Thank you to Russ Sullivan and the team at Brownstein Hyatt Farber Schreck LLP for this report.
Over The Weekend
Now that the American Rescue Plan (P.L.117-2) has been enacted, lawmakers are pivoting to consider economic recovery legislation. Up first in House will be a comprehensive infrastructure package, according to a statement released last week by Speaker Nancy Pelosi (D-CA), who discussed the plan on this weekend’s Sunday talk shows.
During her remarks, Pelosi underscored that infrastructure has long been an area of bipartisan interest and said she has instructed committee chairs to seek common ground with their Republican counterparts. When asked about financing the package, a longtime stumbling block for infrastructure legislation, Pelosi said she anticipates passing a “fiscally sound” package. She mentioned specific ways to offset the cost of the package, suggesting Congress could look at the Harbor Maintenance Tax Credit and Build America Bonds. At the same time, Pelosi left the door open to other revenue raisers.
Sen. John Barrasso (R-WY) also discussed the infrastructure package over the weekend and reiterated Pelosi’s call for bipartisanship. He urged the House to consider legislation like the America’s Transportation Infrastructure Act, which he advanced with bipartisan support last Congress as chair of the Senate Environment and Public Works Committee before it stalled in the House. He has personally reached across the aisle on the issue, saying in a March 13 interview that he met with Transportation Secretary Pete Buttigieg, although he did not offer any further details on their discussion.
Finally, Treasury Secretary Janet Yellen discussed issues related to federal spending and the budget deficit. When pressed on the risk of inflation as a result of outsized spending, Yellen admitted “there’s a small risk” before adding that “it’s manageable.” On fiscal sustainability more broadly, Yellen said her “views have changed somewhat,” explaining that there is a global trend towards low interest rates—a trend she said would not disappear soon. In terms of the burden of debt, then, she said she views the issue in terms of the interest payments government pays, adding that in spite of the recent debt increase, those interest payments relative to the size of the economy have still remained low.
Yellen was asked to comment on Sen. Elizabeth Warren’s (D-MA) wealth tax proposal, the Ultra-Millionaire Tax Act. She deferred to the administration’s position, saying President Biden is yet to release any proposals on a wealth tax. Instead, she said President Biden has indicated his support for increased taxes on wealthy individuals and corporations and on capital gains—two proposals with effects she said are similar to that of a wealth tax. Yellen said, as the administration seeks to address economic needs and reign in the federal deficit, the Biden administration would likely issue proposals to raise federal revenue.
On The Floor
The House will vote on two bills to honor Women’s History Month—the Violence Against Women Reauthorization Act (H.R.1620), which would address domestic violence and sexual harassment, and H.J.Res.17, a resolution to remove the deadline to ratify the Equal Rights Amendment.
The House will also consider two immigration bills—the American Dream and Promise Act (H.R.6), which would allow “Dreamers” to earn lawful permanent residence and American citizenship, and the Farm Workforce Modernization Act (H.R.1603), which would create a pathway for agricultural workers to earn legal status and reform the H-2A guestworker program.
The House will also consider legislation to prevent cuts to Medicare, as well as farm supports and other programs implicated by sequestration, according to House Majority Leader Steny Hoyer (D-MD).
The following tax and financial services bills will be considered under suspension of the rules:
- PPP Extension Act (H.R.1799), which would provide two additional months to seek loans through the Paycheck Protection Program;
- Microloan Improvement Act (H.R.1502), which would optimize the operations of microloan programs, lower costs for small business concerns and intermediary participants in such programs;
- Microloan Transparency and Accountability Act (H.R.1487), which would establish an annual Portfolio Risk Analysis to detail statistics that are needed for a government guarantee loan program;
- 504 Modernization and Small Manufacturer Enhancement Act (H.R.1490) which would improve the loan guaranty program and enhance the ability of small manufacturers to access affordable capital;
- 504 Credit Risk Management Improvement Act (H.R.1482), which would require the Small Business Administration to issue rules relating to environmental obligations of certified development companies;
- Promoting Transparent Standards for Corporate Insiders Act (H.R.1528), which would require the Securities and Exchange Commission (SEC) to consider amending a rule to place additional restrictions on executives and corporate insiders who buy and sell company shares; and
- Eliminate Barriers to Innovation Act (H.R.1602), which would direct the Commodity Futures Trading Commission and the SEC to establish a digital asset working group.
The Senate will continue confirming Biden administration nominees, voting this week on the following:
- Debra Haaland to be Secretary of the Interior;
- Isabella Guzman to be Administrator of the Small Business Administration; and
- Katherine Tai to be U.S. Trade Representative
- House Financial Services Committee
On Wednesday, the full committee will hold a hearing entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media and Retail Investors Collide, Part II,” during which the following witnesses will testify:
- Michael Blaugrund, Chief Operating Officer, New York Stock Exchange;
- Vicki Bogan, Associate Professor, Cornell University;
- Alexis Goldstein, Senior Policy Analyst, Americans for Financial Reform; and
- Dennis Kelleher, Co-Founder, President and Chief Executive Officer of Better Markets
With the House Financial Services Committee and the Senate Banking Committee having already held hearings on the topic, this will be the third opportunity for lawmakers to examine the market and societal conditions that led to the recent share price volatility for companies like GameStop and AMC. Similar to the previous hearings, lawmakers will explore potential legislative options to change regulations of the financial sector, potentially with the aim of addressing so-called “gamification” and curbing payment for order flow.
On Thursday, the Diversity and Inclusion Subcommittee will hold a hearing entitled “By the Numbers: How Diversity Data Can Measure Commitment to Diversity, Equity and Inclusion.” Witnesses have not yet been listed.
The hearing could contain discussion of the importance of diversity and inclusion in the financial sector. Last year, House Financial Services Committee Chair Maxine Waters (D-CA) and Diversity and Inclusion Subcommittee Chair Joyce Beatty (D-OH) released a report on the topic, which found that diversity among bank leadership was lacking and provided potential legislative recommendations. This week’s hearing could expand upon this effort.
Senate Banking Committee
On Tuesday, the full committee will hold a hearing entitled “Home = Life: The State of Housing in America,” during which the following witnesses will testify:
- Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies;
- Diane Yentel, President and CEO, National Low Income Housing Coalition;
- Nikitra Bailey, Executive Vice President, Center for Responsible Lending,
- Edward Pinto, Director, AEI Housing Center; and
- Ed DeMarco, President Housing Policy Council
Lawmakers could examine the effects of the COVID-19 pandemic on housing, particularly for low-income Americans and federal efforts to provide assistance by expanding benefits like the Affordable Housing Tax Credits and imposing a moratorium on evictions and foreclosures. Committee Chair Sherrod Brown (D-OH), who recently issued a press release on discrimination in the housing system, may raise the issue during discussion.
On Thursday, the full committee will hold a hearing entitled “21st Century Economy: Protecting the Financial System from Risks Associated with Climate Change,” during which the following witnesses will testify:
- Nathaniel Keohan, Senior Vice President, Environmental Defense Fund;
- Marilyn Waite, Climate and Clean Energy Finance Program Officer, The William and Flora Hewlett Foundation;
- John Cochrane, Senior Fellow, Hoover Institution, Stanford University; and
- Benjamin Zycher, Resident Scholar, American Enterprise Institute
Committee Chair Sherrod Brown (D-OH) has identified climate change as a top committee priority under his leadership. In a March 1 letter to Federal Reserve Chair Jerome Powell and Governor Lael Brainard, Brown underscored the potential for non-sovereign crypto-assets, such as Bitcoin, to pose financial stability risk, “including risk to our climate.” He could question witnesses about the issue during Thursday’s hearing.
House Ways and Means Committee
On Thursday, the Oversight Subcommittee will hold a hearing entitled “IRS Commissioner on the 2021 Filing Season,” during which the following witnesses will testify:
- Charles Rettig, Commissioner, Internal Revenue Service
IRS Commissioner Charles Rettig is expected to receive questions on the progress of the 2021 tax filing season, which began on Feb. 12 after a slight delay. According to recent data, the number of tax returns filed has declined by 25% relative to last year, and the number of returns processed was down by 31%. For these and other reasons, House Ways and Means Committee Chair Richard Neal (D-MA) and Oversight Subcommittee Chair Bill Pascrell (D-NJ) called on Rettig last week to extend the filing deadline beyond April 15. Rettig, who is likely to face similar questions this week, has since opposed calls for such an extension.
Senate Finance Committee
On Tuesday, the full committee will hold a hearing entitled “Made in America: Effect of the U.S. Tax Code on Domestic Manufacturing,” during which the following witnesses will testify:
- George Davis, Executive Vice President and CFO, Intel Corporation;
- Jonathan Jennings, Vice President, Global Commodity Purchasing and Supplier Technical Assistance, Ford Motor Company;
- Jay Timmons, President and CEO, National Association of Manufacturers,
- Michelle Hanlon, Howard Johnson Professor, Sloan School of Management, Massachusetts Institute of Technology; and
- Donnie Blatt, District Director, United Steelworkers
The hearing comes after Senate Majority Leader Chuck Schumer (D-NY) announced on Feb. 23 that he has directed several committees to begin working on legislation to improve U.S. competitiveness with China. The legislation, which is expected to address U.S. supply chain reliance on China, will be centered around the Endless Frontier Act that Schumer introduced last Congress with Sen. Todd Young (R-IN), a Senate Finance Committee member. The hearing could serve as Senate Finance Committee Chair Ron Wyden’s (D-OR) first steps in crafting the panel’s portion of the so-called “China package,” which Schumer said he wants to begin advancing before April.
On Thursday, the full committee will hold a hearing entitled “Fighting Forced Labor: Closing Loopholes and Improving Customs Enforcement to Mandate Clean Supply Chains and Protect Worker,” during which the following witnesses will testify:
- Joseph Wrona, Member, United Steelworkers;
- Martina Vandenberg, Founder and President, Human Trafficking Law Center;
- Julia Hughes, President, U.S. Fashion Industry Association; and
- Leonardo Bonanni, Founder and CEO, Sourcemap
While somewhat unclear, the scope of this hearing is similar Tuesday’s, albeit more focused on the committee’s jurisdiction over trade concerns. The hearing could include discussion of how Congress can bolster border enforcement to stem the importation of supply chain products assembled with forced labor abroad.
Tax and Finance Rewind
In case you missed it…
- President Biden announced he intends to nominate the following individuals to key economic and tax policy positions within the Treasury Department: Lily Batchelder for Assistant Secretary for Tax Policy, Nellie Liang for Under Secretary for Domestic Finance, Ben Harris for Assistant Secretary for Economic Policy and Jonathan Davidson for Assistant Secretary for Legislative Affairs. Click here to learn more about the nominees’ backgrounds, research and potential impact on the administration, if confirmed.
- The Department of Labor said last week it will not enforce regulations limiting certain activities by financial advisers of retirement plans related to environmental, social and governance (ESG) issues. The rules, enacted under the Trump administration, would have prohibited financial advisers of employer-sponsored retirement plans from investing for any other reason than to generate the highest return possible. The rules have been interpreted as targeting ESG funds.
- A group of conservative organizations sent a letter to members of Congress last week voicing their opposition to a financial transactions tax (FTT), which some lawmakers have advocated in response to the market trading spectacle involving GameStop and Robinhood. In support of their position, the group said an FTT would harm the 53% of American households that own stock and the 100 million that have a 401(k).
Thank you to Russ Sullivan and the team at Brownstein Hyatt Farber Schreck LLP for this report.
Policy and Taxation Group is your voice in Washington on economic freedom. We advocate for policies that allow American families to fully enjoy the economic liberties and benefits of a robust free market unique to our nation. For over 25 years, we have been the loudest voice in the nation’s capital on eliminating the death tax. This ill-conceived tax has a destructive impact on families, family businesses, job creation, and the national economy.