LIVE COVERAGE: Ways and Means to conclude work on $3.5T package

The House Ways and Means Committee on Wednesday is holding its fourth and final day of the markup of its portions of Democrats’ $3.5 trillion social spending package.

Lawmakers are expected to vote to advance a large section of the bill that includes infrastructure financing tax preferences, renewable energy tax incentives, health-care provisions, tax credits for low- and middle-income families, and tax increases on high-income individuals and corporations.

Keep checking this page for updates on the markup, which starts at 9 a.m.

Committee adjourns after vote

4:59 p.m.

The Ways and Means Committee adjourned on Wednesday afternoon after voting to advance provisions that would raise taxes on wealthy individuals and corporations to help cover the cost of a $3.5 trillion spending bill.

In the 24-19 vote, Rep. Stephanie Murphy (D-Fla.) broke with Democrats to join all Republicans in voting against the measure. Murphy said she hopes changes can be made to the legislation so that she can support the measure later.

The vote caps a days-long markup of the committee’s portion of the multi-trillion dollar budget reconciliation package. Party leaders say the legislation will pave the way for funding for a number of Democratic-backed priorities, such as climate change, education and public housing.

The tax-writing panel’s portion of the bill included provisions to expand Medicare to cover dental, hearing and vision benefits, as well as 12 weeks of paid family and medical leave for workers.

The House Budget Committee will now take up the section approved by the Ways and Means Committee, along with portions crafted by other House committees.

Democrats are expected to move quickly on the legislation once the House returns from its August recess next week. House leadership is aiming to pass the package before the end of the month.

However, further changes to the legislation are expected, as Democrats strive to finalize a bill that can appeal to both moderates and progressives

— Aris Folley

Neal says he’s discussing tax-enforcement proposals with administration

2:16 p.m.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) said he’s been having discussions with the Biden administration over proposals to increase the amount of information third parties report to the IRS in an effort to strengthen tax enforcement.

“We’re in conversations with the administration on reporting proposals that target sophisticated tax avoidance and evasion without impacting middle-class and working Americans,” Neal said.

The administration has proposed providing the IRS with an additional $80 billion over 10 years so that the agency can strengthen enforcement against high-income individuals and corporations. The White House also called for increasing the amount of information that financial institutions report to the IRS about bank accounts.

The Ways and Means Committee’s legislation includes President Biden’s proposal on IRS funding, but does not include the proposal on bank-reporting requirements.

Neal said he received letters from Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig that advocate for the administration’s IRS funding and third-party reporting proposals.

Yellen said it’s important that any third-party reporting proposal from Congress be fairly broad, and that a broad proposal would not be used to target the middle class.

“As you consider specific policy choices in designing an information reporting regime, it is important to ensure that the reporting regime is sufficiently comprehensive, so that tax evaders are not able to structure financial accounts to avoid it,” she wrote. “But to be clear: a reporting regime that is broad-based will better assist the IRS in targeting enforcement priorities on the high-end who accrue income in opaque ways. Any suggestion that instead this reporting regime will be used to target enforcement efforts on ordinary Americans is wholly misguided.”

— Naomi Jagoda

Democrats reject Brady amendment on corporate tax rate

11:48 a.m.

The Ways and Means Committee rejected an amendment that would do away with Democrats’ legislative proposal to raise the corporate tax rate to 26.5 percent.

The Democratic-led panel voted down the amendment 25-18.  

Republicans argued for the corporate tax rate, which was lowered from 35 percent to 21 percent under Trump’s 2017 tax law, to remain the same, crediting the legislation for economic growth and warning a tax hike could hurt American workers.

Rep. Kevin Brady (R-Texas) claimed the proposed corporate tax rate hike could potentially lead to an “economic surrender to China, to Russia, Japan, to Europe.”

“Twenty-one percent is too low? Nonsense. There are — 24 of our competitors have lower than ours. Twenty-six and half percent takes us to worse than China’s. It’s one of the worst in the world. They are going to eat our lunch,” he said.

Democrats defended their proposed increase to the corporate tax rate, saying the legislation would ensure corporations pay their fair share in taxes.

Shortly before the vote, Ways and Means Committee Chairman Richard Neal (D-Mass.) said he thinks Brady’s amendment “has encapsulated quite accurately the difference between the two parties’ in our approach to opportunity.”

“There is broad acknowledgement in this room today as to what has happened to wealth concentration in America,” he said. “We can bicker about why it happened, but there is no denying it really did happen. Our attempt here is not to redistribute wealth, not to punish success, not to curb innovation, as much as it is simply to broaden opportunity.”

The amendment is the first of many Republicans are expected to introduce today as the panel is expected to conclude its markup process later on Wednesday.

— Aris Folley

Markup starts with debate over corporate tax rate

9:53 a.m. 

A proposal to raise the corporate tax rate to 26.5 percent took center stage as the markup began Wednesday.

The committee skipped opening remarks and instead heard arguments from members on both sides of the aisle over an amendment brought by Rep. Kevin Brady (R-Texas) that seeks to do away with the corporate tax rate hike.

Brady, the top Republican on the tax-writing panel, took aim at Democrats while introducing the amendment, dubbed Build Back in America not in China, which aims to keep the corporate tax rate at 21 percent.

“We are going to be the most competitive economy in the world, we’re not going to have the worst rates,” he said, arguing the current corporate tax rate, which was set by former President Trump’s 2017 tax-cut law, gave the nation an “opportunity to grow our economy.”

— Aris Folley