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IRS bank reporting proposal to be dropped from budget bill, Manchin says

David Lerman, CQ-Roll Call on

Published in Political News

WASHINGTON — A plan to beef up tax enforcement by requiring banks to report new data on accounts to the IRS is unlikely to survive in a compromise budget reconciliation package, Sen. Joe Manchin III said Tuesday.

The West Virginia Democrat, a key negotiator on the partisan spending and tax package, said during an Economic Club of Washington discussion that President Joe Biden agreed with his assessment that the bank reporting plan would be overly intrusive and unworkable.

Recounting a conversation he had with Biden at a breakfast meeting Sunday, Manchin said he told the president: “I don’t know what happened. This cannot happen. It’s screwed up. ... And so he says, 'I think Joe’s right on that,'" Manchin said. "So I think that one’s going to be gone.”

Manchin's position would poke another roughly $250 billion revenue hole in the bill's offset package, on top of some $950 billion that's already likely out of the picture due to opposition to tax rate increases from Sen. Kyrsten Sinema, D-Ariz., another critical swing vote.

Top Democrats were trying to wrap up negotiations Tuesday on the reconciliation bill in order to have at least a "framework" in hand they could sell to House progressives so they wouldn't block a separate Senate-passed infrastructure bill later this week. Democrats want to clear that measure before a temporary extension of surface transportation programs lapses Oct. 31.

"There's not that much more time," Speaker Nancy Pelosi, D-Calif., told reporters Tuesday. "We have to have decisions largely today, a little bit into tomorrow, so we can proceed."

 

Pelosi and Majority Leader Steny H. Hoyer, D-Md., separately told reporters that progressives also want assurances that the Senate will be able to pass legislation that emerges out of the reconciliation framework, without changes.

"I think they’re going to need to have a framework and expression that gives them confidence that in fact the framework … passed by the House will also be passed by the Senate," Hoyer said.

As part of an effort to pay for the massive package designed to expand the social safety net and tackle climate change, lawmakers proposed cracking down on tax compliance through more extensive reporting by banks.

The Treasury Department initially proposed reporting on all accounts with at least $600 flowing through them. That threshold was later raised to $10,000 on top of wages, salaries and federal benefits after a storm of protests from business and banking interests.

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