The House continued its work this week even after clearing the continuing resolution (CR) to extend government funding beyond the midterm elections, the one must-do item between now and then. The chamber is scheduled to return after Labor Day, on September 14, when the Senate is also back in for the first time since early August. However, Republican leaders announced that the House will be out after that, giving back the last two weeks in September — votes are not expected during the weeks of September 21 and September 28. With prior plans to be gone for most of October, the chamber isn't planning to be in session after September 17 through the elections. A post-election lame-duck session is currently scheduled to begin November 9.

President Trump September 2 signed the CR (H.R. 6500) to extend government funding and surface transportation and veterans' programs through December 11. Ways and Means Committee Republicans continued to highlight the extension of The African Growth and Opportunity Act (AGOA) and Haiti Economic Lift Program trade programs through December 31, 2028.

There has been attention on how the House Ways and Means Committee may approach its portion of the highway bill. Chairman Jason Smith (R-MO) has been quoted as saying the highway bill is one topic under consideration by the Committee, without providing details, though press reports suggest it is unlikely the panel will mark up before the pre-election recess. The tax-writing committees — Ways and Means and the Senate Finance Committee — produce a tax title providing the revenue portion of the surface transportation reauthorization, which is typically on a five-year schedule though there are sometimes temporary patches. The 2021 Infrastructure Investment and Jobs Act (IIJA) (P. L. 117-58, "Bipartisan Infrastructure Law") last provided $350 billion for Federal highway programs over five years (FY 2022 through 2026).

Ways and Means hearing — The September 2 Ways and Means hearing, "Strategic Partnerships to Secure Critical Resources and Supply Chains," focused on how to protect United States industries from critical mineral supply chain challenges. Some members suggested that tax incentives could play a role. Rep. Steven Horsford (D-NV), whose state holds a significant amount of critical minerals, said "the safest and most secure supply chain is" on US soil, but that requires additional permitting and financing to build mining, processing, and manufacturing capacity facilities. "I plan to introduce legislation to ensure that we are using the tax code to spur these industries right here in America," he said.

The IRC Section 45X advanced manufacturing production tax credit subsidizes the production of critical minerals along with various energy components. The One Big Beautiful Bill Act (OBBBA, P.L. 119-21) scheduled tax credits for critical minerals to gradually phase out from 2031 to 2034. (See Congressional Research Service, here.) Ways and Means Committee member Rep. Blake Moore (R-UT), who sponsors the Critical Mineral and Extraction Tax Parity Act (H.R. 8780) to expand and improve the IRC Section 45X credit, asked about the effect of a tax bill "designed to unlock investment and accelerate project development in the mining industry."

Witness Gracelin Baskaran of CSIS called for extending IRC Section 45X and said expanding the credit would be most welcome. In response to questioning from Rep. Aaron Bean (R-FL), she said, "2031, 2032, 2033 for the phase out is actually very soon, and it doesn't give investors a long-term signal that they need. So, I think taking what we have and just extending the longevity of it will be really critical."

Members from both parties noted the role of critical minerals in health care. Rep. Brad Schneider (D-IL) said critical minerals are essential inputs for a wide range of medical technologies, and he expressed concern for how the health care industry can maintain reliable access to such minerals during supply disruptions and constraints. Chairman Jason Smith said critical "minerals are the building blocks of nearly everything that keeps America moving: the alloys in our shipyards and steel plants, the chips in our phones and our fighter jets, the magnets in precision-guided bombs and lifesaving MRI machines, and the fuel in our nuclear reactors and our nuclear arsenal."

The full WCEY Alert, "Ways & Means Committee holds critical resources hearing," is available here.

Tax — On another issue on which Ways and Means members are introducing bills reflecting concerns brought to light in the hearing setting, Reps. Terri Sewell (D-AL) and Danny K. Davis (D-IL) September 2 introduced a bill (H.R. 10236) to require income tax withholding at the source for name, image, and likeness (NIL) payments to independent contractors who are student athletes. NIL tax issues were a main topic of discussion during the June 30 House Ways and Means Committee hearing on tax policy in the sports industry, alongside the issues of tax-exempt stadium bond financing and executive compensation. Chairman Smith said during the hearing, "college athletes are facing a confusing maze of potential tax liabilities brought on by the explosion in the use of" NIL rights. Witness Sam Acho, a former NFL linebacker for the Arizona Cardinals, called for mandatory NIL withholding that goes into a special retirement account for collegiate athletes, as well as mandatory financial education for student-athletes.

A story in the September 3 Wall Street Journal, "Superrich Find an Alternative Tax-Free Way for Investing," focused on private-placement life insurance (PPLI), "a customizable insurance contract that allows unlimited investments to grow tax-free." It said, "The policies have surged in popularity among wealthy individuals, who use them to invest in alternative assets such as hedge funds, private credit and private real estate."

As the story noted, Senate Finance Committee Ranking Member Ron Wyden (D-OR) has taken aim at the practice. The Protecting Proper Life Insurance from Abuse Act (S. 4279), originally proposed as a discussion draft in December 2024, is intended to protect the preferential tax treatment of traditional life insurance by separating PPLI policies and deeming them Private Placement Contracts.

IRS - President Trump on June 23 sent to the Senate the nomination of James Gadwood, a tax controversy lawyer, to be IRS Chief Counsel. A Senate Finance Committee nomination hearing is expected to be scheduled for September 15.

New this morning are final regulations regarding the deduction for certain taxpayers for an amount up to $10,000 of qualified passenger vehicle loan interest.

The Treasury Department and IRS proposed regulations (REG-119986-25) that would amend existing regulations under IRC Section 501(c)(3) to include rules on racial nondiscrimination by private schools. The proposed regulations would clarify that a private school would not be an organization exempt from federal income tax if it discriminates based on race, color, or national or ethnic origin in administering its educational, admissions, scholarship, athletic, or other policies.

Elections — It was widely reported that the Missouri Supreme Court suspended a state redistricting map that was slated to give Republicans control of seven of eight congressional districts compared with the six they hold now. "Voters will ultimately decide the fate of the new lines in November. But in the meantime, it cannot be in place for the midterms, meaning Rep. Emanuel Cleaver's original Kansas City-based district will likely stay in Democrats' hands this fall," Politico reported last night. Republicans are vowing to appeal, however. As the New York Times reported, "While the ruling at least temporarily thwarted Republicans' efforts to pick up a House seat in the Kansas City area, it also left urgent, unanswered questions about how to hold a general election under a map different from what was used in the primaries."

There has been significant attention on Inside Elections moving the New Hampshire Senate race to a "toss-up" rating given polls showing former Senator John Sununu (R-NH) leading Rep. Chris Pappas (D-NH) in the race to succeed retiring Senator Jeanne Shaheen (D-NH). If Democrats hold all current seats, they will need four GOP pick-ups to win control of the Senate, though that number increases if they lose any currently Democratic-held seats. Newsweek last night reported Sununu leading Pappas by a single point in a new poll, in what is likely to be the general election match-up following the September 8 New Hampshire primary.

What to Expect in Washington won't be published next week while Congress is away.