Tax & Financial Services Week Ahead

President Biden appeared optimistic about reaching a deal and has set this week as another unofficial deadline to reach agreement with lawmakers like Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), who continue engaging with the White House and other congressional leaders. 

Sinema, for instance, spoke last week with House Ways and Means Committee Chair Richard Neal (D-MA) about the tax components of the deal. Sinema has reportedly agreed to “each of President Biden’s four proposed revenue categories—international, domestic corporate, high net worth individuals and tax enforcement—providing sufficient revenue to fully pay for a budget reconciliation package in the range currently being discussed.” Through their discussion, it became clear, according to Neal’s office, that Neal and Sinema are “in full agreement on the policy achievement, and she’s in on renewables, she’s in on the issue of child credit and she’s in on family medical leave.” Disagreement remains, however, on paid leave, Medicare expansion, prescription drug pricing and climate. 

Manchin has also continued discussions, meeting over the weekend with President Biden in Delaware. 

On the Sunday news shows, Speaker Nancy Pelosi (D-CA) signaled that international taxes, the “billionaires tax” and Internal Revenue Service enforcement could be part of the final package now that rate increases were off the table. Senate Finance Committee Chair Ron Wyden (D-OR) is also expected to unveil his mark-to-market proposal this week, which would tax the unrealized gains of wealthy taxpayers. 

Looking ahead, Pelosi suggested the Senate could release its proposal as early as today. She hopes for a deal on the Build Back Better Act and passage of the Infrastructure Investment and Jobs Act this week. However, details remain fluid as the package continues to be negotiated. 

On the Floor

The House will vote on two financial services bills: the Sovereign Debt Contract Capacity Act (H.R.4111), which would require the U.S. Executive Director at the International Monetary Fund to advocate that it provide technical assistance to members seeking to enhance their capacity to evaluate the legal and financial terms of sovereign debt contracts, and the Financial Exploitation Prevent Act (H.R.2265), which would postpone the payment date of certain securities in the case of the financial exploitation of certain adults. 

The Senate will vote on several District Judge nominees. 

In Committee

Senate Banking Committee

On Tuesday, the full committee will hold a confirmation hearing to consider the following nominees:

On Thursday, the full committee will hold a hearing entitled “New Era for Consumer Protection: The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress,” during which the following witnesses will testify: 

The CFPB issued its semi-annual report to Congress on Oct. 8, covering the period between Oct. 1, 2020 and March 31, 2021. Although Rohit Chopra will be testifying before the committee, he was not confirmed to lead the agency during that time. Regardless, he is likely to face questions about topics discussed in the report, such as the CFPB’s response to the COVID-19 pandemic and its effects on consumer credit, rules and orders adopted by the agency and consumer complaints, among other things. 

House Financial Services Committee

On Tuesday, the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets will hold a hearing entitled “China, Inc: Examining Risks to Investors and the U.S. Posed by Foreign Issuers in U.S. Markets,” during which the following witnesses will testify: 

In late September, the Securities and Exchange Commission (SEC) issued a warning to potential investors in Chinese companies listed on U.S. exchanges. In an alert, the SEC detailed the risks associated with investing in such companies, which include potentially being subject to Chinese law in the enforcement of contracts. Lawmakers are likely to explore this topic and others related to it. 

On Wednesday, the full committee will hold a hearing entitled “Bringing Consumer Protection Back: A Semi-Annual Review of the Consumer Financial Protection Bureau,” during which the following witnesses will testify: 

Chopra is expected to face similar questions to those he faced in the Senate Banking Committee. 

Senate Finance Committee

On Tuesday, the full committee will hold a confirmation hearing to consider the following nominees: 

House Ways and Means Committee

The committee has no activity scheduled this week.

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Tax and Finance Rewind

In case you missed it…

• In response to the bank information reporting requirement proposal being advanced by Democrats, Senate Finance Committee Ranking Member Mike Crapo (R-ID) introduced the Prohibiting IRS Financial Surveillance Act, which would prevent the IRS from implementing the proposal.
• The U.S. and five European counties—Austria, France, Italy, Spain and the United Kingdom—on digital taxes, seemingly averting a potential trade war. Under the deal, the countries will remove their digital services taxes when the new broader international framework goes into effect and offer a credit to companies for digital tax they may have paid. 
• The Treasury Department announced on Friday the U.S. had a $2.77 trillion deficit for the fiscal year—the second highest on record. The previous fiscal year saw the largest annual deficit at $3.1 trillion. 

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UPCOMING ACTIVITY