This week (March 10 - 14)

Congress: The House and Senate are in session before a one-week recess for both chambers the week after.

With the expiration of government funding looming on March 14, this week will be pivotal for preventing a shutdown. A "clean" continuing resolution (CR) that most or all Republicans may need to support for it to pass — Democrats are opposed to a yearlong CR due to concerns about the Administration's scrutiny of spending and the federal workforce, and spending levels not being adhered to — is expected to be released soon, for a House vote on Tuesday.

Ways & Means: The House Ways & Means Health Subcommittee has set a hearing, "After the Hospital: Ensuring Access to Quality Post-Acute Care," for Tuesday, March 11 at 2 p.m.

Finance: The Senate Finance Committee has set a hearing to consider the nomination of Mehmet Oz to be Administrator of the Centers for Medicare and Medicaid Services for Friday, March 14 at 10 a.m.

Last week (March 3 - 7)

President's address: President Trump discussed economic policies in his address to Congress March 4, tax and trade especially, and made his case for imposing tariffs. On taxes, the President called for "permanent income tax cuts" — and suggested Democrats vote for them — and continued to call for no tax on tips, no tax on overtime, and no tax on Social Security benefits. He also called for cutting taxes on "domestic production and all manufacturing," and said 100% expensing, currently phased down under the TCJA, would be retroactive to January 20, 2025. "It was one of the main reasons why our tax cuts were so successful in our first term, giving us the most successful economy in the history of our country," he said.

Budget reconciliation: The focus of efforts to craft a unified House-Senate FY2025 budget resolution, to unlock the budget reconciliation process Republicans want to use to extend Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025, is on now timing and sequencing. Politico reported that House Ways & Means Committee Republicans "are tentatively scheduled on March 10 and 12 to start drafting the GOP's party-line bill enacting President Donald Trump's tax agenda," while Senate efforts to address issues related to the two chambers adopting the same budget resolution along the lines of what the House approved February 25 have not measurably progressed. Majority Leader John Thune (R-SD) said that any Senate vote related to the House budget wouldn't occur until after a congressional recess the week of March 17.

Assembling the combination of pieces that can get essentially all Republicans in Congress on board for the budget reconciliation process to extend TCJA provisions continues. Semafor reported the objections of Finance Committee members Bill Cassidy (R-LA), whose doubts were reported previously, and Todd Young (R-IN) to a current policy baseline, which doesn't count the cost of extending tax cuts and is seen as the best opportunity to make expiring provisions permanent. "Cassidy is worried about keeping interest rates low and Young is 'pushing for the most fiscally responsible approach to ensure sustained economic growth,' according to a spokesperson," the story said. Support for making TCJA provisions permanent through a current policy baseline is widespread among Senate Republicans, and some Finance members formalized in a letter the demand that they will accept nothing less than permanent provisions.

"It's not clear at this point at least how we might proceed on that. … Part of it will be determined by making sure all our members are on board with that idea and concept," Senate Majority Leader John Thune (R-SD) said in a Politico story. A current policy baseline hasn't been used in reconciliation, and advocates mostly point to the precedent of using the approach for the extension of the Bush tax cuts at the end of 2012, but that was in a bipartisan bill outside of the budget reconciliation process. A Joint Committee on Taxation letter to Senate Democrats said a current law baseline is the default for JCT estimates but members asked for current policy estimates ahead of the 2012 bill, and sometimes different members had different definitions of current policy.

Government funding: These developments on reconciliation and the budget resolution come as Congress likely pivots to addressing the expiration of government funding looming on March 14. House Speaker Mike Johnson (R-LA) and President Trump have said efforts would focus on a continuing resolution (CR) of current funding levels through the end of the fiscal year on September 30. Top Democrats are opposed to that approach and may withhold support for a funding measure due to concerns about the Administration's scrutiny of spending and the federal workforce and spending levels not being adhered to. While some conservatives traditionally oppose CRs, House Freedom Caucus members met with the President at the White House this week and some said they would support the plan. "Conservatives will love this Bill, because it sets us up to cut Taxes and Spending in Reconciliation, all while effectively FREEZING Spending this year," President Trump posted.

Treasury hearing: The March 6 Senate Finance Committee hearing on the nomination of Michael Faulkender to be Deputy Secretary of the Treasury included discussion of IRS technology and staffing concerns, as well as global tax issues. Ranking Member Ron Wyden (D-OR) raised concerns about federal government personnel cuts, including up to 50% of the IRS workforce, as well as about the future of clean energy tax credits. Faulkender said the government should "not put a thumb on the scale when it comes to the source of energy that any particular locality chooses to power itself with." Senator Wyden responded, "The law specifically stipulates technological neutrality, so nobody's putting their thumb on the scale and basically, what we're saying is let's give science a chance to come up with new approaches, and that's why we have technological neutrality. I hope that you'll look at it again."

Some Republicans raised issues related to the OECD-led global tax agreement. Senator Marsha Blackburn (R-TN) said, "the OECD's Pillar 1, Pillar 2, the GMT — you're looking at U.S. companies paying nearly 40 percent of the burden when it comes to the Pillar 2 taxes, and you've got … [state-owned companies in other countries] paying nothing, and of course, this hurts us, and also some countries that are putting in place DSTs. Again, that is something else that hurts us, it disadvantaged us. Talk about what you can do to reassert U.S. leadership on the global stage in dealing with these unfair taxes."

Faulkender said, "Pillar 1, looking at digital service taxes at the OECD. Pillar 2, the global minimum tax. The concern we have is that both of them disproportionately targeted American firms [and] that there are not enough safeguards in there in those negotiations to recognize the tax structure that we have in the United States. That's why the President issued an executive order calling on Treasury to reevaluate our participation in these OECD negotiations and to make sure that … United States firms are not disproportionately discriminated against in the way that other countries tax US multinational activities in those countries."

Cryptocurrency: The Senate on Tuesday (March 4) voted to repeal a Biden-era regulation requiring some cryptocurrency platforms to report their customers' transactions to the Internal Revenue Service. The vote on the joint resolution (S.J. Res. 3), sponsored by Sen. Ted Cruz (R-TX), was 70-27, with 17 Democrats voting in support, including Minority Leader Chuck Schumer (NY), along with independent Angus King (ME). The resolution was offered under the Congressional Review Act, which allows the repeal of agency regulations with a simple majority vote in the Senate if the resolution is acted upon within a certain time frame of the rule's publication in the Federal Register. The House Ways and Means Committee reported out the resolution last week and the full House is expected to vote on it soon. It would represent the first time Congress has eliminated a tax rule using the CRA.

The IRS finalized the rule in December as part of its implementation of the 2021 infrastructure law, for which the crypto tax reporting regulation was a pay-for. The rule requires decentralized finance platforms to report detailed information on customers' transactions to the IRS, starting with tax year 2027. The Biden administration had argued that the regulation would be parallel to similar rules on tax reporting for securities, like stocks and bonds, but the digital asset industry said the requirements would be overly burdensome, the Wall Street Journal reported. JCT has estimated that repealing the rule would cost $3.9 billion in revenue over 10 years. Republicans in Congress are planning several more CRAs to repeal Biden-era regulations in areas such as oil and gas drilling, limits on bank overdraft fees, appliance standards and rubber tire manufacturing.

Bill intros: Ways & Means members Vern Buchanan (R-FL) and Mike Kelly (R-PA) March 3 introduced the American Innovation Act that would quadruple the amount of start-up costs small business owners can deduct from their federal income taxes, raising it from $5,000 to $20,000. Additionally, the bill would increase the threshold for deductions from $50,000 to $120,000 for start-up expenditures like advertising, employees' salaries and benefits, rent, and utilities for new office space.

On March 5, Ways & Means member Carol Miller (R-WV) reintroduced the Saving Gig Economy Taxpayers Act (H.R. 1882) to restore the 1099-K threshold level of $600 back to the original $20,000 and 200 transactions, repealing the change enacted under the American Rescue Plan Act.