Senate Democrats and the Trump administration January 29 reached a tentative deal to minimize a partial government shutdown stemming from Democratic demands for reforms to Department of Homeland Security (DHS) enforcement procedures as a condition of supporting the DHS appropriations bill. The Senate would vote on five of the remaining House-passed appropriations bills — Defense, Labor-Health and Human Services-Education, Transportation-Housing and Urban Development, Financial Services and General Government, and National Security-State Department — which Democrats support. A two-week extension of Homeland Security funding would be voted on separately.

"Hopefully, both Republicans and Democrats will give a very much needed Bipartisan 'YES' Vote," President Trump said in a social media post. However, plans for the Senate votes to be held last night were thwarted by a hold from Senator Lindsey Graham (R-SC), who said, "This is a bad deal," Bloomberg reported. Punchbowl News reported that Senator Graham's hold is over the Arctic Frost provision, which authorizes payouts to senators whose phone call logs were subpoenaed by a former special counsel.

The bipartisan agreement, if implemented, could limit a partial government shutdown related to DHS funding once the House returns and presumably passes the two-week stopgap Homeland Security measure, with a vote likely to be held on Monday. House Republicans are holding calls this morning regarding consideration of the bill. The two-week measure would set a new deadline of February 13 for DHS funding, with the President's Day recess as a backstop, with lawmakers expected to agree to reforms to be enshrined in the bill in the intervening time.

Reforms enumerated by Democratic leader Chuck Schumer (D-NY) January 29 focused on issues such as ending "indiscriminate patrols," accountability standards commensurate with those applicable to other law enforcement agencies, and the use of body cameras, which the party wants reflected in law, not just assurances. "We're not going to ask for a complete rewrite," Senator Chris Murphy (D-CT) said in the Wall Street Journal. "We're not going to ask for things that are impossible to get done in the next few days."

Tax — Asked during a January 28 Tax Analysts corporate alternative minimum tax (CAMT) webinar about IRC Section 174 R&D changes under the "One Big Beautiful Bill Act" (OBBBA) pushing corporations into the CAMT, Deborah Tarwasokono, attorney-adviser at the Treasury Department, said Treasury is "hoping to issue guidance with respect to this issue." She did not provide any additional details. As has been widely noted, more companies may become subject to the CAMT because of tax benefits in the OBBBA, including making the R&D provision permanent (as IRC Section 174A) and providing the option to elect to retroactively deduct domestic research or experimental expenditures.

Previously, Kevin Salinger, Deputy Assistant Secretary for Tax Policy at Treasury, said January 13 that Treasury and the IRS plan to issue one more notice on the CAMT before issuing a reproposed package of rules at the end of 2026.

On another OBBBA provision, Trump Accounts, President Trump said January 28 during an event at Mellon Auditorium in Washington, "Under this program, the U.S. government will automatically create a tax reinvestment account for every newborn American child, something that nobody really would have even thought of. There were some brilliant people that thought of it for a long time … The size and scale of this wealth will dwarf all government programs ever created to benefit America's youth."

Treasury hosted a full-day summit January 28 to highlight the launch of Trump Accounts, the tax-advantaged savings/investment accounts created by the OBBBA that parents, guardians, employers and others can establish for eligible American children under 18 to help build long-term savings, including a government seed contribution for certain newborns.

"The summit showcased major corporate commitments and philanthropic contributions from America's leading companies, each pledging to match seed funding, broaden employee participation, or develop innovative channels for account growth. This pro-family initiative will help millions of Americans harness the strength of our economy to uplift the next generation," Treasury said in a news release. "Through Trump Accounts, our President is putting the American Dream within reach of every citizen, no matter the circumstances of birth," said Secretary Scott Bessent.

Federal Reserve — President Trump this morning announced his nominee for Federal Reserve chairman, Kevin Warsh. The WSJ previously called it "arguably the most important personnel decision Trump faces for the remainder of his term." Warsh, who served on the Fed's Board of Governors from 2006 to 2011 and has been an adviser to the president on economic policy, reportedly visited the White House on Thursday. President Trump told reporters Thursday night, "A lot of people think that this [nominee] is somebody that could've been there a few years ago." Trump chose Jerome Powell over Warsh to chair the Fed during his first term; Powell's term expires in May. The other three options that Treasury Secretary Scott Bessent had lined up for the position are White House National Economic Council Director Kevin Hassett, executive Rick Rieder and current Fed Governor Christopher Waller.

Warsh, a graduate of Harvard Law School, served in President George W. Bush's White House as executive secretary of the National Economic Council. He was an advocate for free trade for years before embracing the president's tariff policies, the Journal reported, and last year Warsh echoed Trump in calling for the Fed to cut interest rates faster. Sen. Bill Hagerty (R-TN), a member of the Senate Banking Committee, called Warsh "a very clear choice that the markets would accept and appreciate," Bloomberg reported.

The president's nominee will have to confront the fact that Sen. Thom Tillis (R-NC), who is retiring this year, has vowed to vote against moving any Fed nominee out of the Senate Banking Committee until the Justice Department resolves its current investigation into Powell's management of the Fed's headquarters renovation. On a panel with a 13-11 ratio between Republicans and Democrats, Tillis' opposition could bottle up the Fed nominee in committee. Roll Call reported that speaking to reporters on Thursday, Tillis said, "The Fed noms are not going to change until the investigation or potential indictment of chair Powell is completed. So the DOJ has got to decide when to lift those holds. It gets lifted the day that case is adjudicated or withdrawn. That's their choice."