight unless Congress acts before then. A prolonged shutdown could have cascading effects on the government and economy. Two-thirds of IRS employees would face furloughs at the height of tax filing season." Congress — House bills to be considered under suspension of the rules on Tuesday include several Foreign Affairs Committee bills and H.R. 766, the Dr. Michael C. Burgess Preventive Health Savings Act, "to direct the Congressional Budget Office, at the request of the Chair and Ranking Member of the Committee on the Budget and of the relevant authorizing committee, in each respective chamber, to estimate the budgetary effects over a 30-year period of legislation related to preventive health care services." "Energy week" bills to be considered by the House include:
The next Senate vote is on Tuesday, March 19, at 5:30 p.m. on confirmation of Nicole Berner to be United States Circuit Judge for the Fourth Circuit. An analysis in the Sunday Washington Post that focused on Rep. Ken Buck (R-CO) resigning from Congress at the end of the week (March 22) said he is "the sixth member of the House in the 118th Congress to quit, with no other public office lined up" and "it's clear that over the last four decades, at least, the House hasn't seen this many people just quit public service in the middle of their term." Rep. Buck's departure will leave Republicans with a 218-213 majority and four vacancies. The analysis said there are 45 House members who are planning to serve through the remainder of the Congress but not run for re-election, in some cases because they are running for another office. Hearings - The Senate Finance Committee has scheduled its customary post-Budget release hearing with Treasury Secretary Janet Yellen on the President's Budget for Thursday, March 21 at 10 a.m. Secretary Yellen isn't expected to appear before Ways & Means until early April, after the Spring recess March 25-April 5. On Wednesday, March 20 at 2:30 p.m., the Finance Committee will hold a hearing on The President's Fiscal Year 2025 Social Security Administration Budget with Commissioner Martin O'Malley. The Ways & Means Committee has scheduled:
Tax - A Wall Street Journal weekend editorial, "All the President's Medicare Taxes," noted that President Biden's FY2025 Budget proposes to eliminate the Net Investment Income Tax (NIIT) exemption for sole proprietors, partnerships, and S corporations. "Progressives say many accountants, lawyers and white-collar professionals are skirting taxes because they benefit from this exemption. But so do many plumbers, farmers and mom-and-pop shop owners. The Biden budget would eliminate the exemption … Mr. Biden also wants to increase this surtax on earned and unearned income to 5% for couples earning more than $450,000 ($400,000 singles)," the editorial said. "On top of that, he calls for raising the top rate on ordinary income to 39.6% from 37%. This would raise the top effective marginal rate to 44.6% … " The Affordable Care Act (ACA) added to the existing combined employer and employee Medicare or hospital insurance (HI) rates of 2.9% an additional HI tax of 0.9%. The law also imposed a 3.8% NIIT on unearned income of high-income individuals, estates, and trusts. The President's FY2025 Budget proposes to:
The editorial also noted that "President Biden wants to apply the top 44.6% rate to capital gains for anyone earning more than $1 million — effectively doubling the current 23.8% tax on capital gains." Of course, the future of Medicare and Social Security is a major issue in the presidential election. Asked on NBC's Meet the Press about President Biden having a plan that involves raising taxes on businesses and former President Trump saying he would be open to cutting Social Security before walking those comments back, Senate Finance Committee Member Bill Cassidy (R-LA) said, "Well, define 'protect Social Security.' Neither candidate has put up a plan that will prevent the mandatory 24% cut in benefits when the trust fund goes bankrupt. And by the way, Biden's plan, he's already proposed $4.2 trillion on wealthier Americans, and now he's going to tax them again for this. At some point, you could confiscate the wealth of wealthier Americans and you wouldn't achieve everything that he's saying that he's going to do. This is, kind of, like, his go-to, 'I'm going to tax wealthier Americans to' fill in the blank. It's just not practical, the way he's proposing it. But it gives him a talking point." An EY Tax Alert, "US FY2025 Budget contains international tax proposals, mainly stemming from prior budgets," is available here. Friday, March 22 is the EY Webcast, "Tax in a time of transition: Legislative, economic, regulatory and IRS developments."
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