Congress returns to session under the same circumstances as when members left for the one-week recess, facing the potential for a government shutdown if funding isn't extended beyond Tuesday, September 30. President Trump has invited congressional leaders to the White House today, after cancelling a prior meeting last week. Democrats want enhanced Affordable Care Act (ACA) premium tax credits that expire at the end of 2025 to be extended in a continuing resolution (CR). Republicans say that issue can wait.

Press reports have indicated that House Republicans may not bring members back this week, leaving the chamber's previously passed bill (H.R. 5371) as the only alternative to a government shutdown, and that Senate Republicans may hold another vote on the plan on Tuesday, September 30, further punctuating the fact that the House bill is the only option.

In a story in the September 27 Wall Street Journal (WSJ), Senate Democratic leader Chuck Schumer (D-NY) suggested that a deal on the enhanced subsidies could end a potential shutdown, and Republicans could be compelled to act once consumers get notices of premium increases ahead of open enrollment in November. Senate Majority Leader John Thune (R-SD) continues to say action on the subsidies is possible in a future spending bill — not the current CR — depending on input from the White House. On NBC's Meet the Press, Leader Thune said of the ACA credits, "the deal is not ready to be done. The government is going to close on Tuesday night at midnight. Let's keep the government open. Let's go to work on that issue. And, yes, I mean, some of the notices are going to start going out. The program wouldn't end until the end of the year."

On Fox News Sunday, House Speaker Mike Johnson (R-LA) tempered expectations for a deal during today's meeting. "The purpose of the meeting is so that the president can assemble the four leaders, the two top leaders in both chambers, to come in and have this discussion. And I talked with him at length yesterday about this, and he's going to tell Chuck Schumer and Hakeem Jeffries to stop playing political games," he said. On CNN State of the Union, the Speaker cited the party position that the CR is not the appropriate context to address the subsidies. "The Obamacare subsidies is a policy debate that has to be determined by the end of the year, December 31, December 30 — not right now, while we're simply trying to keep the government open so we can have all these debates," he said.

Some members have suggested movement towards a vote on the enhanced subsidies may be sufficient to win CR votes from some Democrats. Senator Jeanne Shaheen (D-NH) suggested in a September 25 Semafor report that a promise to vote on extending ACA subsidies later this year could be enough for some members. "There are a number of ways to get this done that should satisfy both sides," said Senator Shaheen, who cosponsors the Health Care Affordability Act (S. 46) to make enhanced subsidies permanent.

Also to be considered in the shutdown debate is the potential, articulated in a memo to agencies from Office of Management and Budget Director Russ Vought, for the Administration to consider Reduction in Force (RIF) notices for employees of federal programs subject to a September 30 funding lapse and not separately funded by the "One Big Beautiful Bill Act," which included new money for immigration enforcement and defense programs.

President Trump has presided over shutdowns before, including a 35-day lapse — the longest ever — over the holiday break of 2018 into 2019, rooted in a congressional dispute over immigration issues. Another significant shutdown occurred in 2013 and lasted 16 days as Republicans, led by Senator Ted Cruz (R-TX), expressed opposition to the ACA.

Crypto tax — The Senate Finance Committee has scheduled a hearing for Wednesday, October 1 (at 10 a.m.), on "Examining the Taxation of Digital Assets," which follows a similar hearing in the House Ways and Means Oversight Subcommittee July 16. One of the Finance witnesses, Jason Somensatto of Coin Center, testified at the prior hearing and called for an exemption from reporting requirements for digital peer-to-peer transactions. Other witnesses include the VP of tax at Coinbase and Annette Nellen, a professor at San José State and chair of the Digital Assets Tax Task Force at the American Institute of CPAs.

The issue has gained increasing member interest given the widely recognized lack of specific crypto tax rules. Two main issues were discussed at the July Ways and Means Oversight hearing:

• Digital assets are treated as property, any transfer or exchange of which can trigger taxable income, and the industry is pushing for a de minimis rule to exempt transactions under a threshold from taxation and reporting requirements because even buying a cup of coffee requires calculation and reporting of gain or loss, and that discourages the use of digital assets as a medium of exchange; and
• Staking, or the validation of transactions and issuing of rewards that currently must be included in income when the taxpayer gains control, which the industry wants changed to be treated like other created property — taxed at the time of sale, not at the time of creation.

Rep. Max Miller's (R-OH) July discussion draft and Senator Cynthia Lummis' (R-WY) June bill (S. 2207) address the same set of crypto tax issues, including a de minimis rule, staking, and wash sales.

Trade — In social media posts late September 25, President Trump announced

• "a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America," which he defined as beginning construction, starting October 1
• "a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st"

An EY Global Trade Alert has details on the announcements and other issues.

The announcements left some issues unclear, and press reports largely focused on which companies would and would not meet the begin construction requirement, with the suggestion that many larger companies could be spared but smaller companies may be subject to the tariffs. "Big drugmakers have been bracing for tariffs since the start of the Trump administration, and have sought to get ahead of new levies by pledging to invest more than $350 billion on manufacturing, research and development and other functions in the U.S. … " the WSJ reported. "However, smaller companies that produce only one or two drugs may be hit harder because they tend to rely on overseas contract manufacturers."

A story in the September 27 Washington Post said the announcement "sparked confusion Friday, as government officials, drug companies and trade groups sought clarity on how the levy would be applied. But the plan delivered one unambiguous mandate: It sent drugmakers scurrying to show that they are building manufacturing capacity in the United States." The story said, "experts noted Trump's post did not make clear whether the tariffs applied to countries that already had established trade deals with the United States or whether exemptions also applied to companies that already had manufacturing factories in the United States."

The social media announcement follows the launch of two new investigations under Section 232 of the Trade Expansion Act of 1962 to determine the impact of certain imports on US national security, including on imports of personal protective equipment (PPE), medical consumables, and medical equipment including devices. Pharmaceuticals are explicitly excluded from this investigation since they are covered by a separate Section 232 investigation. A WCEY Alert has details.