Don't Mess With Taxes

UPDATE Sunday, Dec. 27, 2020: Donald Trump, despite objecting to the amount of COVID-19 relief individual payments and some spending provisions, signed the federal appropriations measure into law. However, he did so a day after unemployment benefits from a July extension expired, costing millions of recipients at least a week of these federal benefits.

UPDATE Monday, Dec. 21, 2020: Congress and the White House over the weekend extended the shutdown deadline to midnight today. But another continuing resolution is in the works to keep money flowing for seven more days, through Dec. 28. That would ensure lawmakers and the Administration can finalize the fiscal 2021 funding measure, which has been slowed by the effort to include additional COVID relief in the bill.

UPDATE Friday, Dec. 18, 2020: Just hours before the federal government ran out of temporary fiscal 2021 money, the House and Senate agreed to move the funding deadline to midnight on Sunday, Dec. 20. Donald J. Trump is expected to sign it signed it. The hope is that will be enough time for lawmakers to finalize a second COVID-19 relief package that will be attached to the spending bill. We'll see.

UPDATE Thursday, Dec. 17, 2020: It looks like Congress is going to have to pass another short-term federal funding bill. With the Dec. 18 extended deadline looming, the House and Senate have yet to finalize a second COVID-19 relief bill, which at last report will include extended unemployment benefits AND checks for most individuals. Lawmakers want to get that pandemic bill done so they can attach it to — and pass — the funding measures discussed in this post without having Uncle Sam's offices shut down, even for a few hours or days.

UPDATE Friday, Dec. 11, 2020: Congress gave itself breathing room, passing a week-long extension on Dec. 11 of the deadline to keep the federal government running through fiscal year 2021. The new federal funding target — and date to possibly pass another COVID-19 relief measure — is next Friday, Dec 18.

Before taking its Thanksgiving break, the Senate released its recommendations for the 12 appropriations bills needed to fund the government through fiscal year 2021.

Back in July, the respective House committees approved all 12 of their FY21 appropriations bills. Ten of them have been passed by the full House.

But officially, Uncle Sam is running right now on stop-gap money. Since the House bills didn't make it through the full legislative process before the 2021 fiscal year began on Oct. 1, a couple of continuing resolutions were enacted.

The latest one runs out on Dec. 11 Dec. 18 (see note at top of this post).

That's why the Upper Chamber took its broad-brush fiscal step.

Senators hope the drafts will help both sides in both legislative bodies come to a quick(er) agreement on final fiscal funding. Both Senate Majority Leader Mitch McConnell (R-Kentucky) and House Speaker Nancy Pelosi (D-California) have said they want Congress to agree on all 12 bills and pass them in one fell swoop as an omnibus spending bill by year's end.

Good luck with that.

Usually tardy, not timely: Not to be a pessimist, but I worked on Capitol Hill and then with lawmakers in a couple of private companies' Washington, D.C. government relations offices for almost 20 years. Congress just cannot do anything until it is backs-to-the-wall time.

Still, thanks to the House this year, much of the heavy lifting has been done.

And with the Senate drafts, Senate Appropriations Committee Chairman Richard Shelby (R-Alabama) thinks things can happen relatively quickly.

"By and large, these bills are the product of bipartisan cooperation among members of the committee. As negotiations with the House begin in earnest, I look forward to working with Chairwoman Lowey, Vice Chairman Leahy, and Ranking Member Granger to resolve our differences in a bipartisan manner," said Shelby.

We'll see. Soon, I hope.

Fiscal funding proposals: There are 12 areas of appropriations. Below is a look at how the funding is distributed, along with the action taken earlier this year by the House.

The other two appropriations bills cleared their House committees, but did not make it into either of the two so-called minibus (for mini omnibus funding) bills that passed in July.

They are fiscal year money to keep Homeland Security and the Legislative Branch operating.

Tax-related money: Obviously, all of these departments need federal money that the U.S. Treasury gets from taxes to do their jobs.

And the Internal Revenue Service, which brings in those dollars, gets its operational income as part of the Financial services and General Government appropriations bill.

The Senate recommendation for the IRS in FY21 is a total of $11.5 billion.

The House-passed money bill wants to give the IRS more. It calls for the tax agency to get $12.1 billion for FY21. That's $606.4 million more than the IRS got for fiscal 2020.

Of the House's $12.1 billion, that bill calls for the money to be allocated in part to the areas listed below. I've noted the Senate FY21 recommendations following the House approved amounts. You'll see a trend when it comes to the Senate funding approach.

• Taxpayer Services would get $2.6 billion in the House bill, an increase of $91 million from the FY20 enacted level. This new total includes growth for the Volunteer Income Tax Assistance Matching Grants Program, Low Income Taxpayer Clinics and the Taxpayer Advocate, as well as continued support for Tax Counseling for the Elderly.
  The Senate proposal for Taxpayer Services is slightly less: $2.5 billion. That's the amount provided for FY20.

• Enforcement activities at the IRS would get $5.2 billion from the House. That's an increase from last fiscal year of $196 million.
  The Senate proposal for Enforcement again is a tad less: $5.01 billion. That's the FY20 amount.

• Operations Support at the IRS would get $4.1 billion from the House. That's a bump of $249 million when compared to the amount it got the last fiscal year.
  The Senate proposal for Operations Support is $2.5 billion. Again, that's the amount provided this area in FY20.

• Business Systems Modernization at the IRS would get $250 million in the House bill. That's $70 million more than the FY20 enacted funding amount.
  The Senate proposal for upgrading the agency's Business Systems is $180 million. Wait for it. That's the FY20 funding level.

Eyes on the deadline: That's a lot of numbers. Twelve appropriations areas. Ten already passed by the House. Billions — $11.5 billion suggested by the Senate vs. $12.1 billion OK'ed by the House — for the IRS. Plus, the specific allocation amounts for various IRS operations.

So which figure gets this weekend's By the Numbers honor?

Dec. 11. (Yeah, even with procrastinating Representatives and Senators pushing the deadline to next week, the original Dec. 11 target remains my pick.)

The date wins because if some amount of money isn't approved by both the House and Senate and signed into law by the outgoing president by then, we could be looking at another government shutdown.

Right before Christmas. During the COVID-19 pandemic.

Chances looking good (fingers crossed!): It looks like Shelby's optimism might be warranted. Politico reports that before breaking for Turkey Day celebrations, top House and Senate appropriators "clinched a deal on a bipartisan set of funding levels, paving the way for a $1.4 trillion spending package to avert a government shutdown next month."

The agreement establishes overall totals for the 12 appropriations measures that will be rolled into one massive omnibus budget bill for the rest of the fiscal year. Negotiators are keeping the precise figures under wraps until the deal is officially done.

Here's hoping pessimistic me will be wrong and that Representatives and Senators and White House and get this thing done by Dec. 11. Or sooner.

We definitely do not need another 2020 legislative funding crisis to add to the already long list of 2020 chaos.

You also might find these items of interest:

• Tax and financial lessons from the government shutdown
• After 35 days the longest U.S. government shutdown ever finally is over
• 7 former IRS commissioners chastise Congress for slashing the tax agency's budget, urge full funding

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