This week, the Senate Finance Committee (SFC) unveiled their version of a sweeping tax package, the cornerstone of Republicans’ reconciliation bill.
The Senate framework delivers on promises to extend Tax Cuts and Jobs Act (TCJA) expiring provisions, renews three key business measures that were modified in 2022 and 2023, implements several of President Trump’s campaign pledges, and includes other longstanding Republican priorities.
The Senate’s proposal deviates from the House-passed bill in several respects, including the use of a “current policy baseline,” restructuring the phase-out timelines of energy initiatives, and making many extensions and new provisions permanent.
At the time of publication, there appears to be insufficient support to pass the bill in its current form. Negotiations are ongoing both within the Senate and between chambers. Senate Majority Leader John Thune (R-SD) and SFC Chair Mike Crapo (R-ID) are actively negotiating to craft a bill that can pass both the House and the Senate before Republicans’ self-imposed July 4 deadline.
Below we highlight the most relevant provisions within the SFC’s tax section.
Tax Provisions
Permanently extending key business tax provisions was a top priority for several Senate Republicans, including Thune and Crapo. Accordingly, the Senate proposal would make the following provisions permanent, breaking from the House-passed bill, which would only extend them through 2029:
- Bonus Depreciation: The TJCA provided taxpayers with 100% additional first-year depreciation (bonus depreciation) expensing for qualified property through 2022, after which the benefit began to phase down by 20% each year. The Senate proposal would permanently restore 100% expensing for eligible property placed in service as of January 20, 2025.
- Research & Experimental (R&E) Expenditures (Sec. 174): This provision would allow immediate expensing of domestic R&E expenditures, reversing the current requirement to capitalize and amortize them over five years. Small business taxpayers (those with average annual gross receipts of $31 million or less) would have the option to apply the change retroactively back to 2022 through amended returns. All taxpayers who capitalized R&E expenditures from 2022 through 2024 would have the option of accelerating their remaining deductions over a one- or two-year period. No change was proposed for the treatment of foreign R&E expenditures, which must be capitalized and amortized over 15 years.
- Business Interest Expense Limitation (Section 163(j)): Beginning in 2025, businesses would calculate their adjusted taxable income (ATI) based on earnings before interest, taxes, depreciation, and amortization (EBITDA), rather than the more restrictive earnings before interest and tax (EBIT). Businesses have been subject to the stricter threshold since 2022. The Senate proposal also includes a provision that clarifies the Sec. 163(j) limitation should be calculated prior to any other provision in which interest is deducted or charged to a capital account. This change targets Sec. 163(j) “workaround” capitalization strategies that have popped up in recent years. The proposal also excludes certain foreign income from the ATI calculation.
The Senate made permanent changes to several other business provisions, including:
- Section 179 Expensing of Certain Depreciable Assets: The Senate and House both proposed an expansion of Sec. 179 expensing. Under both versions, the maximum amount a taxpayer can expense would increase from $1.25 million to $2.5 million. This benefit would be reduced to the extent such property placed in service during the year exceeds $4 million, an increase from the current $3.1 million. The $2.5 million and $4 million amounts would be adjusted for inflation after 2025.
- Opportunity Zones (OZs): Unlike the House proposal, the Senate proposal would establish a permanent OZ policy, creating rolling 10-year OZ designations beginning in 2027. The program would retain the following current OZ benefits:
- Temporary deferral of capital gain reinvested into an OZ
- A 10% or 15% reduction in gain for property held for five or seven years, respectively
- A permanent exclusion of new gains for property held for at least 10 years
In addition, the provision would narrow the definition of low-income community, provide taxpayers with incremental reductions in their gain after one year and create “qualified rural opportunity funds” that would provide triple the step-up basis. This varies from the House proposal, which would create one new round of OZs running from 2027 through 2033.
- Low-Income Housing Tax Credit (LIHTC): The state housing credit ceiling for the LIHTC would be permanently increased by 12% under the Senate proposal. This is similar to the House proposal, which had a slightly different ceiling increase and a limited timeline. In addition, the bond financing threshold would be lowered to 25% beginning in 2026, allowing more projects to qualify for tax-exempt bond financing.
- New Markets Tax Credit: The Senate bill would permanently extend the New Markets Tax Credit, which is set to expire at the end of 2025.
- Qualified Small Business Stock (QSBS, Section 1202) Expansion: Currently, QSBS owners are eligible for partial or full gain exclusion, depending on acquisition date, upon the sale of stock held for more than five years. Under the Senate bill, the QSBS gain exclusion would be expanded by providing a tiered structure.
Years QSBS Held |
Gain Excluded |
3+ |
50% |
4+ |
75% |
5+ |
100% |
Stock acquired after the enactment date would be eligible for the new treatment. The provision would also increase the exclusion cap from $10 million to $15 million and the aggregate gross asset limit from $50 million to $75 million, indexed for inflation beginning in 2027.
- Compensation in Excess of $1 Million: Compensation payments in excess of $1 million to certain employees of publicly traded companies are disallowed; under both the Senate and House proposals, these limitations would be expanded to include employees of related party entities that are not public companies.
- Employer-Operated Eating Facilities: The disallowance of a deduction for expenses for operating an employer-operated eating facilities — and the expense for food and beverages associated with the facility which is effective beginning in 2026 — would not apply to food and beverage expenses. This includes the use of facilities, which are sold by the taxpayer for adequate and full consideration.
- One Percent Floor on Corporate Charitable Contributions: The Senate included the House proposal to further limit corporate charitable contribution deductions by instituting a 1% floor. Corporations would be able to claim a charitable contribution only to the extent it exceeds 1% of taxable income (the 1% floor) and does not exceed 10% of taxable income. Amounts disallowed under the 1% floor could only be carried forward in years in which the corporation's contributions exceed the 10% limit; otherwise, the first 1% of contributions would be permanently disallowed.
The Senate also followed the House in providing a temporary deduction aimed at increasing domestic manufacturing capacity:
- Bonus Depreciation for Qualified Production Property: The Senate’s proposal generally aligns with the House bill in creating a new Sec. 168(n) that would provide a 100% first-year depreciation deduction for qualified production property (QPP). QPP is depreciable real property that meets certain criteria used in manufacturing, producing or refining tangible personal property. There is a special acquisition rule that would allow taxpayers that repurpose existing property to qualify for the deduction. Property must be purchased between January 20, 2025, and the end of 2028 and placed in service after the date of enactment but before 2031.
The House provision regarding changes to the Employee Retention Credit (ERC) was placed on a list of “fatal flaws” by the Senate parliamentarian, meaning it could have jeopardized the reconciliation bill’s privileged status in the Senate. The Senate included their own ERC provisions:
- Early Termination of ERC: Credits filed for the third and fourth quarters (Q3 and Q4) of 2021 that have not been allowed or paid prior to enactment would only be eligible for payment if they were filed on or before January 31, 2024, under the Senate’s text. The IRS currently has a moratorium on processing these claims.
- ERC Enforcement: The assessment time period for Q3 and Q4 2021 claims would be extended to six years after the date the claim is made; accordingly, the time for disallowing deductions for wages used to calculate the claim would also be expanded to the same six years.
The Senate excluded two notable provisions backed by the House: the increased gross receipts thresholds for manufacturers and the limitation on amortization for sports franchises.
The Senate also made a few meaningful changes to provisions that would impact pass-through entities and their owners, including:
- Qualified Business Income (QBI, Section 199A) Deduction: The Senate text includes a permanent extension of the 20% QBI deduction, increases the deduction limit phase-in range by 50%, and creates an enhanced baseline deduction of $400 for small business owners. This varies significantly from the House-passed bill, which would increase the deduction to 23% and change the phase-out formula.
- Pass-Through Entity Tax (PTET) Deduction: Under the Senate proposal, pass-through entities would see a considerable change in their ability to deduct state and local income taxes. Currently, these entities may elect to pay tax on behalf of their owners and take an entity-level deduction in states with a PTET regime. The Senate’s bill would end these entity-level deductions and require pass-through entities to separately state PTET payments to owners. The owners would then be able to claim the greater of (1) all PTET payments up to $40,000 or (2) 50% of all PTET payments on their Schedule A itemized deductions. While this proposal corrects a provision included in the House bill that effectively targeted PTET deductions for certain specified service trades or businesses (SSTBs), it does not resolve the inequity of full SALT deductions allowed to C Corporation taxpayers, but not to businesses operating in a pass-through entity.
- Excess Business Loss (EBL) Limitation: The Sec. 461(l) EBL limitation, currently set to expire at the end of 2028, would be made permanent under the Senate’s proposal. More importantly, it would modify the limitation to subject previously disallowed excess business losses to retesting in the subsequent year.
The Senate maintained the House’s new Section 899 retaliatory taxes but chose to delay the implementation date. This change comes amid growing concern that the so-called “revenge tax” will reduce foreign investments in the U.S. Postponing the effective date of the provision allows the Trump administration more time to use the potential tax as leverage in global tax negotiations.
- Section 899 Retaliatory Tax: This provision would levy higher tax rates on the U.S. income of foreign individuals and companies based in countries that the U.S. deems to impose any “unfair foreign tax.” The definition of unfair foreign tax is broad — encompassing any undertaxed profits rule (UTPR), digital service tax (DST), diverted profits tax, and any “tax enacted with a public or stated purpose indicating the tax will be economically borne, directly or indirectly, disproportionately by United States persons.”
Affected taxpayers would face a 5%-point increase in tax each year the “unfair foreign tax” is in effect, with a cap of a total 15%-point increase, less than the House’s 20% cap. The House-passed bill would apply to taxable years beginning 90 days after enactment for unfair foreign taxes in place for at least 180 days. The Senate’s proposal would not take effect until 2027. This timeline adjustment was intended to provide the Trump administration more time to use the provision as a negotiating tool with countries that would be subject to the increased tax rates.
The Senate took a different approach from the House in extending three central international tax provisions: global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), and base erosion and anti-abuse tax (BEAT).
Current Rate |
House-Passed Proposal |
Senate Proposal |
If TCJA Expires |
|
GILTI |
50% |
49.2% |
40% |
37.5% |
FDII |
37.5% |
36.5% |
33.34% |
21.875% |
BEAT |
10% |
10.1% |
14% |
12.5% |
Under the Senate proposal, GILTI, FDII and BEAT would all have an effective tax rate of 14%.
The proposal would also rename GILTI to net CFC tested income (NCTI) and FDII to foreign-derived deduction eligible income (FDDEI).
The Senate proposal would make numerous other changes to international tax provisions, including:
- Eliminate the qualified business asset investment (QBAI) reduction, which would generally increase GILTI and FDII tax bases and would, in turn, increase both GILTI liability and FDII deductions
- Limit the allocation and apportionment of expenses to GILTI to Sec. 250(b)(2) deduction and expenses directly allocable to GILTI income; any other expenses would be allocated to U.S. source income
- Reduce the base erosion threshold safe harbor from 3% to 2% and treat certain capitalized interest expense as a base erosion payment
- Exempt base-erosion payments made to high-tax jurisdictions with an effective tax rate of greater than 18.9%
- Make the CFC look-through rule permanent
- Reinstate Sec. 958(b)(4) to preclude downward attribution from a foreign person to a U.S. person in determining CFC status (a change that will be welcomed by the international tax community)
- Treat income from a U.S. person from the sale of inventory produced in the U.S. and attributable to an office or other fixed place of business outside the U.S. as foreign source, up to 50% of the total taxable income from such sale, for purposes of calculating the FTC limitation
- Exclude subpart F and GILTI, along with any associated gross up under Sec. 78, from the calculation of ATI for the business interest expense limitation calculation
Addressing the expiring individual TCJA tax provisions is the largest and most expensive part of the reconciliation package. Senate Republicans have long advocated for the permanent extension of these provisions, a key reason they are attempting to use a “current policy baseline” in the massive tax and spending package.
The following chart compares the expiring individual TCJA provisions that the Senate’s bill would permanently extend to the House-passed bill provision.
Provision |
Senate Proposal |
House Proposal |
Individual Tax Rates and Brackets |
Current rates and brackets made permanent (10%, 12%, 22%, 24%, 32%, 35%, 37%) |
Same Treatment |
Standard Deduction |
Increases standard deduction by $1,000 ($2,000 married filing jointly or MFJ) to $16,000 ($32,000 MFJ) for 2025, indexed for inflation thereafter |
Same treatment but the increase of $1,000 ($2,000 MFJ) was only in place from 2025 through 2029 |
Itemized Deductions |
Continues itemized deduction limitations, including miscellaneous itemized deductions other than educator expenses, casualty losses, moving expenses, mortgage interest, etc. |
Same treatment but no carve out for educator expenses |
SALT Cap* |
Currently set to a placeholder of $10,000* |
Increased to $40,000 for taxpayers making $500,000 or less as of 2025 |
Personal Exemptions |
Remains at $0 |
Same treatment |
Alternative Minimum Tax (AMT) |
Extends increased AMT exemption and phase-out thresholds, but adjusts to 2018 levels that are subsequently indexed for inflation |
Same treatment |
Child Tax Credit |
Extends and increases the credit to $2,200 and indexes for inflation |
Makes current $2,000 permanent and indexes for inflation. Provides temporary $500 boost from 2025 through 2029 |
Child and Dependent Care Credit |
Increases the credit rate and expands income thresholds |
No provision |
*More detail on these items below
The Ongoing SALT Issue
One of the most significant issues facing Republican policymakers is determining the treatment of the state and local tax (SALT) deduction for individual taxpayers. After careful negotiations, House Republicans struck a deal for an increase to $40,000, subject to phase-out once taxpayers’ income exceeds $500,000, with scheduled increases in subsequent years.
House Republicans have a handful of members from purple districts within blue states, whose constituents are subject to higher state taxes. These policymakers, members of the bipartisan SALT caucus, are currently holding out for the previously negotiated deal.
Senate Republicans are not from blue states with high tax rates, so this is not an important issue for them; however, including the House-negotiated $40,000 limit would meaningfully increase the cost of the bill, something several senators are concerned about. The Senate bill placed a $10,000 limit on SALT deductions in their bill, which represents a continuation of current policy.
SALT is one of the major roadblocks that Republicans will need to address in the coming days.
Many of Trump’s campaign pledges are included in the Senate’s version of the bill, though only on a temporary basis and with a few notable diversions from the House package:
- No Tax on Tips: The Senate’s package provided a deduction for qualified tips received by a taxpayer in an occupation that customarily receives tips, up to $25,000 per year for tax years 2025 through 2028. The deduction begins to phase-out once a taxpayer’s income exceeds $150,000 ($300,000 married filing jointly). The $25,000 limitation was not included in the House bill.
- No Tax on Overtime: Qualified overtime income would be deductible, up to $12,500 ($25,000 married filing jointly), under the Senate’s proposal. The provision would be in effect from 2025 through 2028 and would begin to phase-out once a taxpayer’s income exceeds $150,000 ($300,000 married filing jointly). The $12,500 limitation was not included in the House bill.
- Additional Deduction for Seniors: From 2025 through 2028, taxpayers aged 65 and older would be eligible to receive a deduction of $6,000 per taxpayer. The benefit would begin to phase-out once a taxpayer’s income exceeds $75,000 ($150,000 married filing jointly). This benefit is an increase over the House’s proposal of $4,000.
- No Tax on Car Loan Interest: Taxpayers who purchase a vehicle assembled in the U.S. would be able to deduct the associated car loan interest from 2025 through 2028. The deduction is capped at $10,000 and begins to phase-out once a taxpayer's income exceeds $100,000 ($200,000 married filing jointly).
There are a number of notable changes to other individual tax provisions within the Senate’s framework, including:
- Limitation on Itemized Deductions: Prior to the TCJA’s enactment, itemized deductions were limited for high-income earners via the Peas limitation; since 2017, there has been no itemized deduction limitation in place. The Senate proposal includes a new itemized deduction limit that applies to taxpayers in the highest bracket and effectively caps the benefit of each dollar of otherwise allowable deductions at $0.35.
- Charitable Contribution Deduction for Non-Itemizers: The Senate plan would create a permanent $1,000 ($2,000 married filing jointly) above-the-line deduction for charitable contributions for non-itemizers. This proposal far exceeds the House’s plan for a temporary $150 ($300 married filing jointly) deduction.
- 0.5% Floor on Charitable Contributions for Itemizers: Beginning in 2026, taxpayers who elect to itemize deductions would face a 0.5% floor on charitable contributions under the Senate plan.
- Trump Accounts: The Senate took the same approach as the House in establishing Trump accounts, tax-exempt accounts for children. Contributions are limited to $5,000 per year, indexed for inflation, until the beneficiary reaches the age of 18, in which case no further contributions can be made. There are limitations on distributions depending on the age of the beneficiary. Earnings grow tax-free, and distributions for qualifying expenses are taxed at capital gains rates. There is a pilot program whereby the government will contribute $1,000 for children born between 2024 and 2029 with a Trump account.
- Employer-Provided Educational Assistance: Employers would be able to continue to reimburse employees up to $5,250 tax-free for payments of student loans or reimbursements for educational assistance of such amount. This is a permanent change. The $5,250 limit would be indexed for inflation beginning in 2026.
- Other Provisions: The Senate’s bill includes numerous additional provisions that would impact individual taxpayers, including enhancements to ABLE accounts, a change in the definition of qualified higher education expenses and the inclusion of post-secondary credentialing for 529 account distributions, and enhancements of the tax-free employer-provided dependent care expense rules. Additional provisions include the creation of a dollar-for-dollar tax credit for contributions to scholarship-granting organizations, and changes to the adoption credit to include a refundability component, among others.
The Senate proposal to extend and enhance the estate and gift tax exemption amount mirrors the House’s proposal. If enacted, the lifetime exemption would increase to $15 million for single filers ($30 million for married filing jointly) in 2026 and would be indexed for inflation thereafter. Currently, the 2025 exemption amount is $13.99 million, so the proposed exemption a modest increase.
The tax brackets for trusts and estates would also be permanently extended.
The Senate chose not to target certain tax-exempt organizations as heavily as the House:
- Expansion of Excise Tax on Investment Income of Certain Private Colleges and Universities: The Senate bill aims to increase the top excise tax rate from a flat 1.4% to a graduated structure with a top rate of 8% for applicable educational institutions. Applicable eligible institutions are those that meet certain criteria including having at least 500 tuition paying students and a student-adjusted endowment of $500,000 or more. While this is a substantial increase, it is much lower than the House bill’s proposal.
Student Adjusted Endowment |
House Excise Tax Rate |
Senate Excise Tax Rate |
$500,000 – $749,999 |
1.4% |
1.4% |
$750,000 – $1,249,999 |
7% |
4% |
$1,250,000 – $1,999,999 |
14% |
|
$2,000,000 |
21% |
8% |
The Senate did not propose any increase on the excise tax on net investment income of private foundations.
Amid pressure from several Republican senators, the upper chamber adopted a more strategic approach to scaling back Inflation Reduction Act (IRA) credits.
In the House, Speaker Mike Johnson (R-LA) ultimately yielded to hardline conservatives’ demands for a nearly complete repeal of the IRA. However, Senate Republicans have opted to make substantial revisions to the reconciliation bill’s energy provisions.
Key policymakers have voiced concerns that scaling back the IRA too abruptly could undermine domestic energy production and penalize companies that have already invested in IRA projects.
The chart below compares the House and Senate proposals on the treatment of IRA business credits.
Code Section |
Credit |
House Proposed |
Senatae Proposed |
48E |
Clean Energy Investment Credit |
Phases out for projects other than those that begin within 60 days of enactment and are placed in service by 12/31/28. Transferability is maintained during that period. |
Phases out for wind and solar facilities that begin construction from 2026 through 2027. All other qualified technologies retain full credit amount through 2032 and will begin to phase out for facilities that begin construction from 2033 – 2035. |
45Y |
Clean Energy Production Credit |
||
45U |
Zero-Emission Nuclear Power Production Credit |
Terminates after 2031. Transferability maintained through 2031. |
Creates some restrictions based on foreign involvement. Maintains credit and transferability through 2032. |
45Q |
Carbon Sequestration Credit |
Ends transferability for facilities that commence construction two years after enactment. |
Creates restrictions related to foreign entities but maintains credit and transferability for facilities that begin construction before 2033. |
45X |
Advanced Manufacturing Production Credit |
Transferability expires for electricity, components and fuel produced after 2027. |
Phases out depending on the component with wind phasing out first, after 2027, and critical minerals phasing out between 2031 and 2033. |
45Z |
Clean Fuel Production Credit |
Extends credit through 2031 and penalizes fuel produced from components outside the U.S. |
|
45W |
Commercial Clean Vehicles Credit |
Eliminates credits for new projects after 2025. |
Terminates for vehicles acquired over 180 days after enactment. |
45V |
Clean Hydrogen Credit |
Terminates for projects that begin construction after 2025. |
|
45L |
New Energy Efficient Homes Credit |
Terminates for homes acquired more than 12 months after enactment. |
|
30C |
EV Charging Station Credit |
Terminates for property placed in service more than 12 months after enactment. |
There were a few other changes of note to business energy provisions, including:
- Advanced Manufacturing Investment Credit: The credit rate would increase from 25% to 30% beginning in 2026.
- New Energy Efficient Commercial Buildings Deduction (Section 179D): This tax benefit would terminate for property constructed 12 months after enactment. This provision was previously enhanced under the IRA and benefited A&E firms that designed buildings for tax-exempt and government entities.
- Cost Recovery for Qualified Clean Energy Facilities, Property and Technology: The Senate proposed a repeal of five-year cost recovery period for energy property defined in 45Y(b)(1)(A) and 48E(b)(2) and (c)(2) placed in service after enactment. IRC Section (168(e)(3)(B)) currently allows the aforementioned property to be depreciated on a five-year schedule.
Finally, the Senate’s framework makes drastic changes to individual energy provisions, terminating the following credits:
Code Section |
Credit |
Termination Date |
25E |
Previously Owned Clean Vehicle Credit |
Vehicles acquired more than 90 days after enactment. |
30D |
Clean Vehicle Credit |
Vehicles acquired more than 180 days after enactment. |
25C |
Energy Efficient Home Improvement Property |
Property placed in service more than 180 days after enactment. |
25D |
Residential Clean Energy Credit |
Expenditures made more than 180 days after enactment. |
- Debt Limit: The Senate’s bill would raise the debt limit by $5 trillion, exceeding the $4 trillion provided by the House bill. The larger increase is important to senators as it would likely provide enough borrowing capacity to get through the 2026 midterm elections.
- IRS Direct File Program: The proposal directs the Treasury Secretary to terminate the IRS direct file program within 30 days of enactment, consistent with the House-passed bill.
- Forms 1099-K and 1099-MISC/NEC: The de minimis reporting exemption for third-party settlement organizations (reported on Form 1099-K) would revert from $600 back to a level of $20,000 and 200 transactions, effective in 2025. The reporting threshold for payments (other than dividends, interest, and royalties) made by persons engaged in a trade or business (reported on Forms 1099-MISC/NEC) would rise from $600 to $2,000 for payments made after 2025.
The House proposal to implement an annual $250 fee for electric vehicles and a $100 fee for hybrid vehicles was notably absent from the Senate’s proposal.
Other Senate committees released relevant non-tax proposals, including:
- The Senate Judiciary Committee proposed the same legislative text that the House passed in relation to the Interstate Income Act of 1959 (often referred to as P.L. 86-272). The proposal would expand the protections of P.L. 86-272, which prohibits states from imposing net income tax on businesses when the only activity performed is “the solicitation of orders… for sales of tangible personal property.” If enacted, the term “solicitation of orders” would be defined as “any business activity that facilitates the solicitation of orders even if that activity may also serve some independently valuable business function apart from solicitation.” This expansion appears to effectively invalidate the Multistate Tax Commission’s (MTC’s) approach, which treats numerous common internet activities as outside the definition solicitation and the protections provided thereunder.
Senate Judiciary’s text notably did not include the House’s proposal that would require Congress to affirmatively approve major rules related to revenue. There was growing concern on Capitol Hill that the House provision, which was similar to the proposed REINS Act, may violate Senate reconciliation rules.
- The Senate Health, Education, Labor, and Pension Committee made some moderate changes to the higher education funding provisions in the House-passed bill. The Senate chose different limitations for graduate, professional student, and parent federal loans and elected not to propose limits on undergraduates. Rather than adopting the House’s risk-sharing plan for institutions of higher education, the Senate proposal would address the same issue by pulling federal student loan eligibility from schools that do not meet an earnings test. The Senate also chose to break with the House in their treatment of Pell grants, particularly for part-time students. The proposed text retains the House’s proposed repeal of student loan forgiveness and consolidation of student loan repayment plan options.
- The Senate Banking Committee, in alignment with the House Financial Services Committee, seeks to shutter the Public Company Accounting Oversight Board (PCAOB) and transfer operations and responsibilities to the Securities and Exchange Commission (SEC). The PCAOB was created in 2002, partially in response to the collapse of Enron, to oversee the audits of public companies.
Next Steps in the Reconciliation Process
As we discussed in Tracking Tax Reform: Senate Finance Committee Releases Reconciliation Bill Text, there are still several steps that must occur before the reconciliation bill can be signed into law, including:
- Senate Budget Committee Compilation: The Senate Budget Committee will compile each committee’s legislative text into a single bill. The committee will also assemble a list of provisions it believes may violate the Senate’s Byrd Rule.
- Byrd Bath: The Senate parliamentarian, a nonpartisan advisor, will make determinations on potential Byrd Rule violations. Any provisions that do not comply will need to be altered or stripped for the bill to retain its privileged status under the reconciliation rules.
- Vote-a-Rama: In the Senate, there are no limitations on amendments, which the minority party often uses to force the majority party on the record over politically difficult issues.
- Senate Vote: Once the amendment votes are complete, the Senate can vote on the package.
Senate Democrats are certain to challenge any provisions they believe could violate the Senate’s Byrd rule, including the use of a current policy baseline.
In order to meet the president’s desired timeline of completing the reconciliation bill by July 4, Thune is tentatively planning to put the package on the Senate floor by the middle of next week. Both chambers are out of session until Monday, June 23, and are scheduled to recess for the July 4 holiday beginning June 27; however, leadership could attempt to hold policymakers in Washington if the bill has not passed.
The reconciliation process is not complete, and none of the aforementioned provisions will go into effect until both the House and Senate pass identical versions of the bill and it is signed into law by the president.
Your Guide Forward
Cherry Bekaert’s Tax Policy team will continue to provide updates and insights on the latest tax policy developments.
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