Tax & Financial Services Week Ahead, November 29, 2021

Brownstein Hyatt Farber Schreck

The House and Senate will reconvene Tuesday at 2 p.m. and Monday at 3 p.m., respectively. 

What to Watch

On Friday, Nov. 19, the House passed the Build Back Better Act 220-212. The only House Democrat to vote against passage was Rep. Jared Golden (D-ME). 

The vote came after the Congressional Budget Office (CBO) released the final scores of the Build Back Better Act. Overall, the CBO estimated the legislation would increase the national deficit by $367 billion over 10 years. The estimate did not include revenue generated by proposed funding for tax enforcement, which Democrats argue could raise up to $400 billion over a decade, although this estimate has been challenged by Republicans. The deficit increase in the CBO score did not result in centrist Democrats revoking their support for the bill. 

The bill now moves to the Senate for consideration, but major issues must still be resolved. Some changes will be technical with regards to keeping provisions compliant with the Byrd rule, while others will be substantive. 

Congress must also move this week to enact government funding. Earlier this year, Congress passed a continuing resolution (CR) that extended government funding to this Friday, Dec. 3. Neither chamber has yet formally introduced legislation to extend government funding, but House Appropriations Committee Chair Rosa DeLauro (D-CT) is expected to introduce a CR soon that would extend current funding. The duration of the next CR is an open question. It could be through the latter half of January or February, though appropriators were previously considering a shorter-term extension through Dec. 17. 

Congress must also address the debt ceiling in the coming weeks as well. Treasury Secretary Janet Yellen, who will be testifying before both chambers this week, has estimated the government will no longer be able to meet its obligations by Dec. 15. 

Finally, the Senate will also resume consideration of the National Defense Authorization Act (NDAA) this week, which it began before the Thanksgiving break. The filing deadline for first-degree amendments was 3:30 p.m. today. A cloture vote is expected at 5:30 p.m. today. 

On the Floor

The House is not scheduled to vote on any tax or financial services legislation this week. 

In addition to the NDAA, the Senate will vote to confirm Jonathan Kaplan to be ambassador to the Republic of Singapore and a number of U.S. district attorneys. 

In Committee

Senate Banking Committee

On Tuesday, the full committee will hold a hearing entitled “CARES Act Oversight of Treasury and the Federal Reserve: Building a Resilient Economy,” during which the following witnesses will testify: 

  • Treasury Secretary Janet Yellen
  • Federal Reserve Board of Governors Chair Jerome Powell 

Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted in March 2020, the Treasury Department and the Federal Reserve were directed to take a series of steps to provide economic assistance to those affected by the COVID-19 pandemic. The law also included congressional oversight measures, requiring the Treasury Secretary and Federal Reserve Board Chair to regularly testify before Congress on the pandemic response programs enacted under the CARES Act. As such, lawmakers are expected to inquire into the state of these programs. At the same time, lawmakers could expand beyond these programs and ask about the overall economy, the provisions in the Build Back Better Act and other economic issues. 

House Financial Services Committee

On Wednesday, the full committee will hold a hearing entitled “Oversight of the Treasury Department’s and the Federal Reserve’s Pandemic Response,” during which the following witnesses will testify: 

  • Treasury Secretary Janet Yellen
  • Federal Reserve Chair Jerome Powell 

Lawmakers are expected to explore topics similar to those raised during the Senate Banking Committee hearing. 

House Ways and Means Committee 

On Thursday, the Trade Subcommittee will hold a hearing entitled “Supporting U.S. Workers, Businesses and the Environment in the Face of Unfair Chinese Trade Practices.” Witnesses have not yet been named. 

China has been accused of skewing the playing field by employing unfair trade practices, such as engaging in preferential treatment of Chinese state enterprises, inadequately enforcing intellectual property rights and supporting cyber theft. These alleged actions have negatively affected U.S. companies. During this hearing, lawmakers could explore the extent of the damage caused to U.S. companies and consider potential legislative responses. 

Senate Finance Committee

The committee has no hearings or markups scheduled this week.


Tax and Finance Rewind

In case you missed it…

  • On Tuesday, the Congressional Budget Office (CBO) released supplemental information about certain provisions within the Build Back Better Act. The additional information included slide decks on the economic effects of expanding subsidized child care and providing universal preschool, offering a federal paid family and medical leave program and expanding home- and community-based services in Medicaid. 
  • On Tuesday, the Joint Committee on Taxation (JCT) updated its distributional analysis on the revenue provisions in the Build Back Better Act. The updated numbers indicate that taxpayers earning above $1 million would face an average tax rate of 33.1%, rather than the 28.2% JCT previously estimated.

Upcoming Activity

Below is a complete list of all tax and financial services events in Congress, the administration and private sector for the upcoming week. 

Administration

Monday, Nov. 29

Federal Reserve Board Governor Michelle Bowman
Central Banks and Indigenous Economies 

Tuesday, Nov. 30

Federal Reserve Board Vice Chair Richard Clarida 
Federal Reserve Independence: Foundations and Responsibilities

Community Development Financial Institutions Fund
Meeting of the Community Development Advisory Board  

Thursday, Dec. 2

Securities and Exchange Commission 
Meeting of the Investor Advisory Committee 

Treasury Department 
Meeting of the Federal Advisory Committee on Insurance 

Other

Tuesday, Nov. 30

Bank Policy Institute 
International Bank Regulation Forum 

Wednesday, Dec. 1

Aspen Institute 
Rebuilding the Post-Pandemic Economy 

Thursday, Dec. 2

American Enterprise Institute 
The Fed’s Supervision and Regulation 

Peterson Institute for International Economics 
The State of the Labor Market and Inflationary Pressures

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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