On Jan. 31, after more than a year of negotiations, the House overwhelmingly approved a tax bill that included some popular business tax breaks and Child Tax Credit (CTC) enhancements.
The House’s 357-to-70 support of the Tax Relief for American Families and Workers Act, plus its bipartisan origin — it was a compromise worked out by Democratic Senate Finance Committee Chair Ron Wyden of Oregon and Republican House Ways and Means Chair Jason Smith of Missouri — seemed to indicate H.R. 7024 also would sail through the Senate.
Then the realities of a presidential election year hit.
Stalled for months in Senate: After House passage, the bill languished in the Upper Chamber until last week.
Some Republicans didn’t like the Employee Retention Credit (ERC) provisions that would pay for the bill. Others raised concerns about the bill going to a vote without subcommittee and committee hearings and public input.
And, of course, there was the worry that reinstatement of the expired popular business and individual tax breaks would be seen as a pre-election day political win for Democrats. The
Dems decided to take that political angle, forcing a vote on the bill on Aug. 1. It failed.
Actually, the vote wasn’t on the actual tax measure. It was a procedural vote that went down 48-to-44. Sixty “yeas” were required to proceed.
Most GOP senators and two Independents — Sens. Joe Manchin of West Virginia and Bernie Sanders of Vermont, who usually caucus with Democrats — voted no. Republican Sens. Josh Hawley of Missouri, Markwayne Mullin of Oklahoma, and Rick Scott of Florida joined Democrats in voting yes.
Outlook not good: Following the vote, Senators departed Washington, D.C. for their annual August recess. The House started its late summer break the previous week.
That means businesses will face upcoming September and October filing deadlines with the tax breaks in limbo. And Democrats will use Republican opposition in their campaign speeches and ads.
The coverage (below) of the tax measures and Senate vote also are this weekend’s multiple Saturday Shout Outs.
- Senate blocks bipartisan tax package by Benjamin Guggenheim for Politico
- U.S. Senate fails to advance expanded child tax credit, despite broad House support by Ashley Murray for New Jersey Monitor
- Senate Rejects Bipartisan Tax Deal by Andrew Duehren for the New York Times
- Bipartisan tax package blocked as senators head for exits by Caitlin Reilly for Roll Call
- Senate Republicans block a child tax credit expansion by Jacob Bogage for the Washington Post
- Senate Kills Bipartisan Tax Bill by Richard Rubin and Lindsay Wise for the Wall Street Journal
- Senate rejects legislation that would expand child tax credit and restore business tax breaks by Kevin Freking for the Associated Press
- Senate GOP blocks bipartisan bill to expand child tax credit by Tobias Burns for The Hill
- Senate GOP blocks tax bill as Democrats spotlight child credit in election-year push by Clare Foran, Tami Luhby, and Morgan Rimmer for CNN
Lame duck consideration unlikely: While it is possible the tax bill could come up again when the Senate (and House) return in September.
But that month they also must find a way to keep the federal government running. Current federal financing expires Sept. 30, the end of the 2024 fiscal year.
The House has made little progress on the 12 annual appropriations bill. So September business on Capitol Hill likely will be focused on not closing government offices right before election day.
You also might find these items of interest:
- 5 new warning signs your ERC claim might be wrong
- The Presidential Election Campaign Fund: useful or useless?
- House GOP Tax Teams seek public input on expiring tax reform provisions
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