ON THE SENATE FLOOR: The Senate will continue consideration of nominations.
IN THE HOUSE: The House will take up non-controversial legislation, but the question of the day is whether there will be a vote this week on the bipartisan infrastructure bill that the Senate passed in August. Commonly referred to as the BIF, for Bipartisan Infrastructure Framework, the legislation is technically the Infrastructure Investment and Jobs Act (IIJA), which isn’t as easy to say as BIF. Progressive Democrats have thus far blocked House consideration because of their insistence that a vote on the BIF must be paired with approval of the Build Back Better (BBB) reconciliation bill.
Even though neither chamber will vote on the reconciliation bill this week, Democratic leadership is hoping that an agreement in principle can be reached on reconciliation, providing enough progress that progressives will consent to a vote on the BIF, possibly on Wednesday or Thursday. There is no guarantee that the House will vote this week, but passage of the BIF would send the measure to President Biden for his signature.
RECONCILIATION: Democrats remain optimistic that they can nail down an agreement soon on the reconciliation bill, but intraparty disagreements remain. The White House and Democratic leaders are continuing to negotiate with Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) on the size of the package as well as details of individual provisions.
A recent Washington Post article noted that Sinema’s views on taxes have been known to both Biden and Senate Majority Leader Chuck Schumer since early August. “It was eventually the White House,” according to the Post, “that made it clear to the Senate Finance Committee…that Sinema would not support any increase in the corporate or individual rates.” Sinema’s opposition to an increase in the top corporate rate has led to Senate Finance Chairman Ron Wyden (D-OR) and the Administration pushing for a minimum tax that Finance staff is currently drafting. The Finance version is expected to contain elements of the Administration’s proposal to impose a 15% minimum tax on the book income that corporations report to shareholders rather than taxable income that is reduced by various deductions provided in the tax code.
This is one of several revenue issues where House Ways and Means Chairman Richard Neal (D-MA) and Wyden have differences, with Neal making the case to Sinema and others that an increase in the corporate rate, from 21% to, say, 22% or 23%, would be a better approach than instituting a complicated minimum tax that is being drafted late in the legislative process. In addition to differences over revenue-related proposals, negotiations continue over prescription drug prices, paid leave, expanded Medicare benefits, and the child tax credit, to name just a few of the issues not yet finalized.
As mentioned, the hope for Dem negotiators is to be able to announce a deal in principle this week on BBB. With a corporate rate increase in jeopardy, there’s a lot of attention being paid to a minimum corporate tax to help fund the package.
Here’s what we picked up over the past 48 hours:
- First off, an increase to the corporate rate is not out of the question. The aforementioned effort by Neal is to convince Sinema to accept a higher corporate tax rate, maybe 22-24%, rather than draft a complicated minimum tax.
- Wyden is drafting the minimum tax language. Pelosi and Neal don’t like the minimum book tax and want to kill it. While some insiders believe Pelosi and Neal will prevail over Wyden on including a minimum book tax, there are many variables at play.
- We are likely to know in the next day or two. Pelosi said on the Sunday talk shows that we would see text in the next day or two. However, she also made clear that it is coming from the Senate. Schumer’s office has indicated that text may be finalized today or Wednesday.
The Wyden proposal could be a combination of a corporate AMT and a corporate minimum book tax in which a company would:
- Calculate its regular tax at the 21% rate.
- Calculate an alternative tax that does not allow certain deductions, such as accelerated depreciation, and apply a 15% rate.
- Calculate tax based on book income and apply a 15% rate. It’s unclear what deductions would be allowed, but the Treasury proposal provided for deductions of General Business Credits, including R&D, clean energy and housing tax credits, as well as foreign tax credits.
- After making all three calculations, a company would pay the highest of the three.
COMMITTEE ACTION OF NOTE:
- Tuesday, October 26:
- Senate Banking, Housing, and Urban Affairs Committee Hearing to examine the nominations of Reta Jo Lewis to be President of the Export-Import Bank of the United States, and Elizabeth de Leon Bhargava to be an Assistant Secretary of Housing and Urban Development.
- House Energy and Commerce Subcommittee on Health Hearing: Caring for America: Legislation to Support Patients, Caregivers, and Providers.
- Wednesday, October 27:
- House Appropriations Subcommittee on State, Foreign Operations, and Related Programs Hearing: United States Global COVID-19 Response: Actions Taken & Future Needs.
- House Financial Services Committee Hearing: Bringing Consumer Protection Back: A Semi-Annual Review of the Consumer Financial Protection Bureau.
- The House Committee on Transportation and Infrastructure Markup of various measures including H.R. 4042, Aviation Funding Stability Act of 2021, H.R. __, Stop Sexual Assault and Harassment in Transportation Act (pending introduction), and amendment in the Nature of a Substitute (ANS) to H.R. 1066, Wildfire Recovery Act.
- Senate Homeland Security and Governmental Affairs Subcommittee on Governmental Operations and Border Management Hearing to examine strategies for improving critical energy infrastructure.
- Thursday, October 28:
- House Oversight and Reform Committee Hearing: Fueling the Climate Crisis: Exposing Big Oil’s Disinformation Campaign to Prevent Climate Action.
- Senate Special Committee on Aging Hearing to examine building a stronger retirement system for all Americans, focusing on a financially secure future.
- Senate Banking, Housing, and Urban Affairs Committee Hearing to examine the Consumer Financial Protection Bureau's Semi-Annual Report to Congress.
