A Busy December: What We’re Tracking
The 117th Congress may only have one month left this year, but legislators are returning to a long list of “must do’s.” Here’s what we’re tracking.
- National Defense Authorization Act (NDAA): National defense policy does not usually overlap with municipal bond markets, but whenever Congress considers a 3000+ page bill, other policy priorities are bound to enter the discussion. This year appears to be no exception. We are keeping an eye on two specific proposals that could be included as amendments to the defense bill. It is unclear whether Congress will pass the NDAA by the end of the year or opt for a short-term extension into early next year.
- Financial Data Transparency Act (FDTA): The NDAA passed by the House in July contained a version of the FDTA, which would apply new data standards to information systems established by the Municipal Securities Rulemaking Board (MSRB). In October, NABL joined a Disclosure Industry Group (DIG) letter opposing a Section 203 of the bill, pertaining to the MSRB. While the bill’s champions in the Senate remain committed to its inclusion in the NDAA, its final fate remains uncertain. Legislative changes to improve the bill are also under consideration. The Wall Street Journal covered the debate in an article earlier this week.
- ENABLERS Act: Some members of Congress are also working to include the Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act in the NDAA. The Act, also included in the House version of the NDAA, would expand the definition of financial institutions under the Banking Secrecy Act (BSA) in a way that could require certain attorneys to submit Suspicious Activity Reports (SARs) on your clients’ financial transactions. The American Bar Association (ABA) has expressed its concerns on the potential bill to Congress in an October letter.
- FY2023 Approps: In September, Congress passed a continuing resolution (CR) funding the government through December 16, 2022. By that date, Congress must either 1) fully appropriate the government for FY2023, 2) pass another CR, or 3) risk a government shutdown. Other legislative priorities typically pass as part of large year end spending packages.
- PAYGO Scorecards (Sequestration): We continue to track the status of efforts to address Pay As You Go (PAYGO) scorecards. If left unaddressed, outstanding scores would trigger massive sequestration of certain mandatory spending programs, including subsidies for direct pay bonds. Congressional leadership offices are optimistic that scorecards will be addressed, but the precise way they will be handled remains uncertain. Congress could wipe the scorecards clean or rollover the outstanding balances to next year.
- Tax Extenders: Congress did not pass a tax extenders package last year, allowing a number of incentives to expire on December 31, 2021. Another set of provisions are set to expire at the end of this calendar year. While Congress does not have to pass an extenders package at any time, a lame duck session presents a good time to do so. We will be watching the status of negotiations and to see if any other unrelated tax provisions enter the discussions. View tax provisions set to expire >