Congress Extends Funding Deadline; Tax Reform Proposals Released

Trusted Insights for What’s Ahead^®

It was a busy week in Congress on budgetary issues. On Thursday evening, Congress passed a continuing resolution to prevent an imminent government shutdown that would otherwise have occurred on January 20. The Chairs of the Senate Finance Committee and House Committee on Ways and Means also reached agreement on a three-year bipartisan framework to increase the Child Tax Credit and business deductions for research and development, capital expenses, and interest. In a bipartisan vote, the House Budget Committee approved a bill establishing a fiscal commission to make recommendations on both mandatory and discretionary spending that Congress would consider on an expedited basis.

• The continuing resolution will keep the Federal government open until March 1 and March 8. Congress must enact a series of appropriations bills before each deadline or face the prospect of a shutdown.
• Congress continues to work on the specific allocations of the topline numbers that Congressional leaders agreed to earlier this month and on the President’s supplemental funding request for Ukraine, Israel, Taiwan, and the border.
• These negotiations proceed in a deteriorating fiscal environment, with the Federal budget deficit rising to $510 billion for the final quarter of calendar year 2023 and the total US national debt topping $34 trillion.
• The bill establishing a fiscal commission is broadly consistent with recommendations CED has long supported.