The House plans to vote tomorrow on a week-long stopgap funding measure. The continuing resolution would keep the federal government funded through December 18. The Senate is likely to vote on Friday, just before the current spending bill expires. The brief reprieve would give congressional and White House negotiators more time to reach a spending deal to cover the rest of the fiscal year and time to work out details of a pandemic relief bill. Congressional leaders are under pressure from rank-and-file members and much of the public to fund the government and provide economic relief before the holidays.
Does the federal debt matter? Not as much as it used to, says former Treasury Secretary Larry Summers and former top Obama economic adviser Jason Furman. They argue that 30 years of low interest rates should change the way policymaker think about the $20 trillion federal debt. Fiscal policy should focus on economic growth, not debt reduction, they say. TPC’s Howard Gleckman looks at the Furman/Summers view.
Push continues for deductibility of PPP loan expenses. Business groups want Congress to allow firms to deduct expenses related to Paycheck Protection Program (PPP) loans. The IRS has prohibited such deductions. The bipartisan $908 billion emergency relief framework directs $288 billion toward PPP loans and an early draft of the plan allows for deductibility.
Billionaires want non-profit foundations to distribute more of their assets. The Initiative to Accelerate Charitable Giving, a coalition of billionaires, academics, and large foundations, is urging Congress to revise the tax code to encourage more charitable giving. Its proposals would create new incentives for private foundations and donor advised funds to distribute more of their assets each year and create a permanent above-the-line deduction for charitable giving for non-itemizers.
Can the Biden Administration accomplish its tax policy goals? How should it prioritize its efforts? Tune in this afternoon. TPC’s Howard Gleckman will talk with former Treasury Secretary Jack Lew, followed by a panel featuring former Chairman of the Council of Economic Advisers Jason Furman, former Congressional Budget Office Director Doug Holtz-Eakin, and Chye-Ching Huang, Senior Director of Economic Policy at the Center on Budget and Policy Priorities. TPC’s Tracy Gordon will moderate. TPC hosts the online event starting at 3:00 pm. Register and watch here.
How is the pandemic affecting one big US city? On Thursday at Noon, the guest on TPC’s The Prescription will be San Francisco Treasurer José Cisneros. He’ll discuss how the pandemic is affecting the city and its residents and what policymakers can do to help. Register here.
The IRS still is processing a backlog of tax returns. As of November 20 the IRS had processed 162.4 million out of 168.6 million tax returns it received this year. But it still has four million outstanding. By this time last year the IRS had processed nearly all of the paper returns it had received. IRS Commissioner Charles Rettig told the House Ways and Means Oversight Subcommittee that the pandemic is responsible for the delay: “Our employees went through the same exact thing as every other American during COVID with respect to health and safety concerns.
IRS seeks volunteers for VITA and TCE programs. The agency invites people to learn to volunteer to help prepare taxes free of charge through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs. For additional information and next steps, submit an inquiry using the VITA/TCE Volunteer and Partner Sign Up tool. VITA/TCE programs were shut down this year due to the pandemic.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
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