•Capitol Hill tax staff have not ruled out a bipartisan tax deal by year-end, despite Republican efforts to pass a reconciliation package.
•Ji Prichard, Democratic tax counsel, highlighted interest in building on the 2022 SECURE 2.0 retirement law and the bipartisan Taiwan tax bill.
•Republicans are also focused on addressing international tax issues, including the global minimum tax on multinational corporations.
•Major hurdles include funding for border enforcement and overcoming Senate opposition to certain administration proposals.
•Passing a third reconciliation package remains uncertain but is not off the table, according to Ways and Means Republicans.
•The legislative calendar is shrinking, making consensus and swift action critical for any potential deal.
•Bipartisan cooperation on retirement and international tax issues could define future U.S. tax policy.
Capitol Hill tax staff have not ruled out the possibility of a bipartisan tax agreement being finalized by the end of the year, even as Republican lawmakers push to advance a narrower reconciliation package. The discussions come as key tax issues, including retirement reforms and international tax adjustments, remain unresolved. Ji Prichard, tax counsel for House Ways and Means Committee Democrats, emphasized the potential for a bipartisan bill that builds on recent legislative efforts such as the 2022 SECURE 2.0 retirement law. This law introduced provisions like the saver’s match and changes to the Thrift Savings Plan, aiming to enhance retirement savings opportunities for Americans.
During a tax seminar hosted by the Federal Bar Association on Thursday, tax staff from Senate Finance and Ways and Means committees highlighted the House-passed Taiwan tax bill as a potential legislative priority. The bill, which enjoys bipartisan support, has stalled in the Senate but could serve as a focal point for cooperation between parties. However, achieving bipartisanship is not guaranteed, as Republicans have not dismissed the idea of pursuing a third attempt at budget reconciliation—a legislative process that allows certain bills to bypass the Senate filibuster with a simple majority vote.
International tax issues are also a key area of interest for Republicans, who are seeking a unified approach to address the global minimum tax on multinational corporations. This tax, adopted by multiple countries, aims to ensure that large corporations pay a minimum level of tax regardless of where they operate. Larry Pounders, tax counsel for Ways and Means Republicans, stressed the importance of collaboration on this issue while safeguarding the U.S. economy’s independence and innovation. “I also think it’s important that we’re able to cooperate with this Pillar Two experiment and work together on that, while keeping our economy and independence so we can continue to be an innovator and a leader in world tax,” Pounders said.
Despite the potential for progress, significant hurdles remain. One major challenge is advancing funding for border and immigration enforcement through the reconciliation process. Efforts to bypass Democratic opposition have faced setbacks, particularly due to Senate concerns over President Donald Trump’s ballroom funding proposal and a $1.8 billion fund proposed by the administration. This fund aims to compensate individuals claiming political targeting by previous administrations. House leadership has been working for weeks to assemble a third policy package that could secure the narrow majority needed for passage. However, reaching consensus and passing such a package within the shrinking legislative calendar poses a formidable challenge.
Pounders acknowledged the difficulty of passing a third reconciliation package, comparing it to “trying to catch lightning in a bottle.” Yet, he did not rule out the possibility entirely, leaving the door open for a breakthrough. The current legislative environment remains fluid, with both parties navigating competing priorities and tight deadlines as the year draws to a close.
Tax staff from both sides of the aisle continue to engage in discussions, exploring avenues for cooperation while also preparing for the possibility of unilateral action through reconciliation. The outcome of these talks could shape tax policy in the U.S. for years to come, particularly in areas like retirement security and international tax competition.
