Speaker Mike Johnson (R-LA) tried to break a logjam on floor activity through a provision in the rule for consideration of multiple measures — the National Defense Authorization Act (NDAA, H.R. 8800), the State Department appropriations bill (H.R. 8595), the Removing Barriers to Work for Disabled Americans Act (H.R. 8884), and a resolution (H. Res. 1383) commemorating the one-year anniversary of the "One Big Beautiful Bill Act" (OBBBA/OB3) — that would add the text of S. 1383, the SAVE America Act, to the NDAA upon passage of the NDAA on the floor. But enough conservatives opposed the rule to return the chamber to gridlock over the SAVE Act voter ID measure, and the House subsequently adjourned Tuesday for the July Fourth recess.

The rule vote was 198-224, with 14 Republicans joining all 210 Democrats that were voting. Rules for consideration of legislation in the House are up to the majority party to pass, with the minority traditionally voting "no." Rule votes were historically a perfunctory part of the House process, but in recent years they have been blocked by factions of the majority party to express displeasure with leadership.

The Senate has been out all week and is not due to return until July 13. The same is now true of the House.

On Monday, June 29, the House did approve two Ways and Means committee suspension bills — which didn't need a rule — the Recover COVID Unemployment Fraud in Banks Act (H.R. 8873), sponsored by Rep. Beth Van Duyne (R-TX), and the Health Care Efficiency Through Flexibility Act (H.R. 5347), sponsored by Rep. Vern Buchanan (R-FL). A Ways and Means news release said H.R. 5347 "recognizes the benefits Accountable Care Organizations (ACOs) provide to patients in the way of value-based care," but reporting processes required by the Centers for Medicare & Medicaid Services (CMS) are onerous and costly.

Tax administration — The House Ways and Means Committee has scheduled a markup for today (July 1) at 10:30 a.m. of bills including:

• H.R. 9496, the End Tax Penalties on American Hostages Act, by Rep. Claudia Tenney (R-NY), to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully detained or held hostage abroad
• H.R. 9500, the Tax Relief for Fraud Victims Act, by Rep. Max Miller (R-OH), to repeal the limitation on deductions for personal casualty losses and provide increased taxpayer relief for theft losses
• H.R. 9498, the Taxpayer Advocate Participation Act, by Rep. Greg Steube (R-FL), to authorize the National Taxpayer Advocate to appear as amicus curiae in Federal tax cases
• H.R. 9501, the AI Tax Integrity Act of 2026, by Rep. Vern Buchanan (R-FL), to require the Comptroller General to submit a report to the appropriate committees of Congress on the potential of artificial intelligence to assist the Internal Revenue Service in detecting tax fraud
• H.R. 9499, the Protecting Taxpayers from Ghost Preparers Act, by Rep. Nicole Malliotakis (R-NY), to apply tax return preparation penalties to improperly altered returns
• H.R. 7972, the Taxpayer Workforce Modernization Act, by Rep. Dave Schweikert (R-AZ), to establish a fellowship program within the Internal Revenue Service to recruit qualified data scientists to partner with tax law specialists and provide insights and identify emerging and complex issues in tax administration
• H.R. 9504, the Tax-Exempt Hospital Transparency Act, by Rep. Greg Murphy (R-NC), to establish reporting requirements for hospital organizations

Tax — The June 30 House Ways and Means Committee hearing on tax policy in the sports industry included discussion of scheduled changes to IRC Section 162(m) executive compensation rules to extend the $1 million deduction limit for executive compensation at public companies to more employees. Chairman Jason Smith (R-MO) asked whether 162(m) should apply to all sports teams, not just those that are publicly held, with three teams currently subject to the limitation. "Those teams have expressed concern that this provision puts them at an economic disadvantage to the teams they directly compete against, and so the Committee is considering how best to level the playing field," he said. "One approach would be to apply the 162(m) limitation to all sports teams, not just the publicly traded ones."

The Tax Cuts & Jobs Act (TCJA) eliminated the performance-based compensation and commissions exceptions to IRC Section 162(m) and expanded the definition of "covered employee" to include the CFO. The 2021 American Rescue Plan Act (ARPA) included a provision to deny the deduction for compensation over $1 million for the eight highest-paid employees, plus the CEO and CFO, at publicly traded companies, effective beginning in 2027.

As Politico reported, "The law was aimed at corporate chieftains, but at sports organizations the mostly highly paid employees are often athletes. A handful of sports teams are owned by publicly traded companies … "

Trade - The United States, Canada, and Mexico are expected to meet virtually today (July 1) as part of the Joint Review of the U.S.-Mexico-Canada Agreement (USMCA). The parties are not expected to renew the pact for another 16-year term and instead are expected to continue negotiating to address bilateral and trilateral issues. "These discussions are warranted, and the goal needs to be a stronger USMCA; I think there's considerable support for that as well," Ways and Means Trade Subcommittee Chairman Adrian Smith (R-ME) said in Semafor this morning. Punchbowl News reported today that Republican Ways and Means members say they have had constructive discussions with the United States Trade Representative (USTR), but Democrats have been less satisfied with the degree of consultation. "Members on both sides of the aisle said USMCA could be tuned to better address rules of origin concerns and certain agricultural problems some members have, specifically regarding dairy imports in Canada," the report said. Press reports suggested that the Administration may formally announce it is not going to renew the USMCA.

Trump Accounts — Treasury and IRS June 29 issued Revenue Procedure 2026-25, providing a gift tax reporting safe harbor for certain contributions to Trump accounts. If requirements are met, contributions made by individual donors to Trump accounts in a given year will not be subject to gift tax reporting requirements for that year.

Bill introductions - On June 29, Ways and Means member Rep. Darin LaHood (R-IL) introduced the Health Savings for Families Act (H.R. 9518) to allow contributions to a health savings account (HSA) when a spouse has a health flexible spending account (FSA). A news release said, "Under current law, FSAs can be used to reimburse expenses for an individual and their spouses and dependents. This eligibility for FSA benefits disqualifies an otherwise eligible FSA enrollee's spouse from contributing to an HSA, even when each spouse is covered under a separate health plan. The Health Savings for Families Act fixes this flaw … "

On June 30, Rep. Steube introduced a bill (H.R. 9568) to establish name, image, and likeness investment accounts for student-athletes.

Hearings — Today at 10:15 a.m., the House Education and Workforce HELP Subcommittee will hold a hearing on "Direct Contracting: A Prescription for Lower Health Care Costs."

Elections — In the Colorado primary elections June 30, Senator Michael Bennet (D-CO), a Finance Committee member whose Senate seat is not up this cycle, lost a bid to be the Democratic nominee for governor to state Attorney General Phil Weiser. Rep. Diana DeGette (D-CO), a 15-term member of the House and ranking Democrat on the Energy and Commerce Health Subcommittee, lost her primary race to doctoral student Melat Kiros, another example of a traditional Democrat being ousted by a more progressive challenger this primary season.

What to Expect in Washington won't be published until Congress returns on July 13, but other WCEY Alerts will be issued as events warrant.