The House September 1 approved on a 370-48 vote the Senate-passed 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 and also extend highway funding through that date. The African Growth and Opportunity Act (AGOA) and Haiti Economic Lift Program trade programs are extended through December 31, 2028. Given the Senate's passage of the CR before the August recess, the House vote sends the bill to the President and clears the items considered must-pass prior to the midterm elections.

The Senate is scheduled to remain out of session until September 14. The House CR vote raised the question of what else the chamber, which is slated to be in recess next week for the Labor Day holiday, might undertake prior to the elections, especially given divisions among House Republicans that continued this week over elements of the government funding package. The majority's margins continue to be tight as a rule for consideration of other bills this week was approved by the House only with the votes of two moderate Democrats, Reps. Jared Golden (ME) and Marie Gluesenkamp Perez (WA), after a handful of Republicans voted against the rule. While some reports speculated that House Republicans could cut the pre-election session short, "Republicans are now saying they need to stay in town to get their remaining legislative work done, like the annual defense policy bill," Semafor reported this morning.

Looking beyond the elections, House Speaker Mike Johnson (R-LA) said Tuesday that a five-year surface transportation reauthorization bill will likely be a lame-duck issue, Politico reported. "The House Ways and Means Committee's plans are still uncertain. A batch of contentious policy fights remain unresolved, too, including a debate over rail safety language pushed by the White House," the story said.

The legislative vehicle for the Senate CR was the House-passed AGOA Extension Act (H.R. 6500). Ways and Means Committee Chairman Jason Smith (R-MO) said during floor debate on the CR, "For over two decades, the African Growth and Opportunity Act has been the foundation of America's trade relationship with the nations of sub-Saharan Africa. AGOA promotes greater economic stability and opportunity across Africa while advancing America's strategic and national security interests — including access to critical minerals and more secure supply chains … "

Smith continued, "This bill also reauthorizes the Haitian Hemispheric Opportunity through Partnership Encouragement Act and the Haiti Economic Lift Program Act — known as HOPE and HELP. These programs provide trade preferences for textile and apparel products from Haiti and encourage greater stability in a nation less than 600 miles away from the Florida coast that has long suffered political and economic upheaval. Greater stability in Haiti means fewer regional security concerns for the United States."

Tax — In an August 31 social media post, President Trump spoke in favor of "Federal Tax Incentives in order to Make our Movie and Television Production Business GREAT AGAIN, perhaps GREATER THAN EVER BEFORE! The amount of money spent on Tax Incentives will be made up tenfold by the money pouring into the Treasury's coffers. Meetings are being set up with the Leaders of both Parties in order to get this done. It should be Bipartisan … "

He subsequently posted: "Great bipartisan response and support in Congress for the Motion Picture, Television, and Entertainment Revitalization Act."

The new push for tax incentives was greeted enthusiastically in Congress. Rep. Laura Friedman (CA), who represents Hollywood in Congress, issued a statement saying, "I agree that our tax incentive legislation needs to pass - and to pass quickly. For more than a year I've been sitting down with Jon Voight, Congressional colleagues, the unions, studios, and producers to build the case for a national film and television tax credit. There's no reason Canada, the UK, or Australia should be taking our jobs. We still have the best crews on the planet. It's time we made it possible for them to stay where they belong: in America."

A Politico story, "Congress warms to Trump's Hollywood tax credit effort," said, "The film and TV production incentive that is being discussed would include a 20 percent credit for labor both in front of and behind the camera … . It could also include a mechanism requiring that the vast majority of the work would go to U.S. personnel … "

One proposal that has garnered attention is the Creative Relief and Expensing for Artistic Entertainment (CREATE) Act (H.R. 4840, S. 2530), to extend the IRC Section 181 expensing rules for film, television, and theater productions through 2030, sponsored by Ways and Means members Judy Chu (D-CA), Nicole Malliotakis (R-NY) and Senate Finance Committee members Raphael Warnock (D-GA) and Marsha Blackburn (R-TN). Tax Notes reported that the bill could be a starting point for the legislative effort and that Ways and Means Chairman Jason Smith has already been encouraging members to act on the issue. "Far too much of the tax of the film production is going overseas, and we should not be losing it," Rep. Chu said in the report.

An August 31 New York Times story, "Trump Renews Push for Federal Film Tax Credit," said, "Economists who are critical of giving taxpayer money to Hollywood studios say that there is little financial return in doing so and that governments are in a race to the bottom." The story also said, "Technically speaking, most movies shown in American cinemas are produced in the United States, where scripts are written, preproduction planning handled, principal actors cast and footage edited. But Hollywood has increasingly turned to foreign locales for filming because, as with traditional manufacturing, it is often considerably cheaper." Voight and others had previously discussed plans to help increase domestic film production with President Trump.

A Bloomberg Government report, "Trump Floats Hollywood Tax Credits for US Films and Television," said the President "last year floated a 100% tariff on foreign-produced films, but that idea met resistance from some in Hollywood, who countered with plans for expanded tax subsidies instead."

Trade — Today (September 2) at 10 a.m. is the House Ways and Means Committee hearing, "Strategic Partnerships to Secure Critical Resources and Supply Chains." An advisory said the hearing will have a particular focus on partnerships in Central Asia and Africa.

The United States Trade Representative (USTR) is working on a plurilateral critical minerals agreement.

Additionally, U.S. Trade Representative Jamieson Greer is scheduled to attend the Republican Study Committee's lunch today (Wednesday), with Canada tariffs the main topic of discussion, Bloomberg reported.

Health care — On August 31, the White House announced new "Most Favored Nation" (MFN) agreements with nine mid-sized pharmaceutical manufacturers that aim to more closely align U.S. drug prices with those offered in other developed nations. The agreements also include commitments from several of the companies to donate active pharmaceutical ingredients (APIs) to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR). The White House said the agreements are intended to address what it views as an imbalance in pharmaceutical pricing between the United States and other countries. A WCEY Healthcare Alert has details.

Elections — Both Senator Ed Markey (D-MA) and House Ways and Means Ranking Member Richard Neal (D-MA) won their Massachusetts primaries on September 1. Next week, September 8, is the New Hampshire primary, with Rep. Chris Pappas (D-NH) leading on the Democratic side for the open Senate seat. The winner is likely to face former Senator John Sununu (R-NH).