Policy/Legislation
Democratic Tax and Spending Increases Encounter Resistance: The Wall Street Journal reports that Democrats seeking to pass their $3.5 trillion healthcare, education and climate legislation are wrestling over the amount they should pay with tax increases and other policy changes—and what should be funded with deficit spending. That could prompt them to increase federal borrowing or pare back spending ambitions. The Democrats’ dilemma centers on how much of President Biden’s proposed taxes on capital gains and multinational corporations they are willing to accept, particularly plans to tax unrealized capital gains at death and raise capital gains tax rates. Senate Finance Committee Chairman Ron Wyden (D-OR) has offered a long list of tax increases, including an excise tax on stock buybacks, a tax on companies based on their ratio of executive pay to average worker pay and limits on trusts used to avoid the estate tax. The options also include an annual tax on unrealized gains. Senate Finance members started reviewing Wyden’s tax ideas this week, reports The Washington Post. Centrist Senate Democrats, including Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) have already signaled their view that the $3.5 trillion price tag might be too high.
Manchin Called For Pause, Lower Price: The Wall Street Journal reports that Sen. Joe Manchin (D-WV) stepped up his campaign last week to cut the price tag of Democrats’ $3.5 trillion healthcare, education and climate legislation, calling for a “strategic pause” in the effort, which Democrats are working to wrap up this month. In an opinion article in The Wall Street Journal, Manchin suggests that the government’s fiscal capacity be reserved for future potential crises rather than new programs today. The Hill reports that Manchin wants to limit reconciliation costs to $1.5 trillion, but Senate Majority Leader Chuck Schumer (D-NY) rejected Manchin’s pause idea and Senate Budget Chair Bernie Sanders (I-VT) rejected a smaller price tag. The House Ways and Means Committee, in charge of tax measures in the House, began consideration of its version of reconciliation Thursday and was expected to work on its tax provisions next week, ahead of a Sept. 15 deadline set by House Speaker Nancy Pelosi (D-CA).
GOP Hopes Spending Traps Derail Biden Agenda: The Hill reports that Senate Republicans are hoping they successfully laid spending traps that will scuttle, or significantly water down, President Biden’s $3.5 trillion tax and spending package. Republicans, including Senate Minority Leader Mitch McConnell (R-KY), believe that by passing a roughly $1 trillion bipartisan bill through the Senate, they've made it harder for Democrats to rally behind the larger package without at least making changes that lower the overall price tag. And they are publicly rooting for, and raising pressure on, moderates in both chambers who have signaled unease about the size of the Democratic package.
ADISA is working hard to ensure the House and Senate committees don’t add President Biden’s plan to limit Section 1031 like-kind exchanges as part of reconciliation. Read our policy statement here.
Regulation
SEC Chair Eyes Corporate Disclosures to Curb Consolidation: Yahoo! Finance reports that U.S. Securities and Exchange Commission Chair Gary Gensler will lean on corporate disclosures as the Biden administration sets its eyes on curbing anti-competitive behavior. In a meeting of the newly formed White House Competition Council set to take place later this week, Gensler will also emphasize the agency’s examination of the impact of revenue models like payment for order flows, a senior SEC official told Yahoo Finance. The SEC is one of six independent agencies scheduled to meet with eight cabinet secretaries in the council’s first-ever meeting on Friday.
SEC Marketing Rule Causes Advisers Most Compliance Concerns: InvestmentNews reports that an overhauled marketing regulation for investment advisers ranked as their primary concern related to regulatory compliance in a survey released late last week. The SEC approved the new marketing rule in December, and it became effective on May 4, with a compliance deadline of Nov. 4, 2022. The regulation updates an advertising rule that had been in place since 1961 by adding provisions that can apply to social media communications. Even though advisers don’t have to comply with the rule for more than a year, it ranked as the hottest compliance topic in the 2021 Investment Adviser Compliance Testing Survey released by the Investment Adviser Association.
.jpg?upscale=true&width=1116&upscale=true&name=ADISA2021%20ADISA(eblastheader-purple).jpg)
