What to Know in Washington: Tax Breaks for Kids Brewing on Hill
- Lawmakers begin talks on tax deal, with child credits on table
- Biden says millions have applied for student debt relief so far
When Congress returns in a few weeks, Republicans and Democrats will be focusing a compromise to extend tax breaks for both low-income children and corporations — which would hand wins to both parties before year’s end but after the critical midterm elections.
Any deal would resolve a series of tax issues that each party has tried to address. Republicans have warned about damage to US investment and innovation, while Democrats say they won’t vote for any business-tax incentives unless the child-tax credit is also addressed.
Success is seen hinging on the outcome of the November midterm election, with a resounding win for one party likely inhibiting compromise before the new Congress takes office. Passage could offer a marginal lift to households and companies next year just as the US faces rising risks of a recession.
The GOP wants to extend an expansive tax break for research expenses, a writeoff for corporate-debt costs and a tax break letting companies deduct all their capital-expenditure costs in a single year.
Democrats aim to revive a more generous version of the child-tax credit, which was raised from $2,000 per child to as much as $3,600 in President Joe Biden’s American Rescue Plan in 2021. That version of the benefit, which was distributed via monthly payments rather than being included in a tax refund, expired at the end of last year.
After failed attempts by Democrats to include the child-tax credit in what eventually became the Inflation Reduction Act, and by Republicans to secure the breaks for business in the July semiconductor-subsidy bill, negotiators on both sides now see a path to cutting a deal. Read more
Happening on the Hill
Top House Republican Asks State to Preserve Afghanistan Material
Representative Michael McCaul asked the State Department to preserve documents linked to the US withdrawal from Afghanistan, a signal that Republicans will start a new investigation into the issue if House control switches in next month’s midterm elections.
Portman Previews Plans for ‘Grand Bargain on Trade’ in Lame Duck
Sen. Rob Portman (R-Ohio) committed to passing trade policies when the Senate returns after midterm elections, after provisions were dropped from semiconductor legislation.
Clean Water Act Marks 50 Years as Lawyers Say Improvement Needed
The Clean Water Act has been hailed one half-century after its passage for taking steps to curb pollution on the nation’s riverways and streams, but improvements are still needed to ensure the law accomplishes its mission, natural resources attorneys say.
Patents for Human Genes, Diagnostic Tests Generate Policy Debate
Isolated human genes would be patentable, and the costs of medical diagnostic tests would jump under a recently introduced bill to revamp patent eligibility, panelists at an American Civil Liberties Union virtual briefing said Monday—a stance that former patent officials labeled “scaremongering.”
Levin’s Staff Reach Tentative Labor Agreement with $10,00 Raise, Bonus
Staff for Rep. Andy Levin (D-Mich.) have reached a labor agreement that will result in $10,000 raises and end-of-year bonuses after becoming the first House office to vote to unionize in September, according to the Congressional Workers Union. The House in May passed H.Res. 1096, which gave staff permission to unionize.
Elections & Politics
Join Our Wednesday Election Webinar: Bloomberg Government’s election guru, Greg Giroux, will be providing a high-level update on the midterm elections and will take your questions on our Oct. 19 webinar. Register here .
Ryan, Vance Clash on Immigration in Final Ohio US Senate Debate
Democrat Tim Ryan and Republican JD Vance clashed over immigration on Monday in the final debate of their unexpectedly competitive US Senate race in Ohio.
- Meanwhile, Jack Fitzpatrick reported that after the debate, Ryan called on lawmakers to respond to inflation in the near-term with tax cuts “for workers” and small businesses, offset by increases for the top earners. Ryan said his Democratic colleagues haven’t supported his proposal. Vance said during the debate a tax cut is “a great idea” but Ryan’s proposal is “a gimmick” because of his previous support for “runaway spending.”
- Ryan said he likes the approach Democrats took with the Inflation Reduction Act (Public Law 117-169), which mostly raised revenue with a new 15% corporate minimum tax and through increased IRS enforcement funding. “We’ve got to start addressing deficits and debt as we move forward,” Ryan said. “You’ve got guys that are taking spaceships into outer space and not paying a lot in taxes. They could help us get through this time.”
Palin’s Bid for Congress Hinges on Voters Liking Her Second-Best
Sarah Palin has a third shot at getting a job in Washington as she tries again to get to Congress.
Georgia’s Kemp and Abrams Clash in First Debate of Rematch
Georgia Gov. Brian Kemp (R) and Democrat Stacey Abrams clashed Monday night in the first of two debates of their closely watched rematch.
Illinois Campaign Finance Law Blocked on Constitutional Grounds
An Illinois law restricting financial contributions to judicial elections likely infringes too much political activity to pass muster under the First Amendment, a federal judge in Chicago ruled, temporarily blocking sections of the law after a constitutional challenge by two conservative political action committees.
Around the Administration
- Biden is scheduled to give a political speech at Howard Theatre in Washington, at 12:15 p.m.
- At 1:45 p.m., White House Press Secretary Karine Jean-Pierre will give a press briefing.
Biden Says 8 Million Already Applied for Student Debt Relief
President Joe Biden said 8 million Americans had already applied for “life-changing relief,” as he formally launched the application for loan borrowers to seek forgiveness on their student debt.
White House Planning Oil Reserve Release Announcement This Week
The Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the nation’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing further, according to people familiar with the matter.
Blinken Says China Wants Taiwan on ‘Much Faster Timeline’
China has made a decision to seize Taiwan on a “much faster timeline” than previously thought, Secretary of State Antony Blinken said on Monday, shortly after China’s leader reiterated his intent to take the island by force if necessary.
- President Xi Jinping proclaimed on Sunday that Taiwan’s status should be “settled by Chinese people.” Yet he faces a tricky balancing act managing public opinion among China’s 1.4 billion people on an issue that looks set to dominate his third term. Read more
Ex-IRS Officials Urge Swift Appointment of Next Agency Chief
A group of former top IRS officials is urging the White House to quickly announce a nominee for IRS commissioner, saying that doing so is important for implementation of the new funds the agency recently received.
Boeing 737 Max 7’s Approval Faces New Tests From US Regulators
Boeing is getting new questions from US aviation regulators about the Max 7 aircraft, making it more likely the company will be unable to complete the certification process by late December and have to undertake a costly redesign.
Growth of Private Medicare Plans Clouded by Payment Questions
A fast-approaching enrollment tipping point for Medicare managed care plans is increasing the urgency for Congress and the HHS to resolve payment issues that threaten the viability and cost-effectiveness of the popular coverage option.
With assistance from Jack Fitzpatrick
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