If all goes according to schedule, the Senate will recess for the summer as early as Friday, August 7. Two opposing forces will determine the outcome: the president's demand for immediate action on the voter integrity provisions of the Safeguard American Voter Eligibility (SAVE) Act and the desire among Republican senators to get home and campaign. Ultimately, Majority Leader John Thune (R-SD) will make the final call as he juggles a handful of major pre-recess legislative priorities.

After fast-tracking late Senator Lindsey Graham's (R-SC) Russia sanctions bill and confirming a new Director of National Intelligence (DNI) last week, Leader Thune is working to advance or postpone work on these major issues: 

• Confirming Todd Blanche as the next Attorney General. The Committee on the Judiciary had to cancel its scheduled vote to advance the nomination to the floor late last week. The race is on to lock down the support of Senators John Cornyn (R-TX) and Thom Tillis (R-NC) and move the nomination from committee to the floor. One vote off the table is Senator Mitch McConnell (R-KY), who is still absent.
• The National Defense Authorization Act (NDAA). Just before leaving town last month, the House passed its version of the defense bill (H.R. 8800) by a vote of 216-212. An initial vote to limit debate on the Senate's NDAA bill failed by 10 votes in July. Since then, little progress has been reported.  
• Funding the government beyond September 30, the start of fiscal year (FY) 2027. The House passed a clean continuing resolution (CR) in late July that would extend funding through December 4, 2026. Leader Thune wants to add a handful of policy provisions, including several White House requests. He needs 60 votes and has threatened to use reconciliation to close out FY 2026 funding if he can't reach a deal with Democrats.
• Reconciliation 3.0. Leader Thune has yet to commit to acting on a third filibuster-proof reconciliation bill that funds defense, intelligence, farming relief, and election integrity measures at the state level. The House cleared its budget plan in late July, and the president is demanding action from the Senate on reconciliation before the August recess. Thune still insists there aren't 50 Republican votes for anything like the House-passed budget resolution. Some Senate Republicans want more defense spending, and others worry that the election-integrity provisions demanded by the president will nonetheless get tossed by the parliamentarian as non-germane to reconciliation. Recognizing this threat, the president has called on Republicans to overrule or replace the parliamentarian and to eliminate the Senate filibuster to get his preferred election reforms through Congress. But support for these institutional changes among Senate Republicans is virtually non-existent. The summer recess hinges on how this gets resolved. 

Tax policy was shut out of the second and third reconciliation drives, but a year-end tax bill could still come together in the post-election Congress. Toward that end, the Senate Committee on Finance reported a tax administration reform bill last week that matches up with similar legislation approved in the House Committee on Ways and Means. Other tax provisions that enjoy some measure of bipartisan support could be in play for a year-end tax package, including: 

• Tax treaty-like treatment for income between U.S. and Taiwan taxpayers
• Extending lapsed provisions, such as the Work Opportunity Tax Credit (WOTC) and expensing rules for certain sound and visual productions, and the Section 48D credit for semiconductor manufacturing, which expires at the end of this year
• Legislation to update and improve the taxation of digital assets
• Restoring the full deduction for gambling losses
• Cleanup work on technical corrections and perhaps some retirement savings provisions

Once (or if) the Senate does leave town for the summer, it plans to resume work on September 14 and stay in session for three weeks before adjourning again for a month of campaigning ahead of the November midterms. The lame duck session of Congress is slated to begin November 9, 2026. #TaxTake

Upcoming Speaking Engagements

Marc will present the American Staffing Association (ASA) webinar "Federal Tax Policy and the Impact of the Pending Mid-Term Elections" on August 20.

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