Congress will likely need more time after the Dec. 16 deadline. Expect a very short-term continuing resolution to keep the government open, likely until Dec. 23. Democrats say they’ll release a new funding plan this week but the GOP is unlikely to back it. Sen. Chris Van Hollen says Democrats would push for a continuing resolution to next October if there is no agreement soon on an omnibus spending bill that increases funding for both military and domestic spending. Some House Republicans are looking to sink a bill this year so they will have more control over spending decisions when they take the majority next month.
A debt limit extension is less likely this year: What will a delay mean? The New York Times reports the Democratic leaders to have “all but abandoned” efforts to raise the debt limit this year while they still have control of Congress. TPC’s Len Burman will join Howard Gleckman on TPC’s webcast, The Prescription, this Thursday at Noon to discuss the consequences of a debt limit showdown in 2023.
The Family Security Act 2.0 child allowance would help families with children, but taxes would increase for many single parents. TPC’s Nikhita Airi reviews new TPC estimates of major elements of Sen. Mitt Romney’s FSA 2.0. The plan would create a child allowance of up to $4,200 for children under age 6 and $3,000 for those ages 6 to 17. Although the child allowance would not be fully refundable, it would phase in more quickly than the current CTC. TPC estimates it would increase benefits for nearly 60 percent of families relative to the current law. But about one-third would pay higher taxes or receive fewer benefits, many headed by single parents.
Congress could save the day for more savers (not just the wealthy ones). TPC’s Tax Hound considers the choices Congress faces when it comes to retirement savings incentives. Most Americans do not save as much as they need for retirement but very high-income workers save more than enough. Will Congress miss a chance to end one gimmick–Roth conversions—that allow very wealthy account holders to accumulate more savings tax-free?
Utah Governor Spencer Cox calls for dependent exemption for fetuses. Included in $1 billion in tax relief in his 2024 budget proposal: A double tax exemption in the year of a child’s birth. A filer could claim a dependent exemption for an unborn fetus and another for the child that is born. Said Cox, “In a practical sense, it’s a little hard to administer something like that so what we would do is give two exemptions for every birth. One for the child being born and one for the pre-birth child.”
Will there be bigger tax cuts in Wisconsin? Wisconsin officials project a $6.6 billion budget surplus. Assembly Speaker Robin Vos, reflecting the goals of the Republican-led legislature, wants to cut taxes by “significantly” more than the last two-year budget’s $3.4 billion tax cut. Democratic Gov. Tony Evers will release his fiscal plan on Feb. 15.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].