The House is now out of session until September 9 after cancelling votes the week of July 29. Republicans approved the Interior-Environment appropriations bill (H.R. 8998) 210-205 on July 24 but reports suggested that may be the last regular spending bill to move, with others shelved amid internal disputes. The House has passed 5 of the 12 annual appropriations bills: Military Construction-Veterans Affairs; Defense; Homeland Security; State-Foreign Operations; and Interior.

House Republican appropriations bills include spending cuts and policy riders opposed by Democrats and likely to be dropped in any compromise with the Democratic-controlled Senate later this year. Some are questioning the rationale for the partisan bills. Punchbowl News Wednesday: "Senior House Republicans and aides describe deep frustration with Johnson and the GOP leadership over their plans to jam through spending bills despite overwhelming opposition to these measures from Democrats, the Senate and the White House. This has forced vulnerable House Republicans into votes on bills that have no chance of becoming law."

The Senate Appropriations Committee, which has taken a more bipartisan approach, has passed seven of the annual bills in two batches: Commerce-Justice-Science, Interior-Environment, State-Foreign Operations, and Transportation-Housing and Urban Development (HUD) this week; and Legislative Branch, Agriculture-FDA, and Military Construction-VA Bills previously. The expiration of government funding and the farm bill loom on September 30. A continuing resolution (CR) to patch government funding beyond September 30 is expected and there is already speculation about whether Republicans want it to extend until December or January, when the party could have more control in Congress. The farm bill could also get a short-term extension until after the elections, with disputes over food assistance and other issues currently unresolved.

A Congressional Research Service (CRS) status table on appropriations bills is available here.

Tax Court — The Senate is currently out until 3 p.m. on Monday, July 29, and in next week before recessing until September. Two Tax Court judges were approved this week: Kashi Way, who has served on the Joint Committee on Taxation (JCT) staff, was approved by a 79-16 vote, and Adam Landy 85-12. During opening statements of a July 25 executive session to consider a second tranche of three Tax Court nominations, Finance Chairman Ron Wyden (D-OR) said he is working to bring Rose Jenkins' nomination to the floor for a final confirmation vote as soon as possible and Senate Majority Leader Chuck Schumer (D-NY) "has assured me it's also a priority for him." Only Wyden and Ranking Member Mike Crapo (R-ID) were present at the session; the votes were subsequently held off the floor; and the Committee approved the nominations of Jeffrey Arbeit (who has also served on the JCT staff) and Benjamin Guider both 27-0, and Cathy Fung 19-8.

Online safety — Leader Schumer said the Senate is "on a glide path to final passage early next week" for a package encompassing the Kids Online Safety Act (KOSA) and the Children's and Teens Online Protection Act (COPPA) after an 86-1 procedural vote on Thursday. "Social media companies would be required to develop safeguards to keep children and teens safe from harmful content online, strengthen privacy protections for minors, and provide teens with greater control over their personal data," according to a Bloomberg Government summary. Not all Senators are supportive. Chairman Wyden tweeted concerns with the package, including that "I fear KOSA could be used to sue services that offer privacy technologies like encryption or anonymity features that kids rely on to communicate securely and privately … "

Tax — The focus on the online safety package is viewed as a sign that the Senate won't hold a pre-August recess vote on the House-passed Tax Relief for American Families and Workers Act (H.R. 7024) that would expand the Child Tax Credit and the Low-Income Housing Tax Credit (LIHTC); address the TCJA pre-cliffs on IRC Section 174 five-year R&D amortization, 163(j) interest deductibility, and bonus depreciation; and provide disaster relief and tax treaty benefits with Taiwan.

Even with the House out of session until after Labor Day, Republicans are expected to continue during the August recess laying the groundwork for addressing the TCJA provisions that expire at the end of 2025, with the Ways & Means GOP tax teams active and at least one Committee field hearing expected. Republicans generally are highlighting the success of the TCJA in reinvigorating the economy post-2017 and making the case for extension of the individual and pass-through provisions.

Former VP Mike Pence and former Senator Pat Toomey (R-PA), who both also served in the House, authored a joint Wall Street Journal op-ed, "If Republicans Don't Win, Get Ready for a Tax Hike," that argued that the TCJA "helped produce the Trump boom" of economic growth after the 2008-09 financial crisis and period of "weak growth" from 2009 to 2016. "Many American multinational companies kept foreign subsidiaries' profits overseas to avoid punitive U.S. taxes. Others moved their headquarters abroad to reduce their overall tax burdens. These so-called corporate inversions were economically rational, but they cost the U.S. jobs, investment and tax revenue," the op-ed said. "The TCJA changed this dramatically by reducing the federal corporate rate to 21%, modernizing the taxation of profits earned by foreign subsidiaries of U.S. companies, and broadening the profit base on which lower rates apply."

Similarly, in a Washington Examiner op-ed, Ways and Means Committee Vice Chairman Rep. Vern Buchanan (R-FL), chair of the American Manufacturing Tax Team, and National Association of Manufacturers (NAM) President and CEO Jay Timmons, called for action to prevent "a wave of tax increases set to fall on Americans next year, particularly on the heart of the economy — manufacturers and their workers." The op-ed said: "In 2018, manufacturers added 263,000 new jobs, the best year for job creation in manufacturing in 21 years. That same year, manufacturing wages increased by 3%. They continued growing by 2.8% in 2019 and by 3% in 2020. These were the fastest rates of annual manufacturing wage growth in decades."

Insurance — A bill introduced July 23 by Senators Thom Tillis (R-NC) and Bob Casey (D-PA), the Secure Family Futures Act (S. 4740), would repeal the current capital tax treatment of debt investments held by life insurers, such as bonds, and apply ordinary tax treatment to them.

Energy tax — A Politico story this morning, "Biden made history with his climate actions; Here's how Trump could unravel them," said while a Trump-led Treasury Department "couldn't fully repeal the credits without the help of Congress, it could revise the pending rulemakings to limit who could qualify while still working within the confines of the underlying law." The clean hydrogen credit guidance is still in the proposed stage, which "means a Trump administration could scrap the proposal and loosen the interpretation to favor fossil fuel companies instead," the story said.

On July 24, IRS issued Notice 2024-60 to provide initial guidance on the credit for the sequestration of carbon oxide. The Notice describes information that must be included in a written report known as the lifecycle analysis (LCA) report and provides the procedures a taxpayer must follow to submit the report along with required supporting information to the IRS and the Department of Energy for review.

Global tax - On July 25, Ranking Member Crapo and Finance members Steve Daines (R-MT) and James Lankford (R-OK) sent a letter to Senate appropriators requesting that the FY2025 Appropriations Bill prohibit any Part II funding or voluntary contributions to the OECD, an organization that they said "leads the anti-American global tax negotiations that will hinder American competitiveness, send U.S. taxpayer dollars to European bureaucrats, and cause American job losses, yet the U.S. unfairly pays the largest contributions." (The House State-Foreign Operations bill proposes to strip OECD funding.)