The House and Senate are in session, facing a September 30 deadline to extend government funding and other programs, for what is scheduled to be the last workweek until after the elections. House and Senate negotiators last night released a bipartisan continuing resolution (CR) to extend government funding through December 20, along with extensions of other programs, including some health extenders and Medicare provisions.

The new CR, which follows House rejection last week of a funding measure into March 2025 along with a Republican voter ID bill, is expected to be cleared quickly in the House to give the Senate requisite time to clear procedural hurdles. Speaker Mike Johnson (R-LA) told members, "Since we fell a bit short of the goal line, an alternative plan is now required. The feedback and ideas from everyone have been very helpful, and next week the House will take the initiative and pass a clean, three-month CR to prevent the Senate from jamming us with a bill loaded with billions in new spending and unrelated provisions. Our legislation will be a very narrow, bare-bones CR including only the extensions that are absolutely necessary."

Expected passage of the government funding measure this week is expected to conclude Congress' business until after the elections. Control of the House, Senate, and White House in 2025 are up for grabs and the elections will have a major effect on how a longer-term government funding measure and other matters are handled during an expected lame-duck session in November and December. The December 20 deadline would provide a pre-holiday backstop for Congress to sort out its remaining business before year's end.

The House is back in today (Monday, September 23) with voting beginning at 6:30 p.m. and dozens of bills on the suspension calendar, including some from the Oversight and Accountability Committee, Energy and Commerce Committee, and Homeland Security Committee.

On Tuesday, September 24 (10:15 a.m.), there is a House Ways & Means Committee hearing on "Reforming Temporary Assistance for Needy Families (TANF): States' Misuse of Welfare Funds Leaves Poor Families Behind."

The Senate is back at 3 p.m. today (Monday, September 23) with a confirmation vote on the nomination of Rose Jenkins to be a Judge of the United States Tax Court set for 5:30 p.m.

A Senate Finance hearing related to Women's Health Care is set for Tuesday, September 24 (10 a.m.).

On Wednesday, September 25 (3 p.m.), there is a Senate Finance Subcommittee hearing, "Providing Small Business Relief from Remote Sales Tax Collection."

On Wednesday, September 25 (10:30 a.m.), there is a Hamilton Project at the Brookings Institution and the Tax Law Center at NYU Law Webinar, "Taking on tax: Modernizing partnership taxation," featuring a fireside chat with Senate Finance Committee Chairman Ron Wyden (D-OR).

Elections — Neither presidential candidate has released a fully developed tax plan, with Democratic presidential candidate Vice President Kamala Harris and Republican candidate Former President Donald Trump until now offering discrete proposals. Former President Trump will deliver remarks "outlining his plan to lower taxes for American business owners and highlight the importance of buying American made goods for our economy" in Savannah, Georgia on September 24, 2024, at 1 p.m., his campaign announced. Bloomberg reported that VP Harris told reporters Sunday she would deliver a speech "to outline my vision for the economy," but the report said plans aren't yet finalized.

A September 21 Wall Street Journal story cited VP Harris embracing a maximum 28% long-term capital gains and qualified dividends rate (33% all-in rate, including an increase to 5% in the NIIT and Medicare tax), which is lower than the ordinary income treatment proposed by the President, as an example of the influence of business executives that she has cultivated relationships with. "Executives have also pressed Harris to ditch more of Biden's major tax proposals in that blueprint. One plan would tax unrealized capital gains above $5 million at death. Another, which the administration calls the billionaire minimum income tax, levies taxes on some unrealized gains during life for people with a net worth over $100 million," the story said. "Harris hasn't specifically weighed in on taxing unrealized gains but has said she supports a billionaire minimum income tax. A Harris adviser said she is open to structuring that tax differently than Biden did, though the nontaxation of unrealized gains is the core problem it attempts to solve."

There were multiple press stories over the weekend about Nebraska awarding some electoral votes in the presidential contest by congressional district. This followed previous reporting that Wisconsin, Michigan and Pennsylvania could be a path to the presidency for VP Harris if she also wins a single electoral vote in the Omaha area, and that Former President Trump has pushed for the state to change its process for awarding votes. (Maine is the only other state to award some electoral votes by congressional district rather than the winner-takes-all approach taken in other states.)

"A single Republican state senator from Omaha, Mike McDonnell, has so far stood firm against a push by former President Donald J. Trump, national Republicans and the Nebraska G.O.P. to change Nebraska from a state that divides its electoral votes by congressional district to one that awards all of them to the statewide winner … " The New York Times reported. "If Ms. Harris were to win the so-called blue wall — Pennsylvania, Michigan and Wisconsin — while losing every other battleground state, Nevada, Arizona, Georgia and North Carolina, that one electoral vote would be the difference between a 270-268 Electoral College victory for the vice president or a 269-269 tie." A tie would be decided by the House, by the number of delegations, with the GOP likely to prevail.

Trade — During the September 20 House Ways & Means Trade Subcommittee hearing on "Protecting American Innovation by Establishing and Enforcing Strong Digital Trade Rules," Chairman Adrian Smith (R-NE) expressed concerned about the Biden administration no longer supporting "core, bipartisan digital trade rules in negotiations at the World Trade Organization and in the Indo-Pacific." He also said the Administration is also allowing "foreign governments treat American companies like a piggy bank by imposing new Digital Services Taxes," singling out Canada. Smith said the new USMCA dispute against Canada's DST a positive step, but "too little, too late" — the US should have been ready to act immediately. "Fecklessness on trade enforcement signals to foreign governments that aiming trade barriers at U.S. firms is fair game," he said.

Rep. Suzan DelBene (D-WA) highlighted her work toward a federal consumer data privacy law. She said that US Trade Representative Ambassador Katherine Tai "has maintained that one of the reasons the U.S. has paused digital trade talks is that they may limit the policy space needed to address domestic policy issues like privacy. Her argument is that by entering into digital trade agreements, the U.S. is given up its ability to regulate domestically." However, "if we step back from the negotiating table until Congress acts, we run a serious risk of harming the very objectives, such as defending American companies, protecting privacy, and supporting a free and open Internet, that have been core to U.S. policy for many years," she said.

As he has during other hearings, Rep. Ron Estes (R-KS) inquired about the OECD-led global tax agreement. He said, "Pillar 1 was supposed to provide clarity and stability around DSTs. But, instead, the Biden-Harris negotiators have put America last. And as we've talked about earlier, DSTs are proliferating." Estes asked whether there are "some equitable offsets to discourage foreign countries from thinking they can get away with transferring U.S. dollars."

Witness Robert Atkinson of the Information Technology & Innovation Foundation, said, "Pillar 1 is basically institutionalizing DSTs. That's all it is. Pillar 1 says you can do a DST, you just have to do it according to these rules … I think the U.S. administration and Congress need to come out and say, no, there's no logic behind Pillar 1." He suggested "mirror taxes" of a reciprocal nature, "to make it clear that they can't take U.S. taxpayer money," and pursuing trade enforcement options.

Publications — Recent WCEY and EY publications include:

• A WCEY brief, "AI in health care: a regulatory and legislative outlook"
• "This Week in Tax Policy" for the week ending September 20
• An EY publication, "Key tax issues business leaders are watching as 2025 nears"
• A broader discussion of policy issues US business leaders are focused on, "Public policy spotlight: 6 key issues for 2024 US elections"