House Speaker Mike Johnson (R-LA) confirmed July 23 that Republicans intend to act on another GOP-only reconciliation bill later this year to address items left out of the "One Big, Beautiful Bill Act" (Public Law No. 119-21). In a Bloomberg interview, Speaker Johnson said he hoped to pass a bill "late in the fall" that would address issues cut out of the OBBBA to meet reconciliation rules, without naming specific tax provisions. "There are some priorities that did not make it into 'reconciliation one' that are still priorities for people," Johnson said. "A couple of things that didn't survive the Byrd test, and we're looking at other ways, other angles maybe to try to include that."

House Budget Committee Chairman Jodey Arrington (R-TX) said July 8 that Republicans plan to consider another reconciliation bill in the fall that could tailor Medicaid and other changes to meet reconciliation rules, and this week said that effort will likely include a measure to bar states from using their own funds to provide Medicaid to illegal immigrants, according to the report.

At least a portion of what's considered unfinished business in Washington is potentially bipartisan, including tax extenders like the Work Opportunity Tax Credit (WOTC), retirement provisions, and some health care items. It's unclear if those issues would be addressed in a Republican reconciliation bill; whether such a bill could be followed by a bipartisan package addressing outstanding tax and health issues that both parties support; or whether the one-party approach could sour relations to the point of precluding any later cooperation.

The interaction between potential reconciliation legislation and any bipartisan bill isn't clear, but members' comments suggest both are possible. A story in today's Tax Notes, "Possible Tax Extenders Bill Could Embrace Offsets," reported: "Ways and Means member Kevin Hern, R-Okla., said that if Republicans take a second swing on a reconciliation bill, offsetting its cost will be a top priority. But on a bipartisan bill, the need for pay-fors isn't quite as clear, he said. 'I think in keeping with where we are right now, and paying for the things that we cut, we're going to have to look and see what else we can do,' Hern said."

Lawmakers are discussing how to address 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.

Crypto tax — One new starter with robust bipartisan support that has a chance to be included in a broader package is the taxation of cryptocurrency, which was the subject of a July 16 Ways and Means Oversight hearing. Following his comments from the hearing, Rep. Max Miller (R-OH) has circulated a draft framework for a crypto tax bill that would, without specifying exact details:

• Provide a de minimis reporting exemption to exclude small personal transactions from capital gains reporting
• Modernize wash sale rules to include application for digital assets with clarity
• Offer optional mark-to-market accounting for qualified traders and institutions
• Make staking and mining income changes to clarify when income is realized and how it should be reported
• Update charitable contributions rules for donating appreciated crypto to nonprofits
• Permit digital assets in certain retirement accounts with defined rules

These same issues are addressed in the June 30 bill (S. 2207) introduced by Senator Cynthia Lummis (R-WY) that would set a $300 de minimis threshold and $5,000 yearly total cap, provide that digital asset lending agreements are generally not taxable events, revise the wash sale rules as they pertain to digital assets, provide that mining and staking income is not recognized until sale/disposition of produced assets, and exempt charitable contributions from appraisal requirements.

Congress — The House has already left for the August recess. The Ways and Means Committee is holding two OBBBA-related field hearings today and tomorrow (July 25-26), in Las Vegas, NV, and at the Ronald Reagan Presidential Library in Simi Valley, CA.

The Senate is processing nominations and a three-bill appropriations package: Military Construction-Veterans Affairs, Agriculture, and Legislative Branch. The Senate Appropriations Committee has also approved the Commerce-Justice-Science, Interior-Environment, and Transportation-HUD bills. The House passed the Military Construction-Veterans Affairs bill June 25 and Defense appropriations bill July 18. The House Appropriations Committee has approved the Agriculture, Energy-Water, Homeland Security, Interior-Environment, National Security-Department of State, and Transportation-HUD bills.

Congress will almost certainly need to enact a temporary continuing resolution to extend government funding beyond September 30 — given that the appropriations process is not far along — and how the appropriations process plays out is far from clear.

Democrats are still considering the degree to which the rescissions package cleared by Congress last week and the potential for additional stringent action on spending propelled by the Administration dampens their willingness to cooperate on government funding, given the risk for bipartisan agreements to be rolled back. A July 25 New York Times story said, "A major priority for Democrats is winning assurances from Senate Republicans that they will not again agree to allow the Trump administration to cancel spending after Congress approves the bills. Without some commitment in place, Democrats say it is uncertain whether they can back the spending measures."

Trade — The August 1 deadline the President has set as the end date for suspension of additional country-specific tariff rates on countries with which the US has large trade deficits and trade barriers is bringing about new trade developments. President Trump announced late July 22 that he had reached a deal for 15% tariffs with Japan, and press reports since have said the Administration could be on the cusp of a similar deal with the European Union, which is prepping a package of 30% tariffs on $93 billion in US products if a deal with the US doesn't materialize. Press reports said the Japan deal also includes a pledge for a $550 billion US investment fund. "This is literally the Japanese government giving Donald Trump $550 billion and says, 'go fix whatever you need to fix,'" Commerce Secretary Howard Lutnick said on Fox News yesterday.