The House Ways and Means Committee is marking up a package of health, tax administration and Social Security bills today (September 17). The tax bills are the Tax Court Improvement Act (H.R. 5349) by Committee members Nathaniel Moran (R-TX) and Terri Sewell (D-AL), to expand the judicial review process; and the Fair and Accountable IRS Reviews Act (H.R. 5346), by Rep. Glenn Grothman (R-WI), to require that IRS proposed penalties be reviewed and approved by a supervisor. The latter bill has no cosponsors.

The bipartisan health bills include the Hospital Inpatient Services Modernization Act (H.R. 4313) and Health Care Efficiency Through Flexibility Act (H.R. 5347). The Social Security bills address issues including identity theft. The plan for enacting the bills isn't immediately clear. Ways and Means Chairman Jason Smith (R-MO) has been reported as wanting to move a bipartisan tax/health/trade bill by the end of the year.

The bipartisan cooperation needed to advance a bill combining outstanding items later this year, and the legislative vehicle for such a package, will be affected by how the government funding debate plays out. House Republicans September 16 released a continuing resolution (CR) to fund the government until November 21 that is expected to get a House vote by the end of the week. The CR would also extend health extenders, including on telehealth, and some other provisions until that date. Congress is out next week, and Senate Majority Leader John Thune (R-SD) wants the chamber to vote before then. After the break, lawmakers would have only September 29 and 30 to act to prevent a government shutdown if a bill is not agreed to this week.

President Trump on September 16 called for a "clean CR," free of other provisions like the main ask of Democrats for the bill — and supported by some Republicans — which is an extension of enhanced Affordable Care Act (ACA) premium tax credits that expire at the end of 2025. In addition to the President, Leader Thune and Senate Appropriations Chair Susan Collins (R-ME) don't want to consider the premium tax credits issue in the context of the CR. Democrats said they opposed the CR as written, saying Republicans had not consulted them while drafting it, and are preparing an alternative version that includes an extension of enhanced premium tax credits. The apparent standoff was seen as increasing chances of a government shutdown.

Democrats are under pressure to extract policy concessions that reflect opposition to Republican and Trump policies in exchange for their votes on the CR, especially given the criticism Senate Democratic Leader Chuck Schumer (D-NY) faced for supporting a previous CR in March without taking a tougher stand on the Administration's actions. Democratic support is needed because government funding bills need 60 votes in the Senate.

While there is some conventional wisdom that the party that initiates a government shutdown shoulders the blame, Bloomberg reported September 16 that at least one Appropriator, Rep. Mike Simpson (R-ID), a senior member of the Appropriations Committee, has warned that Republicans will face some blame and there is some merit to Democrats' wariness to cooperate on a funding bill. Democrats' prior reluctance to reach a spending deal with Republicans was rooted in the July rescissions package and August "pocket rescission" of $5 billion in foreign aid, which they said demonstrate the Administration's willingness to undo agreements reached in Congress. That argument has been overshadowed by the premium tax credit issue, however.

Leader Thune suggested after the weekly party lunches on Tuesday that there may be some waste, fraud and abuse savings related to the credits that could be tightened to make a deal more palatable to Republicans. "I think there are things that we can do to make the program more efficient and ensure that the American people who benefit from it continue to benefit from it … " he said. "And so now the expiration date is coming at the end of the year. But if we have a clean CR, [that] gives us some time to do appropriation bills, also allow some time to take a look at and see what the options are for addressing that issue as well."

Trade — A rule for consideration of Washington DC-related bills (H. Res. 707) that was passed by the House on a party-line 213-211 vote September 16 extends through March 31, 2026, a prohibition on congressional challenges to President Trump's tariffs. Specifically, the rule extends language addressing the counting of calendar days under the National Emergencies Act (NEA) with respect to a tariff-related declared emergency. The language was originally passed in H. Res. 211 on March 11, at a time when Democrats were seeking a vote to challenge the tariffs under the NEA. Some Republicans initially voted against the rule September 16 because of the provision. The Wall Street Journal reported Rep. Don Bacon (R-NE) as saying the prohibition on challenging tariffs may be shortened and that Ways and Means Trade Subcommittee Adrian Smith (R-NE) may head a working group.

On September 16, the Office of the United States Trade Representative (USTR) officially initiated the public process for the first six-year review of the United States-Mexico-Canada Agreement (USMCA). This public process provides a critical opportunity for stakeholders across industries to provide input on the operation, effectiveness and future direction of the USMCA, which governs nearly $1.3 trillion in annual trade among the three North American nations. An EY Alert has details.

A key feature of the USMCA is the mandatory review mechanism established under Article 34.7, requiring member countries to jointly review the operation and performance of the agreement every six years. The first review will take place on July 1, 2026. The U.S., Canada, and Mexico must submit recommendations for the Joint Review no later than June 1, 2026. The public comment period opens on September 17 and closes on November 1. In addition to providing stakeholders with an opportunity to provide written comments, USTR will also hold a public hearing beginning November 17 at the International Trade Commission in Washington, D.C.

Federal Reserve — The Fed's Federal Open Market Committee (FOMC) resumes its regular rate-setting meeting today, with President Trump's appointee Stephen Miran — who is taking a temporary leave from his position chairing the White House Council of Economic Advisers — in place on the Fed's Board of Governors, after the Senate confirmed Miran on Monday night. The administration had less luck this week at the U.S. Court of Appeals for the D.C. Circuit, where a panel on Monday night voted 2-1 to uphold a federal judge's ruling that Fed Governor Lisa Cook could remain at the Fed as her case proceeds. An expected last-minute appeal to the U.S. Supreme Court by the Trump administration did not materialize Monday, though White House officials have promised such a move in the coming days, Bloomberg reported. Both Cook and Miran are attending this week's meeting, where the FOMC is expected to lower the Fed Funds rate by a quarter-point or more.

Earnings Reports — President Trump this week criticized the requirement that public companies report their earnings on a quarterly basis, declaring that corporations should only have to report the data every six months, and the Securities and Exchange Commission (SEC) said it was ready to prioritize a rulemaking carrying out the president's wishes. "Subject to SEC Approval, Companies and Corporations should no longer be forced to 'Report' on a quarterly basis (Quarterly Reporting!), but rather to Report on a 'Six (6) Month Basis,' " Trump said on Truth Social. "This will save money, and allow managers to focus on properly running their companies. Did you ever hear the statement that, 'China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis'??? Not good!!!"

The idea has prompted mixed reactions from the markets, with some analysts and executives saying the change in 10-Q filings would save companies time and money while investor advocates worried about a loss of transparency. Investor Warren Buffett and JPMorgan Chase CEO Jamie Dimon have argued for the change since 2018. But in comments to the SEC, Blackrock said, "We believe the potential loss in transparency and timely availability of information to investors would outweigh the potential benefits," Bloomberg reported. Similar sentiments about a loss of accountability were expressed by California pension fund CalPERS. An SEC spokesman told Bloomberg the agency "is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies," meaning the Commission will likely undertake a rulemaking process on 10-Q later this year or next.

Bill introductions - On September 15, Ways and Means members Greg Steube (R-FL) and Mike Thompson (D-CA) introduced H.R. 5366, to codify and extend the rules for personal casualty losses arising from major disasters and the rules for the exclusion from gross income of compensation for losses or damages resulting from certain wildfires. Senator Rick Scott (R-FL) is sponsoring the Senate version. A Steube news release said the Federal Disaster Tax Relief Act will permit victims to claim disaster-related personal casualty losses without having to itemize deductions through 2026.

Retirement — The IRS September 15 issued final regulations addressing catch-up contribution provisions of the SECURE 2.0 Act enacted at the end of 2022, which required that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions.