One day before federal government and IRS funding is set to expire, congressional leaders reached a bipartisan, two-year agreement to keep the government and federal agencies in operation. The measure must first pass both the full House and Senate, however, and has already received pushback from several House Republicans and Democrats. Current government funding is set to expire at midnight on February 9.
“I am pleased to announce that our bipartisan, bicameral negotiations on defense spending and other priorities have yielded a significant agreement,” Senate Majority Leader Mitch McConnell, R-Ky., said on February 7. The agreement comes after lengthy talks behind closed doors between McConnell and Senate Minority Leader Charles E. Schumer, D-N.Y. “We have reached a budget deal that neither side loves, but both sides can be proud of,” Schumer told reporters.
The deal is the product of “extensive negotiations” between congressional leaders and the White House, McConnell said. At press time on February 7, the measure was expected to clear the Senate when taken up.
The agreement between the Senate leaders comes on the heels of the House’s passage of a stop-gap temporary spending bill to keep the government open until March 23. The House passed the measure by a 245-to-182 vote on the evening of February 6. The Senate’s amended version is expected to be sent back to the House by February 8.
How the Senate’s longer-term government spending bill will fare in the House remains to be seen, however. Rep. Jim Jordan, R-Ohio, has asserted that a significant amount of conservative House Freedom Caucus members will oppose the Senate budget bill. Likewise, House Minority Leader Nancy Pelosi, D-Calif., on February 7 took to the House floor for over seven hours to express her opposition to any spending bill that does not address immigration-related issues.
At press time, there was talk on Capitol Hill that the Senate bill could include the revival of certain expired tax break extensions. The expired tax breaks to be considered could potentially include certain energy tax credits under Code Sec. 48. In December, Republicans on the Senate Finance Committee (SFC) introduced the Tax Extender Bill of 2017 (Sen 2256) (TAXDAY, 2017/12/22, C.1). Included in the bill are many expired energy tax incentives (TAXDAY, 2018/ 01/ 11, C.1).
While several senators have expressed support for tax extenders, top House Ways and Means Committee lawmakers have often criticized the method of temporary tax breaks. Ways and Means Chairman Kevin Brady, R-Tex., has acknowledged that discussions on tax extenders have been occurring with Senate colleagues, but that “short-term, temporary policies are rarely the best.” To that end, hearings will soon be held on tax extenders, Ways and Means Tax Policy Subcommittee Chairman Vern Buchanan, R-Fla., told reporters.
The bipartisan agreement would also include $20 billion for U.S. infrastructure programs, according to Schumer. The agreement would allow for “new investment in our nation’s infrastructure, a bipartisan priority shared by the president and lawmakers of both parties,” Schumer said.
As for the White House’s support of the budget agreement laid out in the Senate, a final bill will first need to be seen, according to White House Press Secretary Sarah Huckabee Sanders. “We applaud the steps forward that they’ve made, but we’re going to need to see what is in the final bill,” Sanders told reporters in a February 7 press briefing. “We’re certainly happy with the direction that it’s moving, particularly that we’re moving away from the crisis budgeting that we’ve been on in the past,” she added. The White House is focused on a two-year budget deal, as opposed to temporary government funding measures, according to Sanders.
By Jessica Jeane, Wolters Kluwer News Staff
Division E—Tax Matters, of the House Amendment to the Senate Amendment Regarding Further Continuing Appropriations, 2018, HR 1892