A continuing resolution (CR, H.R. 6500) that would fund the government beyond the end of the current fiscal year on September 30 and through December 11 may be among the last remaining measures the Senate can address in the short time the chamber is scheduled to be in session prior to the August recess, in addition to nominations. Work on other issues became increasingly complicated as time grew short. Even that CR vote has been complicated by Senators who insist on an amendment striking the bill's delay on new federal agriculture-related controls under last year's appropriations bill.

There are votes scheduled for today in relation to the Russia sanctions bill, nominations, and the CR, but the chamber's endgame for clearing pending business before members depart isn't yet clear. On Fox News August 6, Senate Majority Leader John Thune (R-SD) said of the Senate agenda generally, "I would kind of stack these things, funding the government, the Blanche nomination, the 74 nominations, other nominations we're trying to get through here, Russia sanctions, the [Name Image Likeness college sports bill], [crypto] market structure. There are a lot of things that are sort of stacked up here."

The Senate CR would also extend the highway bill through December 11, along with health policy extenders; and extend the African Growth and Opportunity Act (AGOA) and Haiti Economic Lift Program trade programs through December 31, 2028, with customs user fees to cover the cost. The House, which passed a different version of a CR, would need to decide whether to accept a Senate-passed bill or compel further negotiations.

The Senate on August 5 approved the nomination of Erica Schwartz to be Director of the Centers for Disease Control and Prevention by a 51-44 vote. A Senate vote on Todd Blanche's nomination as attorney general has not been scheduled. Republicans Susan Collins (R-ME) and Lisa Murkowski (R-AK) have said they will vote against the nomination on the floor, and there is attention on how Bill Cassidy (R-LA) will vote.

Reconciliation — There hasn't yet been sufficient progress to allow the Senate to act before the recess on a FY2027 budget resolution that would put into motion Republicans' Reconciliation 3.0 effort, potentially involving many more committees than the House version. The House resolution authorized a $95 billion GOP-only bill just for the SAVE America Act voter ID and citizenship provisions, defense funding and farm aid, without revenue offsets. A separate voter ID proposal could be voted on in the Senate prior to adjourning, to appease Senators who insist the issue be addressed again before the recess. The Senate spent two weeks in March debating the SAVE America Act before ultimately failing to advance the bill.

On August 6, Leader Thune repeated that the chamber had voted on the SAVE Act multiple times without any Democratic support, and "we will try and set up a way to get more votes on that to put them on the record again." He said, "when it comes to this issue … that's why it's so important that we elect more Republicans to the Senate in November."

It has been reported that some Republican Senators — Cassidy, Murkowski and Collins among them — have concerns about the House plan for reconciliation. Asked on Fox Business August 6 whether he is a "no" without revenue offsets, Senator Cassidy — a Finance member and HELP Committee Chair — said: "No, without paying for it. You're seeing mortgages back up to like 6.8%. We cannot continue to spend money we don't have and expect no consequences. So, the average person can't afford a home because mortgage rates are so high, because the government is borrowing so much money."

He continued, "But I will offer offsets if what we're voting on is so important. We should be able to pay for it, and I will offer things that will pay for it."

Tax - Senate Finance Committee Ranking Member Ron Wyden (D-OR) August 6 unveiled a draft proposal to change the tax treatment of data centers that he said are being built to advance new artificial intelligence (AI) tools. The white paper focuses on two sources of potential revenue:

1. Removal of the existing investment incentives in the tax code as they apply to data centers, that are unnecessary for the massive data center buildout going on throughout the country; and
2. Creation of a Data Center Public Investment excise tax to provide a consistent revenue stream.

Wyden's white paper said Democratic staff is "seeking comment on use of the revenue from this excise tax. It is the view of the Ranking Member that a priority should be to directly aid those adversely affected … "

Chairman Mike Crapo (R-ID) and Ranking Member Wyden August 5 reaffirmed their bipartisan commitment to extending the Advanced Manufacturing Investment Credit (CHIPS ITC) for domestic semiconductor manufacturing, which will not apply to property the construction of which begins after December 31, 2026.

Social Security — The August 5 Senate Finance Committee hearing on "Exploring Process Approaches for Addressing Social Security Solvency" focused on the potential for a commission to examine proposals for shoring up the program, which trustees now estimate can only pay 100% of scheduled benefits until Q4 of 2032, threatening benefit cuts of up to 22%. Chairman Crapo, who was a member of the 2010 Bowles-Simpson commission that developed a bipartisan solvency plan that wasn't enacted, said the work nonetheless informed subsequent Social Security solvency discussions. He said the so-called "Greenspan Commission" of the 1980s "demonstrated the value of creating a forum where policymakers could work through difficult issues and build consensus on a bipartisan basis." Witnesses Marc Goldwein and Chuck Blahous, who both staffed past commissions, spoke in favor of the format.

Some members and groups strongly opposed a commission. Ranking Member Wyden opposed what he said would be "an unaccountable 'commission' that will rubber-stamp benefit cuts like increasing the retirement age." He said he wants the Finance Committee to do the work of fixing the program's problems. The sentiment was echoed by Nancy LeaMond of AARP. Senator Cassidy — who sponsors the Protecting Retirement Opportunities and Maintaining Income Security for Everyone (PROMISE) Act (S. 4979), a bipartisan bill that requires Congress to present options to tax-writing committees to be voted on under a schedule and sets other parameters — asserted that a commission-type effort would be bipartisan, ideally would involve the House, and shouldn't be portrayed as partisan.

Committee members Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) have separate proposals to lift the Social Security payroll tax cap of $184,500 and advocated for that approach. Witnesses said that should at least be examined or would probably be part of a bipartisan solution. Echoing a point made during a separate June subpanel hearing, Blahous said the program's shortfall can no longer "realistically be fixed solely with additional revenues, solely by slowing benefit growth, or solely by adjusting eligibility ages."

International tax — An EY Alert, "Proposed regulations address the IRC Section 898(c) transition rule and the IRC Section 960(d)(4) foreign tax credit disallowance rule," has been posted here.

This Alert won't be published when Congress is gone for the August recess, but other WCEY Alerts will be issued as events warrant.