Congress is sending mixed signals about how the two parties may be able to work together to keep the government funded when members return from the August recess with a government funding deadline on September 30 right around the corner and perhaps act on bipartisan priorities in the latter part of the year. The House is ending its workweek early and leaving for the recess today (Wednesday, July 23), due to disputes in the Rules Committee. The Senate, meanwhile, voted 91-7 in favor of a procedural motion related to consideration of a Military Construction-Veterans Affairs appropriations bill on Tuesday, in a step that advances the spending process. (Agriculture and Legislative Branch bills may be added on.)

Asked yesterday whether Congress is heading for a continuing resolution of government funding beyond September 30 if the requisite votes can't yet be gained on each of the dozen annual appropriations bills, Senate Majority Leader John Thune (R-SD) said, "I hope we can get 60 votes, yes. It's not easy around here getting 60 votes on anything. But we've said before that if there's anything in the Senate that ought to be bipartisan, it's the appropriations process and getting back to regular order on that. So, we'll see where the votes are. At this point, I'm hesitant to predict that."

The House was previously scheduled to leave for the August recess this week. "Members are advised that votes are no longer expected in the House on Thursday, July 24," Majority Whip Tom Emmer (R-MN) announced. "Last votes for the week are now expected at approximately 3:30 p.m. on Wednesday, July 23." The Senate is slated to be in until August 1. President Trump is pressuring the Senate to stay in longer to approve nominations. Punchbowl News reported there are currently 136 nominations awaiting confirmation and Leader Thune as saying, "I think people are accustomed to going back … This is the time of year when they go back and interact with their constituents. Delivering the message about our accomplishments is something that our members are anxious to get out there and do."

Other priorities this year could move in another Republican-only reconciliation bill, or perhaps a bipartisan package that could be appended to some future government funding measure. Since enactment of the "One Big, Beautiful Bill Act" (Public Law No. 119-21), there has been speculation about a potential follow-on bill addressing outstanding tax and health issues, Medicaid and other changes cut out of the OBBBA to meet reconciliation rules, OBBBA technical corrections, tax extenders like extension of the Work Opportunity Tax Credit (WOTC), and possible retirement items.

In health care, lawmakers are beginning to discuss how to address a list of health care extenders set to expire at the end of the fiscal year on September 30, including community Health Center funding, the National Health Services Corps, Medicare telehealth flexibilities, several hospital programs including funding for Medicare Dependent Hospitals, and more. They also must decide whether to allow the Affordable Care Act's enhanced Premium Tax Credits to expire at the end of the year. The tax credits reduced premiums for individuals above 100% of the federal poverty level who purchase coverage on the exchange marketplaces.

A story in the July 22 Wall Street Journal focused on the OBBBA provision for a $1,700 tax credit for contributions to scholarship granting organizations, which would allow a taxpayer to "get that full amount back via a reduction of the same amount in their income taxes, instead of a regular tax deduction for the donation … The SGO would then issue stipends to families for private-school tuition, among other permitted educational expenses." The story said: "Now comes a protracted debate at the state level. Progressives and public-school groups object to funding private schools and say the new program will hurt public education. Supporters say the money will give families options outside of their neighborhood school."

President Trump continues to put forward tax policy ideas. Asked about consideration of no tax on home sales capital gains — in the wake of enactment of no tax on tips and overtime — the President said July 22, "We're thinking about that, but we'd also unleash [the market] just by lowering the interest rates. If the Fed would lower the rates, we wouldn't even have to do that. But we are thinking about no tax on capital gains on houses … " Currently, an individual taxpayer may exclude from gross income up to $250,000 ($500,000 joint) of gain realized on the sale or exchange of a principal residence.

Global tax — Rep. Ron Estes (R-KS) said at an American Enterprise Institute international tax event on Monday (July 21) that Congress will keep monitoring global tax issues after the June 28 G7 agreement to pull Section 899 out of the OBBBA with the expectation G7 and other countries would pull back on some Pillar 2 language. More also needs to be done on digital services taxes (DSTs), he said.

Estes said policymakers need to "trust but verify" that other nations are complying. "We took the first step to pull out the 899 and now we've got to continue the process, follow through with the G7 and OECD countries … " he said. "And continue to work on the DST issue. Because that wasn't resolved and that wasn't as much a part of the agreement as the Pillar 2 piece."

Nominations — The Senate Finance Committee July 22 favorably reported the nominations of Joseph Barloon to be a Deputy United States Trade Representative (Geneva Office) and Brian Morrissey to be General Counsel for the Department of the Treasury, both 14-13, along party lines.

Bill intros — Bills introduced on July 21 include S. 2365/H.R. 4548, by Senate Finance Committee members James Lankford (R-OK) and Catherine Cortez Masto (D-NV) and House Ways and Means Committee members Vern Buchanan (R-FL), Jimmy Panetta (D-CA), Blake Moore (R-UT), and Brad Schneider (D-IL), to make the credit for small employer pension plan startup costs and the retirement auto-enrollment credit available to tax-exempt eligible small employers. According to a release, the "bill provides up to $5,000 per year in tax credits to help nonprofits launch retirement plans, plus an additional $500 annually for those that adopt automatic enrollment" and "the credits can be applied directly to their payroll tax liability."