The Senate convened at 10:00 A.M. and is expected to spend today working on nominations, including confirmation of the nomination of Meredith A. Vacca to be United States District Judge for the Western District of New York and Confirmation of the nomination of Joseph Francis Saporito, Jr. to be United States District Judge for the Middle District of Pennsylvania. The Senate is also expected to consider a Motion to invoke cloture on the nomination of Dorothy Camille Shea to be Deputy Representative to the United Nations, and the Deputy Representative in the Security Council of the United Nations.
The Senate is expected to spend tomorrow working on tax legislation after, late on Monday, Senate Majority Leader Chuck Schumer (D-New York) filed cloture on the Tax Relief for American Families and Workers Act (HR 7024), a broad tax measure that passed the House 357-70 in January. The bipartisan bill was crafted by Congress’ top tax writers — House Ways and Means Committee Chair Jason Smith (R-Missouri) and Senate Finance Committee Chair Ron Wyden (D-Oregon). The legislation includes an expansion of the Child Tax Credit and key business provisions, including some favored by energy companies. Given Republican opposition to the bill in the Senate, mainly around the Child Tax Credit, it is likely to be a symbolic vote designed to put GOP members on the spot.
Among the business friendly provisions, the legislation would revise Code Sec. 174 and add a new Section 174A to allow businesses, both large and small, to immediately deduct the cost of their US-based research and experimental costs — but just through 2025. Currently, businesses must deduct those costs over a five-year period. The five-year deduction period went into effect at the start of 2022 under the Tax Cuts and Jobs Act. The legislation also proposes a revision to Code Sec. 163(j) that would allow businesses to apply the earnings before interest, taxes, depreciation, and amortization (EBITDA) computation method in determining business interest deductions through 2025. And the bill would revise Code Sec. 168(k) to allow for 100% bonus depreciation for certain property placed into service in 2023-2025. Finally, it would increase the limitation on depreciable business assets expensing under Code Sec. 179(b).
Of note, by expanding the Child Tax Credit, the bill will help 16 million kids from low-income families and lift 500,000 out of poverty. The bill will raise the cap on the Child Tax credit for low-income families, making them eligible for a full $2,000 CTC. The bill will also stop the longstanding discrimination against low-income families who have multiple kids. Today they’re often prohibited from claiming the full credit for each of their kids. Wyden-Smith will fix that. State-by-state data on the number of kids and families who stand to benefit is available here along with further analysis, and a demographic breakdown is available here.
