Senate Finance Committee Chairman Mike Crapo (R-ID) March 12 made a more detailed case in favor of adopting a current policy baseline that wouldn't count the cost of extensions of Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025, saying there are a multitude of other tax proposals the package must accommodate. "It's a bigger deal than everybody is focused on," Chairman Crapo said at a U.S. Chamber of Commerce event. He enumerated potential add-ons such as a Child Tax Credit expansion for those earning under $400,000 annually — which hasn't really been part of the public discussion of a GOP-only 2025 tax bill thus far — and President Trump's tax proposals, Tax Notes reported.

A broad group of Republican Senators want to make the expiring TCJA provisions permanent by using a current policy baseline and are concerned that the current law baseline assumed in the House budget resolution doesn't provide sufficient space to achieve that. Crapo said it is imperative that Trump tax proposals — the president in his March 4 address called for no tax on tips, overtime, and Social Security benefits, plus cutting taxes on "domestic production and all manufacturing" — be included in the package, and that there is a range of cost projections for those add-ons, depending on how they are designed.

House Ways & Means Chairman Jason Smith (R-MO) and Budget Committee Chairman Jodey Arrington (R-TX) have said the $4.5 trillion reconciliation instruction in the House budget allows for TCJA provisions to be extended for 8-10 years, and revenue sources could be found to pay for more tax cuts. The House and Senate must agree to the same budget resolution to allow for a reconciliation bill, and while Ways & Means is already holding meetings to sort out their bill, Senate Republicans don't appear near voting on the House resolution or striking a deal to change it. Finance Committee Republicans met at the White House yesterday (March 13) to discuss issues surrounding the bill, and President Trump backed a current policy approach.

"If you are going to make the tax code permanent, by definition it's going to be with current policy," said Senator Steve Daines (R-MT) in a Politico report, and he affirmed that Trump is on board with the approach. There were no real breakthroughs though. Senate Majority Leader John Thune (R-SD) said, "I don't know that we solved anything. We got what we needed — just some kind of direction and feel for where the president wants all this to land." Congress is out next week, and there is no clear picture of when the House and Senate may arrive at a unified budget that is required to unlock the budget reconciliation process.

In separate remarks at the White House March 13, President Trump renewed his call for "one big, beautiful bill, where we put the taxes in, we put everything in," including "tremendous incentives for companies coming into our country and employing lots of people." He further said, "We've got to get that done, and that will put our country in a position like it's never been. And it's a reduction of taxes. Its tremendous incentives for companies to come from all over the world into our country … It provides for everything. It's a big, beautiful bill, and I hope we can get it approved. And that'll be next."

International tax — Morning Tax cited Chairman Crapo as saying members await the Treasury report on options to respond to the OECD Global Tax Deal, to be delivered to the President within 60 days of the January 20 Executive Order. "Crapo said he expected good recommendations from that report, and that Senate Republicans also had a favorable view of a bill from Ways and Means Republicans that seeks to retaliate against foreign governments looking to squeeze more taxes out of American businesses. 'We are anxiously looking forward to what the president's team tells us are the steps that we need to take,' Crapo said."

Government funding — Senate Democratic Leader Chuck Schumer (D-NY) said he would support the House-passed continuing resolution (CR) to fund the government through the end of the fiscal year on September 30, significantly increasing the odds that there will be the requisite Democratic votes to approve the measure in the Senate. Democrats have opposed the CR due to concerns about the Administration not adhering to spending levels and cuts to the federal workforce, and wanted a shorter stopgap measure, but Schumer said the consequences of a potential government shutdown would be worse.

Debt limit — The focus on a reconciliation tax bill and government funding has overshadowed the need for Congress to address the debt limit by sometime midyear. The House budget resolution provides for a debt limit increase and, while there has been little public discussion about it, Ways & Means Chairman Smith is still pushing for that approach. Semafor reported March 12 that Leader Thune doesn't think addressing the debt limit can be accomplished in a tax reconciliation bill and Senator Tommy Tuberville (R-AL) warned that tying the issue to tax cuts "might just sabotage the whole bill."

Health care — On March 12, Senators Thom Tillis (R-NC), Chris Coons (D-DE), John Cornyn (R-TX), and Michael Bennet (D-CO) introduced the Medical Supply Chain Resiliency Act (S. 998) to provide the United States with greater ability to engage in trade negotiations. Specifically, it would authorize the President to enter into trade agreements for the reciprocal elimination of duties or other import restrictions with respect to medical goods to contribute to the national security and public health of the US.

Crypto — The Senate Banking Committee on March 13 reported out a major digital assets bill regulating payment stablecoins by a bipartisan vote of 18-6. The markup of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, S. 919 — sponsored by Bill Hagerty (R-TN), Cynthia Lummis (R-WY), Kirsten Gillibrand (D-NY), Chairman Tim Scott (R-SC) and Angela Alsobrooks (D-MD) — represented the first time a Senate committee has approved a regulatory system for digital assets, although payment stablecoins are only a part of the universe of cryptocurrency. Members in the Senate and House remain at work on broader bills laying out a market structure regulatory framework for digital assets. The five Democrats who voted with all Republicans in support of the stablecoins legislation were Sens. Mark Warner (VA), Angela Alsobrooks (MD), Ruben Gallego (AZ), Lisa Blunt Rochester (DE) and Andy Kim (NJ).

The committee adopted a bipartisan manager's amendment incorporating several changes sought by Sen. Warner and others. The committee rejected, on party lines, a stream of amendments from Democrats that would have, among other changes, blocked Big Tech companies from issuing stablecoins; denied licenses to issuers with a history of helping to evade financial sanctions or facilitating fentanyl trafficking; and narrowed the list of permitted investments for stablecoin issuers to ultra-safe assets. Bill sponsors said many of the changes Democrats proposed were unnecessary because of the bill's existing safeguards, or because they were issues that would be addressed in a later market structure bill. The Banking Committee also passed another bill, Chairman Scott's FIRM Act, related to "debanking" of certain customers. It would bar regulators from using reputational risk as a criterion for supervising financial institutions. That bill passed on a party-line vote of 13-11.

Today, March 14 at 12 p.m. is the EY Webcast, "Tax in a time of transition."

What to Expect in Washington will not be published while Congress is out next week.