Insights from Washington: Reconciliation Package Update
The House Ways & Means Committee approved its Build Back Better Act tax increase package September 15 after close to 40 hours of debate and mark-up, during which many amendments were proposed, but none were adopted. In the end, the original proposal was largely unchanged. The Ways & Means bill is expected to be combined by the Budget Committee with reconciliation pieces from other committees in the coming days before the complete “spend and tax” bill is brought to the House floor for consideration.
It is anticipated that the size of the bill ultimately brought forward to the House for consideration will need to be scaled back from the $3.5 trillion currently discussed to ensure passage among moderate Democrats. However, what will be cut and what impacts those cuts will have on the proposed tax increases remains to be seen. President Biden delivered a speech on September 16 pushing to prevent congressional Democrats from scaling back his tax proposals as the work continues.
There is a self-imposed deadline of September 27 for a vote on a separate infrastructure bill, by which time progressives in the House want action on this reconciliation bill as a condition of their infrastructure vote. It is widely expected that the reconciliation bill will not be ready for consideration by September 27, and it isn’t clear how that may impact the infrastructure bill’s prospects. As a reminder, the infrastructure bill included some tax off-sets, such as taxation on certain cryptocurrency transactions and early termination of the employee retention credit.
In addition to all the activity surrounding the reconciliation bill, the House and Senate are facing the expiration of government funding on September 30 and the need to address the debt limit. House Majority Leader Steny Hoyer announced the House will take up a continuing resolution to keep the government funded through December.
We expect further information to become available throughout the week and will update you with where things stand in next week’s edition. If you have any questions, please contact us.