Here's a look at recent tax-related happenings on the Hill, including the Senate hoping to hold a vote this week on a budget resolution.
Lately on the Hill
Senate Accelerates Its Work on a Budget Resolution After House Prodding
Congress returned to Washington last week, refocusing on budget reconciliation. Republican leadership in the House of Representatives began the week by releasing a joint statement urging their Senate counterparts to act more expeditiously. It has been over a month since the House passed its budget resolution including $4.5 trillion in tax cuts coupled with $2 trillion in spending reductions.
“We took the first step to accomplish that by passing a budget resolution weeks ago,” the statement reads, “and we look forward to the Senate joining us in this commitment to ensure we enact President Trump’s full agenda as quickly as possible. The American people gave us a mandate and we must act on it. We encourage our Senate colleagues to take up the House budget resolution when they return to Washington.”
Senate Majority Leader John Thune (R-SD) accelerated the time frame the Senate would vote on a budget resolution, hoping to hold a vote this week. The effort would provide time for the House and Senate to reconcile differences between their resolutions. Identical resolutions must be passed by both chambers, and they hope to do so before their next recess beginning April 11.
CBO Estimates Debt & Deficit Effects of a Permanent TCJA
The Senate is moving toward the one bill approach that House Republicans have laid out, including tax legislation along with defense and energy measures. Different from the House approach, however, Senate leadership is still tinkering with the idea of permanently extending the Tax Cuts and Jobs Act of 2017 (TCJA), likely requiring the use of the current policy baseline to effectively estimate a zero cost to do so.
Rep. David Schweikert (R-AZ) has been opposed to the permanent extension of the TCJA due to its cost and requested that the Congressional Budget Office (CBO) analyze the impact of doing so on the deficit and debt.
The CBO responded to Schweikert’s request, estimating the deficit to be 12.3% of gross domestic product (GDP) in 2054, 3.8% higher than the CBO’s estimate under current law (where the TCJA would expire at the end of 2025). The debt in 2054 is estimated to equal 214% of GDP, 47% higher than the current law estimate. When factoring in rising interest rates of the same period, the debt grows even larger to 250% for GDP in 2054.
The “Big Six” Meet on Tax Cuts & Time Frame
Secretary of the Treasury Scott Bessent convened a meeting last week monikered the “Big Six” with congressional leaders. The meeting included White House National Economic Council Director Kevin Hassett, Thune, House Speaker Mike Johnson (R-LA), Senate Finance Committee Chair Mike Crapo (R-ID), and House Ways and Means Committee Chair Jason Smith (R-MO).
According to a press release issued by the U.S. Department of the Treasury, “The group discussed the importance of permanently extending the Trump Tax Cuts to prevent the largest tax hike in history on American workers, families and small businesses. Today’s productive meeting gives me confidence that a swift timeframe is achievable.”
CBO Estimates Extraordinary Measures Will Run Out Late Summer, Early Fall
A concurrent budget resolution by Easter and a budget reconciliation bill by Memorial Day is an ambitious timeline partially fueled by the looming debt ceiling on government borrowing. The nation hit the ceiling in early January but has not been required to borrow additional funds through use of so-called “extraordinary measures” employed by Treasury. Originally estimated to run out earlier this summer, the CBO has estimated that these measures will run out sometime in August or September.
The extended time frame may give congressional Republicans some wiggle room if a deal cannot be reached by the end of May. A $4 trillion increase in the debt limit was included in the House’s budget resolution.
Senate Passes Resolution Overturning Crypto Broker Rule
The Senate voted to overturn a midnight rule issued in the final days of the Biden administration defining decentralized cryptocurrency exchanges as brokers subject to reporting requirements. The bipartisan 70 to 28 vote advances the measure to the president for signature.
Auto Tariffs
On March 26, 2025, President Donald Trump introduced a proclamation imposing a 25% tariff on automobiles and automobile parts. According to a fact sheet offered by the White House, the tariff applies to imports of passenger vehicles and light trucks in addition to automobile parts including engines, transmissions, powertrain parts, and electrical components. The tariff will be effective on or after April 3, 2025 for autos, and no later than May 3, 2025 for auto parts.
The tariff applies to autos imported under the United States-Mexico-Canada Agreement (USMCA) to the extent of their non-U.S. content while USMCA auto parts will not be subject to the tariff until the Secretary of Commerce establishes a process to apply them based on their non-U.S. content.
Republicans Hope to Expand Their Majority in the House & Preserve Stefanik’s Seat
Florida is holding a special election today to fill vacated seats in the House. Jimmy Patronis (R) faces Gay Valimont (D) to fill Trump’s original nominee for Attorney General Matt Gaetz’s seat in Congressional District 1. Voters in Congressional District 6 will choose between Randy Fine (R) and Josh Weil (D) to fill the seat of Michael Waltz, who now serves as the president’s national security advisor.
Republicans hope to retain the seats to provide a little breathing room to the tight majority they now hold. Also, it was announced that Elise Stefanik’s (R-NY) nomination to be the U.S. ambassador to the United Nations has been pulled, in further effort to preserve the margin Republicans have over Democrats.
Unfair Tax Prevention Act Reintroduced
Rep. Ron Estes (R-KS) reintroduced H.R. 2423, the Unfair Tax Prevention Act, along with every Republican who sits on the House Ways and Means Committee.
According to a press release, the act is to “discourage foreign countries from attacking U.S. jobs and tax revenues through the Organization for Economic Co-operation and Development (OECD)’s Pillar 2 so-called Under Taxed Profit Rule (UTPR) surtax. The bill ensures that if a country moves forward with a UTPR surtax on American workers and businesses, the United States will impose a reciprocal tax measure that will apply as long as the foreign country's unfair tax remains in place.”
The Judicial Report
AFGE v. U.S. Office of Personnel Management, No. 25-1677
In a two-to-one vote, a panel of judges in the Ninth Circuit Court of Appeals denied the government’s motion to stay a preliminary injunction issued by a district court. The March 27 ruling upholds the lower court’s decision that required several government agencies—including Treasury—to reinstate probationary employees that had been terminated.
The ruling states, “Appellants have demonstrated neither that they are sufficiently likely to succeed on the merits of this appeal nor that they will suffer irreparable harm from complying with the preliminary injunction.”
Maryland v. USDA, et al., No. 1:25-cv-00748-JKB
The government filed a required status report outlining steps it has taken to comply with the court for the District of Maryland’s March 18, 2025 ruling. The court granted a temporary restraining order, staying the terminations of employees from Treasury and 17 other governmental agencies.
According to the report, of the 7,611 affected employees in Treasury, 7,560 had been reinstated with 51% of them declining reinstatement or requested to resign. The report also states Treasury is finalizing plans pursuant to the president’s executive order, “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative,” which “will require separations of substantial numbers of employees through reductions in force.”
From the Treasury & IRS
Senate Confirms Treasury Deputy Secretary
Last week, the Senate voted to confirm Michael Faulkender as Treasury deputy secretary. Faulkender had been serving as an advisor to Bessent.
Executive Order Implements Mandatory Electronic Payments to & From Treasury
Trump has instructed executive departments—including Treasury—via executive order to cease issuing paper checks for disbursements including tax refunds by September 30, 2025. Furthermore, payments made to the government will need to be done electronically when permissible.
According to the accompanying fact sheet to the order, a public awareness campaign will be launched and certain “exceptions will be made for people without banking or electronic payment access, certain emergency payments, certain law enforcement activities, and other special cases qualifying for an exception under the Order or other existing law.”
Report Details Work Done on Advance Pricing Agreements in 2024
The IRS issued Announcement 2025-13 and a report concerning advance pricing agreements (APAs) for the 2024 calendar year under the Advance Pricing and Mutual Agreement Program. The document also provides a model APA. A total of 169 APA applications were filed in 2024, a slight increase over 2023. Executed APAs were down, however, from more than 150 in 2023 to 142 in 2024.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.