The House returns today for four days before taking another break next week for Labor Day. First on the priority list is avoiding a partial government shutdown by getting a continuing resolution (CR) to the president before the start of fiscal year (FY) 2027 on October 1.

Although the House already approved a CR (H.R. 9770) without extraneous provisions to extend government funding through December 4, a Senate-approved version (H.R. 6500) may carry the day. The Senate CR would stretch funding to December 11 and includes several additional provisions sought by the White House. It passed by an impressive 90-6 bipartisan vote. 

Rather than negotiate a compromise CR, House Speaker Mike Johnson (R-LA) appears likely to accede to the Senate to speed passage. But he must first get his conference on board with the idea. If he can get something close to GOP unanimity to proceed, the CR could see a vote soon, but it might take another week or so to lock down that support.

Another big item on the September agenda is a third run at a filibuster-proof reconciliation bill. In July, the House raced forward with a budget resolution that outlined almost $100 billion in funding for military and intelligence, farm relief, and voting integrity reforms at the state level. In the Senate, where Republican enthusiasm for reconciliation is muted by comparison, the budget resolution hasn't notched much progress beyond its introduction in early August by Senate Budget Committee Chairman Ron Johnson (R-WI). Neither the House-passed or Senate-introduced budget resolution have a tax title.

Congress also hopes to make headway on Russia sanctions legislation, reauthorizing the Foreign Intelligence Surveillance Act (FISA), and the 2027 National Defense Authorization Act (NDAA).

One glaring omission from the September agenda is tax policy. Action on taxes is largely tied to the fate of a post-election session, scheduled to start on November 9. A lame-duck session could provide the opportunity for action on extending the Work Opportunity Tax Credit (WOTC), expensing rules for certain sound and visual productions, and the section 48D credit for semiconductor manufacturing (which expires at the end of this year). Other potential tax items include reinstating the full deduction for gambling losses, treaty-like tax treatment for U.S.-Taiwan commerce, technical corrections, and retirement savings.

The House is in recess next week, and the Senate will return from its summer break on September 14. Both chambers plan to head home by October 2 to campaign for the midterms on November 2. No one would be surprised if Congress leaves earlier in September to campaign, especially if lawmakers get a CR to the president's desk before the end of the month. 

With both chambers out next week, Tax Take will return on September 14. #TaxTake

In the News

Marc commented on the prospect for a year-end tax package in Tax Notes: "I think it's always a wild card — regardless of election results and changes in control — what the mood is, but I do think attendance issues are going to be really significant."

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