Senate Blocks Effort to Support SALT Limits: Congress Update
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(Bloomberg) -- Senate Democrats are on track to pass, on a party-line vote, a budget resolution that sets up President Joe Biden’s $3.5 trillion economic agenda. Lawmakers Tuesday afternoon were voting on a slew of proposed amendments.
The blueprint would be followed as soon as September with text implementing a broad array of new education, health and climate programs as well as an extension of tax cuts for the middle class and tax hikes for corporations and the wealthy.
Democrats are using a Senate procedure that allows them to bypass Republicans, but it will require unity in their 50-member caucus to prevail in the evenly divided chamber.
The resolution is being subject Tuesday to a marathon round of votes on proposed amendments, known as a vote-a-rama, that likely will extend late into the night. Most of the amendments are intended as political messaging -- forcing senators to take politically fraught votes -- and are unlikely to be adopted.
Senate Blocks Effort to Support SALT Limits (7:07 p.m.)
The Senate rejected an attempt by Senator Chuck Grassley to voice support for limits on the state and local tax break, or SALT, deduction for wealthy households.The amendment from the Iowa Republican, defeated 48-51, was an attempt to highlight a disconnect in Democrats’ plans to raise tax rates for investors and top earners, but also expand a tax break that would benefit some of those same people. Democrats who support the SALT write-off say that the more than 100-year-old tax break unfairly targeted high-tax and largely Democratic-led states in Republican’s 2017 tax law.Democrats in the budget resolution included language that would direct the Senate Finance Committee to make the SALT deduction more generous. It is currently capped at $10,000 per taxpayer. Including SALT in the bill is a priority for more than 20 House Democrats who have said they won’t support Biden’s economic agenda unless this issue is also addressed. -- Laura Davison
House to Return From Break for Budget Plan Vote (6:40 p.m.)
The House will interrupt its summer recess on Aug. 23 to vote on the budget resolution that is expected to pass the Senate on Tuesday or Wednesday, Majority Leader Steny Hoyer.
Hoyer said in a letter to members that the House will remain in session that week for the vote on the budget framework and other business, including voting rights legislation.
The chamber is currently on break and wasn’t scheduled to return until mid-September.
Fracking Amendment Spotlights Democratic Divide (5:51 p.m.)
The Senate rejected one messaging amendment that disapproved of oil drilling, but adopted another non-binding measure in support of hydraulic fracturing.
The failed amendment, offered by Senator Cynthia Lummis, a Wyoming Republican, would have expressed disapproval at the Biden administration’s ban on oil and gas drilling on federal lands.
The successful amendment, sponsored by North Dakota Republican Kevin Cramer, passed 57-42. It asks the Council on Environmental Quality and Environmental Protection Agency to not issue any regulations that restrict fracking.
Republicans from fossil fuel energy producing states have been increasingly vocal about their opposition to the budget resolution, which calls for tax subsidies for non-carbon energy sources and fees on polluters. The success of the fracking amendment shows how Democrats are divided over energy policy, a potential source of tension as they seek to write the climate-focused legislation later this year. -- Laura Davison
Democrats Tease New Tax Reporting Requirements (5:44 p.m.)
The Senate approved an amendment on party lines that would suggest that the Internal Revenue Service consider collecting bank account data from wealthy taxpayers.The non-binding amendment, sponsored by Senate Finance Chairman Ron Wyden, doesn’t require the IRS to impose new reporting requirements on wealthy individuals, but foreshadows how Democrats are thinking about increasing tax enforcement and compliance. Those changes could ultimately appear in legislation later this year.President Joe Biden has proposed requiring banks to report the account flows of high-income taxpayers to the IRS, so that tax collectors have more data about their incomes. A Treasury report earlier this year found that taxpayers report only 45% of their income when the IRS doesn’t have visibility into their earnings. That compares with a 99% compliance rate for wages where employers are required to report to the IRS, the report said. -- Laura Davison
Senate Backs Protections for Family Businesses (3:37 p.m.)
The Senate adopted a non-binding amendment that puts the chamber on the record in favor of protecting family farmers and business owners from large tax bills when passing the business on to their heirs after they die.
The amendment, offered by John Thune, the No. 2 Senate Republican, passed 99-0. President Joe Biden has proposed that unrealized gains should be taxed when assets are inherited, which would amount to a massive increase in their liability. He has specified that his plans should exempt some farmers and business owners.
Both Democrats and Republicans have expressed concern that Biden’s plans don’t go far enough to protect family-owned businesses and would force some families to sell their businesses because they wouldn’t be able to afford the taxes.
Similar language prohibiting new taxes on families making less than $400,000 per year and small businesses and family farms is already embedded in the base of the budget resolution. -- Laura Davison
Senators Set for Vote Marathon on Budget Plan (2:15 p.m.)
The Senate opened debate on the Democrats’ $3.5 trillion budget resolution and began voting on some of the hundreds of amendment proposed by Republicans.
Senate Budget Chairman Bernie Sanders said the health care expansions, education upgrades, and climate measures will remake the American economy and “restore the faith of the American people in the belief that we can have a government that works for all of us and not just a few.”
Lindsey Graham, the top Republican on the Budget Committee, said Democrats were pursuing a reckless tax-and-spend agenda that would undermine the economy.Senators are set to vote on dozens of amendments in the coming hours, a process that could stretch late into the night. Republicans have proposed hundreds of provisions to restrict the ability of Democrats to raise taxes or change immigration laws, though only a fraction of those will ultimately get a vote, and very few are likely to pass.Among the amendments that will get a vote is a measure to oppose tax hikes for wealthy farmers and small business owners and another provision that would prevent expanding the state and local tax, or SALT, deduction. -- Laura Davison
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