Congress returns this month to deal with a number of issues, including legislation that could see tax increases impacting Big “I” members, as well as reauthorizing critical programs such as the National Flood Insurance Program (NFIP).
Fall in Washington is gearing up to be one of the most chaotic and consequential months for policymaking in the last few years. As a result, September will be an equally important month for independent agents.
This month, Congress returns to a slew of fiscal deadlines, expiring government programs, $1 trillion bipartisan infrastructure legislation and additional fallout from the situation in Afghanistan. Congress will also continue to consider the $3.5 trillion reconciliation package that is the top priority for the Biden Administration. Included in this legislation will be provisions on climate, childcare, education, and expanding Medicare, among others.
Most important for Big “I" members is that the proposed reconciliation legislation could include up to $1.75 trillion in tax increases, including an increase in the corporate tax rate to either 25% or 28%, an increase in the top marginal tax rate to 39.6%, the possibility of eliminating or phasing out the 20% tax deduction for small businesses, eliminating stepped-up basis and raising the capital gains tax rate.
To complicate matters for Democrats, passage of the reconciliation package is directly tied to a separate, Senate-passed bipartisan infrastructure bill.
House Speaker Nancy Pelosi, in agreement with moderate Democratic party members, has agreed to a soft Sept. 27 deadline for a vote on the $1 trillion bipartisan infrastructure legislation. However, progressive members want both pieces of legislation to be voted on simultaneously, thus creating a showdown at the end of September.
Further complicating things is the quickly approaching Sept. 30 deadline to fund the federal government and reauthorize a number of critical programs, including the National Flood Insurance Program (NFIP). Any lapse in the NFIP would be devastating to policyholders across the nation who are facing an increasing number of severe flooding events. A lapse in the program would mean policyholders would not be able to obtain coverage, or, importantly, buy or sell properties of all kinds.
Additionally, Congress must act to raise the debt ceiling sometime this fall. Republicans and Democrats are currently locked in a showdown over whether a debt limit increase should be included in government funding legislation or the reconciliation package. Important for insurance agents, disagreement between the two parties could lead to a government shutdown, which, in turn, could lead to a lapse in the NFIP.
As many of these issues come to a head at the end of September, the Big “I" will continue to advocate on behalf of its members and provide regular updates.
Wyatt Stewart is Big “I" assistant vice president of federal government affairs.