Message battles, lame duck, and a tax debate

Friday, May 17, 2024

In this week's newsletter: Message battles, lame duck, and a tax debate

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With the House?voting?overwhelmingly this week to reauthorize the FAA, Congress has finished its pre-election “must-do’s” (other than spending legislation in the fall to keep the government running after the October 1 start of fiscal year 2025). All eyes are turning toward Election Day and, on Capitol Hill, both parties will do what they can in the coming weeks to influence the outcome. Behind the scenes, however, lawmakers will lay the groundwork for “must-do” or “wish-to-do” action either during a post-election lame-duck session of Congress or in 2025.

The message battle

With House and Senate control both in play this fall, majority parties in each chamber will try to put the minorities in political peril by forcing floor votes on “message” bills or resolutions. In the House, Republicans see growing Democratic divisions over securing the border and backing Israel in its war with Hamas, and they’re not wasting time trying to exploit them. The House’s?approval?this week of GOP legislation to condemn President Biden’s pause in certain weapons shipments to Israel, and to force him to reverse course, is a?prime example. In the coming weeks, expect Speaker Mike Johnson (R-LA) to bring up GOP resolutions on securing the border, defunding the police, and other highly charged issues. In the Senate, Majority Leader Chuck Schumer (D-NY) says he won’t bring up the Israel-related measure. Instead, he’s expected to bring back the Senate-passed bipartisan border bill that died in the House and to force votes on measures to protect reproductive rights.

Lame duck

With Congress reconvening after the election, this lame duck session could be an active one. It’s a good bet (actually, a sure thing) that lawmakers will have to enact appropriations bills for 2025 or another short-term continuing resolution to replace the CR that they’ll almost certainly enact by October 1. Meanwhile, the House and Senate Agriculture Committees are eyeing the lame duck to finish a new five-year Farm Bill, though it’s not clear that lawmakers of both chambers and parties can?resolve?all their differences over contentious items by then. Other candidates for lame duck action include expiring and hot-button?health provisions,?privacy?legislation,?AI?measures, and the favored items of retiring members who hope to capitalize on their last opportunity to push them into law – such as Sen. Joe Manchin (D-WV) and?permitting reform.

Tax cuts in 2025

With several tax provisions from the 2017 Tax Cuts and Jobs Act and 2022 Inflation Reduction Act expiring at the end of 2025, next year will bring a battle royale over tax policy – no matter who wins the White House and Congress. Republicans are formally preparing for it. House Ways and Means Chairman Jason Smith (R-MO)?established?10 “tax teams” of committee Republicans to study tax provisions for manufacturing, working families, rural America, and several other topics. Senate Finance Committee Ranking Republican Mike Crapo (R-ID)?says?he’s considering something similar. So far, Democrats are sticking with Biden, who vows to push for higher taxes on corporations and wealthy individuals while not raising taxes on anyone making less than $400,000 a year. According to the Congressional Budget Office , extending all expiring individual, business, health, and other tax cuts would cost a whopping?$5 trillion-plus?over 10 years. Americans deserve a tax code that enables businesses to flourish and workers and families to thrive, but policymakers also can’t ignore the staggering cost of extending the tax cuts without sensible offsets. We’ll be working with both parties to balance these priorities, with the goal of achieving fiscally responsible tax reform in 2025.??

Have a nice weekend. We’ll be back in touch next Friday.