How long will this one last? The House has passed 9 of the 12 appropriations bills needed to fund the government for the fiscal year that began last October, but the Senate has approved none. The top Republican on the Senate Appropriations Committee, Richard Shelby, says a third stopgap measure may be needed before the current measure expires Feb. 18. Will the Senate need another few weeks to reach agreement on an omnibus spending bill, or months?
The House passed the America COMPETES Act. On Friday the chamber passed legislation designed to support domestic supply chains and improve competitiveness with China. The bill, approved mostly along party lines, includes $52 billion to encourage US semiconductor chip production. The House now must reconcile its bill with the Senate’s Innovation and Competition Act, passed last June.
On the Hill tomorrow. National Taxpayer Advocate Erin Collins testifies tomorrow at 2:00 pm before the House Ways & Means Oversight Subcommittee on challenges facing taxpayers this filing season. The Senate Finance Committee will hold a hearing tomorrow morning at 10:00 am on protecting the mental health of young people.
How has the pandemic affected the way the TCJA indexes the tax code for inflation? It’s complicated. The Tax Cuts and Jobs Act uses chained CPI to index parts of tax code to inflation. Unlike the standard measure of inflation, it takes into account how consumers change spending behavior in response to higher prices. In normal times, chained CPI reduces inflation adjustments for tax brackets, resulting in higher taxes. But COVID-19 caused wild changes in spending unrelated to price fluctuations. TPC’s Rob McClelland explains that while this means chained CPI is growing faster than the standard inflation measure, it may not translate to larger inflation adjustments for taxpayers.
Tune in Thursday for your TPC Prescription with Liz Farmer. The Rockefeller Institute fellow and consultant at Funkhouser & Associates will be TPC’s Howard Gleckman’s guest. She’ll discuss why state and local governments are struggling to hire despite strong revenue growth and federal aid. Register and tune in here.
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