March 1 is coming fast. That is the self-imposed deadline for Congress to pass four of the twelve appropriations bills that make up the annual discretionary budget for the federal government. The other eight bills are due March 8.
This extension since September 30 (when the current budget year started) was supposed to give Congress time to follow normal approval process for all 12 bills – House subcommittee, House Appropriations Committee, House of Representatives, Senate subcommittee, Senate Finance Committee, Senate, conference committee, and then to the President for his signature.
As of this writing, seven appropriations bills have passed U.S. House of Representatives and zero appropriations bills have passed the U.S. Senate. We are clearly not on track to meet the March deadlines, so we will be either implementing yet another extension or reverting to old habits and creating a giant omnibus bill that includes any unfinished bills.
Speaking of not meeting deadlines, the House of Representatives overwhelmingly approved H.R. 7024, the Tax Relief for American Families and Workers Act of 2024, on January 31, 2024. Amazingly, this bill would make retroactive changes to 2023 tax laws after taxpayers have started filing their tax returns. Tax dysfunction is not always the IRS’ fault, and it is unclear whether the Senate will even take up this legislation.
The window for passing the remaining laundry list meaningful legislation (aid to Ukraine/Israel, immigration reform, Federal Aviation Administration reauthorization, farm bill reauthorization, a federal budget for 2023 and 2024, etc.) will close quickly this year due to election pressures. Anything that is not completed by early summer will likely get extended until the 119th Congress which begins in January 2025.
The 119th Congress will be the one that decides whether current federal income tax rates and policies are extended beyond December 31, 2025, or if we will revert to higher income tax rates on January 1, 2026.
