The United States House
of Representatives will begin discussing a bipartisan infrastructure measure
next week, but Democrats have threatened to vote against it for a variety of
reasons. This implies that the fate of a crypto tax provision may hinge on the
passage of another measure in the Senate.
(Endless) infrastructure week
The storyline
Last Monday, the Senate
delivered the House of Representatives its version of the infrastructure
package. Next Monday, the House will return from recess to attempt to approve
the measure. While we may be focused on the proposed law's crypto tax section,
factors unrelated to crypto may decide whether the measure is approved or if
the crypto language is changed.
Why does it matter?
Last week, the crypto
sector banded together to attempt to alter the infrastructure bill's crypto tax
provision. This attempt failed, and industry observers are now turning their
attention to the House of Representatives. However, there will be politics
around the bill that are unrelated to cryptocurrency, just as there will be in
the Senate.
Taking it apart
A huge tax authority
clause concerning crypto was placed in a much-more-massive must-pass infrastructure
package, which sounded a little strange. Despite unexpected bipartisan
resistance to the clause, the bill is already on its path to becoming law (I
mean from both crypto advocates and some of the more skeptical voices in this
industry). This measure, on the other hand, may face a similar destiny in the
House of Representatives.
We've all heard about
what occurred last week, but here's a quick recap: Despite a week-long campaign
to alter a dubious crypto tax provision in the Senate's $1 trillion infrastructure
plan (of which $550 billion is new expenditure), the original form of the
wording, which aims to generate $28 billion over ten years, was approved. The
House of Representatives stated on Tuesday that it would return from its Augustvacation on August 23 to debate the bill.
Congress' inclusion of cryptocurrency in its infrastructure package
indicates that legislators believe the sector is stable enough to survive.
However, much of what happens with this law will be influenced by politics
outside of the cryptosphere.
The Democratic Party
presently has a razor-thin majority in the House of Representatives (220-212).
That implies that if any Democrats vote against the measure or opt not to vote,
the Republican side would have to make up the difference with votes, but nobody
knows how many Republicans would vote for it.
However, there is
significant disagreement among Democrats over whether or not to vote for the
infrastructure package. Progressive Democrats have threatened to vote against
the bipartisan infrastructure plan unless the Senate approves a far bigger $3.5
trillion package, which is unlikely to happen until the fall.
However, a (smaller)
group of more moderate Democrats has threatened to vote no on the bigger
package unless the House first approves the smaller, bipartisan measure.
After the House returns
next week, I'm sure we'll have a better idea of how this bill will go forward,
but for now, it's uncertain if the bill will pass at all, much alone with changes
to address industry concerns over the crypto component.
Other pressing concerns
may take priority over the infrastructure bill discussions. The impending
humanitarian catastrophe may be a top concern for House members as they respond
to the US military's departure from Afghanistan.
To be sure, there is
bipartisan resistance to the bill's present wording on the crypto tax
provision. That is undeniable. Rep. Anna Eshoo (D-Calif.), a powerful
Democratic lawmaker who represents parts of Silicon Valley, recently wrote an
open letter to House Speaker Nancy Pelosi (D-Calif.), urging her to support an
amendment proposed by Senators Pat Toomey (R-Pa.) and Cynthia Lummis (R-Wyo.)
and backed by Rob Portman (R-Ohio), Mark Warner (D-Va.), and Kyrsten Sinema (D-
(D-Ariz.).
Reps. Patrick McHenry
(R-North Carolina), Bill Foster (D-Ill.), Ted Budd (R-North Carolina), Ro
Khanna (D-Calif.), Tom Emmer (R-Minn.), and Darren Soto (D-Fla.) have all
expressed support for altering the wording.
However, I'm not sure
whether this level of support will be sufficient for Congress to alter the
wording. In the Senate, we saw the same kind of support. After Sen. Richard
Shelby (R-Ala.) attempted to attach his own military spending amendment to the
Toomey-Lummis-Portman-Warner-Sinema effort, it didn't matter much.
“The body is refusing to
take up an amendment that has broad bipartisan support and that we all know
fixes something that desperately needs to be fixed because there is a
difference of opinion on whether or not the Senator from Alabama should get a
vote on his amendment because there is a difference of opinion on whether or
not the Senator from Alabama should get a vote on his amendment because there
is a difference of opinion on whether or not the Senator from Alabama should
get a vote on his amendment. After his effort for unanimous agreement failed,
Toomey stated in floor comments, "This isn't a whim of the Senator from
Pennsylvania - there is nobody who denies that there is an issue here."
Nonetheless, the bill
will be debated in the House, which may contain changes. It's unclear if any
changes will be considered at this time, but it's worth keeping a watch on it.
As we come closer to the House's return, we'll speak more about it.
The reign of Biden
The guard is changing.
Last week, Bloombergreported that President Joe Biden is contemplating selecting Acting CFTC Chair Rostin Behnam to lead the federal commodities regulator for a full term.
0 Comments