Congress Votes and Departs to Campaign
Because the House and Senate have not yet passed a budget for the fiscal year starting on October 1, it was necessary to pass a continuing resolution. The House passed the resolution by a vote of 319 to 108 on September 17. The Senate followed on September 18 with approval by a vote of 78 to 22.
The continuing resolution funds the government at current levels until December 11. There are three specific impacts of the bill in addition to continuing spending at the current level.
First, the House had approved a reduction in the IRS budget. This reduced IRS budget will not take effect until the negotiations in the lame duck session are complete. Second, the prohibition against state taxes of sales over the Internet was expected to expire. It now will be continued until the anticipated Congressional review. Finally, President Obama requested funds to support moderate Syrian rebel forces in the conflict with the Syrian government and the Islamic State. The bill includes President Obama’s requested funding for support of the Syrian rebels.
Members of the House and Senate promptly departed for the 2014 campaign. They deferred action on several items until the lame duck session. A key bill that is expected to be passed during that session will be the tax extenders.
Senate Finance Committee Chairman Ron Wyden (D-OR) urged Congress to move promptly to pass the extenders. He stated, “Congress’ failure to renew expired tax provisions is forcing these companies to make ’no interest loans’ to the federal government through higher taxes. It’s unacceptable that inaction by Congress is denying American business the clarity and certainty they need to plan for tomorrow. This is a real issue that is impacting those at the heart of the country’s economic growth.”
Rep. Paul Ryan (R-WI) is expected to assume the chairmanship of the House Ways and Means Committee in January. He spoke at a conference in Washington this week and suggested that the tax extenders should not be factored into the revenue calculations because they have been regularly extended without offsets. Ryan noted, “The result of the extenders negotiations in the lame duck will help determine that.” He hopes to make several extenders permanent in the lame duck negotiations. The House has passed permanent versions for twelve of the fifty-four extenders.
Editor’s Note: This election will have a major impact on the potential in 2015 for tax reform. If the Democratic Party continues to hold the Senate, then Sen. Wyden has expressed intention to move forward on reform. If control of the Senate moves to the Republicans, Sen. Orrin Hatch (R-UT) is the likely incoming Chair of the Senate Finance Committee. He also is committed to moving forward with major tax reform next year.
Published September 19, 2014