What to Know in Washington: Tax Package Hits Senate GOP Pitfall

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Senate Republicans are poised to sink a $78 billion tax-cut package, gambling that they’ll win the majority in November and can push then for bigger breaks for business.

They also don’t want to hand President Joe Biden an election-year victory on the legislation, which includes both child and business tax breaks, lawmakers and aides have said.

The package, the top business lobbying objective this year, easily passed the Republican-controlled House in January on a bipartisan 357 to 70 vote. It also has support of the White House. But Senate Republican leader Mitch McConnell (R-Ky.) supports efforts to block the package, as does his No. 2, John Thune (R-S.D.).

Both senators were once considered potential supporters of the bill, a GOP aide said, but are now bending to strong opposition to the child tax credits from Mike Crapo (Idaho), the lead Republican on the Senate Finance Committee.

The issue has become ensnared in internal Senate GOP politics. With McConnell abandoning his long-held leadership post, Thune is vying for the top spot and doesn’t want to run afoul of a key committee leader.

Crapo last month sent Democrats a list of requested changes to the bill, people familiar with the matter said. That list included requiring parents of children receiving the credit to submit Social Security numbers to verify their immigration status and rescind the retroactive break for 2023.

Democrats are unwilling to back the additional changes to the bill, which had already been hashed out in bipartisan negotiations, people familiar with the talks said.

The measure would restore expired tax breaks allowing businesses to more quickly recoup costs of domestic research and development, interest on business loans, and investment in new equipment. Working parents would receive more generous child tax credits, and be eligible for the first time to claim multiple children. Read more from Erik Wasson and Samantha Handler.

Meanwhile, the HOUSE WAYS AND MEANS Committee will discuss the path forward for tax policy ahead of the upcoming 2025 tax fight in an April 11 hearing, Chair Jason Smith (R-Mo.) announced.

Many individual provisions of the 2017 GOP tax law are set to expire at the end of 2025. Ways and Means Republicans have proposed the creation of tax policy task forces to help guide the party’s thinking on aspects of the tax code.
Exact categories for each group haven’t been announced, but members have been asked to provide input on what their top priorities are. Whether the groups will be bipartisan remains an open question. Read more.

BIDEN’S AGENDA

The president heads to Baltimore where he’ll visit the collapsed Francis Scott Key Bridge. He’ll receive an aerial tour around 12:30 p.m.
Biden will the participate in an operational briefing on response and recovery efforts after 1:30 pm., and will meet with federal personnel, state and local officials, and first responders around 2 p.m.
He will deliver remarks around 2:30 p.m., and then meet with loved ones of the six individuals who died in the collapse.
Biden will leave Baltimore for Wilmington, Del., where he’ll arrive around 5:15 p.m.

CONGRESS’ SCHEDULE

The House and Senate return from recess next week.
For a preview of next week’s agenda, read BGOV’s Congress Tracker.

Also Happening on the Hill

Congress should fully repair costs to BALTIMORE’s collapsed bridge, Biden administration urged in a letter to key lawmakers. Read more.

Preliminary findings of a probe into the collapse are set for release by the National Transportation Safety Board within days, people familiar said. Read more.

Colleagues of ADEEL MANGI, Biden’s historic Muslim judicial pick, are coming to his defense as opposition from three Senate Democrats jeopardizes his chances of confirmation to the 3rd Circuit Court of Appeals. Read more.

Defense & Foreign Affairs

The White House pressed RUSSIA to back a US-backed resolution at the UN Security Council that would warn against nuclear weapons in orbit, amid reports that President Vladimir Putin might be planning to do exactly that. Read more.

MIGRANT CHILDREN can no longer be held for long periods in dangerous “open-air detention sites” along the California-Mexico border, a federal judge said, ordering the government to bring them to safer shelter. Read more.

The union representing 45,000 TSA AGENTS asked federal officials to boost security around public charter carrier flights. These flights are “a major security vulnerability,” the American Federation of Government Employees said. Read more.

People, Power, and Politics

Trump-era Justice Department official JEFFREY CLARK could lose his law license after a D.C. Bar panel found he violated ethics rules in trying to overturn the 2020 election by lying about election fraud. Read more.

Swiss bank UBS won dismissal of a lawsuit by the software company that made Donals Trump’s 2020 campaign app accusing the bank of manipulating its shares by placing “spoof trades.” Read more.

JOHN PAULSON, the man famous for a big bet against subprime mortgages at his now-closed hedge fund, is luring other billionaires back into Trump’s orbit to support his rematch against Joe Biden.

On Saturday, Paulson’s Palm Beach home will be the setting for a 100-person dinner with Trump, with admission running as high as $814,600 per guest. Read more.

The State of the Economy

The CRYTPOCURRENCY industry, feeling the squeeze from top securities regulators suing in New York, is taking its offense to Texas, with backing from venture capital giants and Supreme Court veterans. Read more.

The SEC put its climate reporting rules for public companies on hold in the face of several legal battles, including a challenge brought by the influential US Chamber of Commerce, before the 8th Circuit Court of Appeals. Read more.

META pushed back on the FTC’s bid to amend its 2020 privacy settlement, saying the company voluntarily disclosed two flaws in its kids chat app to the agency and received no complaints from parents. Read more.

What Else We’re Watching

Victims of two deadly BOEING 737 MAX crashes that killed 346 people in 2018 and 2019 will meet with Justice Department investigators next week, Reuters reports, citing correspondence viewed by the outlet. Read more.

CVS HEALTH plans will cover over-the-counter oral birth control in the US, a step that further removes barriers to obtaining oral contraception as reproductive rights increasingly come under fire. Read more.

A key APPEALS COURT may not being able to weigh in a pair of cases with national significance — one involving the CFPB and another the NLRB — as some parties try to move high-profile cases out of the 5th Circuit’s jurisdiction. Read more.

IMMIGRANTS facing processing delays to renew WORK PERMITS will get a year and a half of additional employment authorization through new regulations released by US Citizenship and Immigration Services. Read more.

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Jeannie Baumann in Washington at jbaumann@bloombergindustry.com

To contact the editors responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com; Giuseppe Macri at gmacri@bgov.com

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