"Crypto Week" is off to a rocky start in the House, with some Republicans defying their leadership to sink the rule bringing three cryptocurrency bills to the floor. But there is a Ways and Means Oversight Subcommittee hearing today (Wednesday, July 16), "Making America the Crypto Capital of the World: Ensuring Digital Asset Policy Built for the 21st Century," that is expected to include discussion of the tax infrastructure of cryptocurrency ahead of the potential development of legislation.

"How do I make sure the tax code — the documents required for the tax code, those sorts of things — are in alignment with the rule set," Chairman Dave Schweikert (R-AZ) said in Morning Tax regarding his policy goal, adding that he's looking for "harmonization" among various committees of jurisdiction on a novel crypto framework. The Daily Tax Report said this morning, "Republicans are pushing for policy changes on traditionally bipartisan issues like cryptocurrency," but how much goodwill there will be with Democrats following the tax reconciliation bill is unclear.

Some tax issues related to cryptocurrency are unsettled. A 2023 Joint Committee on Taxation report said: "whether a digital asset, of any kind, is properly treated as a security or a commodity under any provision of the Code is unclear and has not been resolved by either Congress or Treasury. The principles motivating the policy underlying certain provisions may suggest that digital assets should be eligible for, or subject to, the same tax treatment. But with respect to certain other provisions, the exclusion of digital assets under present law from the same tax treatment seems consistent with the underlying policy."

Senators Cynthia Lummis (R-WY), a member of the Senate Banking Committee, and Kirsten Gillibrand (D-NY), a member of the Agriculture Committee, in previous Congresses have sponsored the Responsible Financial Innovation Act to create a comprehensive regulatory framework for crypto assets. They have said the bill "places crypto assets within the regulatory perimeter, requires all crypto asset exchanges to register, addresses decentralized finance, safeguards consumers through enhanced disclosures and limits on crypto asset lending, closes the wash sale loophole and codifies the criteria to determine which crypto assets are securities or commodities." Senate Banking Committee Chairman Tim Scott (R-SC) last week said he plans to release crypto market structure legislation, in collaboration with Lummis, Gillibrand and others, before the August recess and that the committee will mark up the bill by September 30.

On the House floor, Politico said the failure of the rule for consideration of cryptocurrency bills "was the product of a House Freedom Caucus rebellion against the Senate-passed stablecoin bill, which would mark the first major crypto regulatory overhaul ever adopted by Congress." The vote failed 196-223, with 13 Republicans opposing the rule for consideration of the Senate's GENIUS Act stablecoin bill (S. 1582), a DoD appropriations bill, same-day consideration for a Senate-passed rescissions package, and:

• Another cryptocurrency bill, the Digital Asset Market Clarity Act (H.R. 3633), to provide for a system of regulation of the offer and sale of digital commodities by the Securities and Exchange Commission and the Commodity Futures Trading Commission; and
• A bill (H.R. 1919) prohibiting the Federal Reserve banks from issuing a central bank digital currency (CBDC).

President Trump announced on social media Tuesday night that the issue was being resolved: "I am in the Oval Office with 11 of the 12 Congressmen/women necessary to pass the GENIUS Act and, after a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule." He had previously called on all Republicans to vote in favor of the bill.

Rescissions package — With an assist from Vice President JD Vance, the Senate late July 15 voted 51-50 to begin consideration of a House-passed package of budget rescissions (H.R. 4), with Senators Susan Collins (ME), Lisa Murkowski (AK) and Mitch McConnell (KY) voting with Democrats. The package would claw back $9 billion in approved spending on programs such as the U.S. Agency for International Development (USAID), the World Health Organization, the United Nations Children's Fund (UNICEF) and the public broadcasting networks PBS and NPR. The rescissions bill must be approved within 45 days of the President's proposal under the Impoundment Control Act, which provides an expedited process and simple-majority threshold for passage. A vote-a-rama in relation to the bill is set to get underway this afternoon.

Health care — Politico Playbook reported on polling suggesting that acting to extend premium tax credits could improve Republican prospects in the midterm elections, with more favorable projections for the party on a generic ballot if they back an extension than if they let the credits expire. "This tax credit is a central part of the Affordable Care Act, which congressional Republicans have flirted with repealing and replacing for more than a decade now," the report said.

Punchbowl News reported this morning: "Republicans just slashed hundreds of billions of dollars in Medicaid funding, which is already a focus of Democrats' midterm messaging. The Obamacare subsidies are mainly a priority for Democrats. But some Republicans are now starting to back an extension, wary of allowing more Americans to wind up uninsured in what may be a tough election landscape for the party."

On Monday (July 14), the Centers for Medicare & Medicaid Services (CMS) issued their Calendar Year (CY) 2026 Medicare Physician Fee Schedule (MPFS) Proposed Rule, which includes updates to Medicare Part B payments and policies, the Medicare Shared Savings Program (MSSP), the Inflation Reduction Act (IRA) rebate models, and more.

Trade — On July 15, the United States Trade Representative initiated an investigation of Brazil under Section 301 of the Trade Act of 1974. According to a press release, "The investigation will seek to determine whether acts, policies, and practices of the Government of Brazil related to digital trade and electronic payment services; unfair, preferential tariffs; anti-corruption interference; intellectual property protection; ethanol market access; and illegal deforestation are unreasonable or discriminatory and burden or restrict U.S. commerce."

Additional EY Alerts available related to the "One Big, Beautiful Bill Act" (Public Law No. 119-21) include:

• "Final reconciliation legislation modifies some IRA energy credits, repeals others," available here.
• "Several changes to compensation and benefits provisions included in final budget reconciliation legislation for FY 2025," available here.

Friday, July 18 at 12:00 p.m. ET is the EY Webcast, "Tax in a time of transition: legislative, economic, regulatory and IRS developments."