Supreme Court to fast-track Trump tariff case. The Supreme Court has agreed to hear arguments in November on the Trump administration’s sweeping tariffs, setting up a test of executive power over trade policy. A federal appeals court in August struck down much of the program, ruling that President Trump unlawfully relied on the International Emergency Economic Powers Act to impose broad import taxes on about 90 countries. The tariffs remain in place during litigation, but five small businesses, a dozen states, and a coalition of conservative and libertarian legal experts argue they usurp Congress’s constitutional taxing authority. The administration contends the law’s emergency powers authorize the levies.
Funding talks advance with stopgap in play. Politico reports The White House has asked Congress to extend government funding through Jan. 31, but House Appropriations Chair Tom Cole (R-OK) called the date only a suggestion, saying the administration was “very open to flexibility.” Negotiators are working toward a plan to set full-year funding levels for three bills while covering the remaining nine with a short-term continuing resolution. House Majority Leader Steve Scalise (R-LA) said Republicans will give Cole “latitude” to strike a bipartisan deal.
CBO projects $1.8 trillion deficit for 2025. The Congressional Budget Office (CBO) released its monthly budget review, estimating a $1.8 trillion federal budget deficit for fiscal year 2025. CBO also reported that the shortfall for the first 11 months already totals about $2 trillion, an amount that is $92 billion more than the deficit recorded during the same period last fiscal year and reflects a revenue increase of $299 billion (7 percent), and an outlay increase of $391 billion (6 percent).
Child tax credit boost leaves out lowest-income families. TPC’s Elaine Maag explains how the 2025 reconciliation law, the One Big Beautiful Bill Act (OBBBA), permanently raised the child tax credit to $2,200 per child and indexed it for inflation. She shows that middle- and higher-income families gain about $200 on average and more stability in planning. But because the credit remains only partially refundable, roughly 19 million children in low-income families will still not receive the full benefit—up from 17 million before the law.
This item has been corrected. The emailed version indicated the number of children in families that cannot receive the full CTC because their parents do not earn enough is 30 million, the correct number is 19 million.
Trump administration pulls back IRS crackdown on corporate tax shelters. The New York Times reports that the Trump administration is dismantling Internal Revenue Service efforts to target aggressive tax shelters used by major corporations and wealthy individuals. Among the rollbacks: rules requiring companies to disclose certain transactions, penalties aimed at abusive insurance schemes, and guidance for auditors scrutinizing “basis shifting” transactions. The IRS crackdown had been projected to raise more than $100 billion over 10 years, reported TaxNotes. Industry groups and Republican lawmakers pushed for the changes, but former IRS Commissioner Larry Gibbs called congressional letters opposing the audits an attempt to politicize tax enforcement.
Senators press Treasury to rescind corporate AMT guidance. A group of Democratic lawmakers is urging Treasury Secretary Scott Bessent to withdraw recent IRS guidance that they say weakens the corporate alternative minimum tax (CAMT). Tax Notes covers the letter signed by Sens. Angus King (I-ME), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), John Hickenlooper (D-CO), and Edward Markey (D-MA), along with Rep. Don Beyer (D-VA). They argue the new rules create loopholes that let highly profitable corporations sidestep CAMT, which requires firms with over $1 billion in profits to pay at least 15 percent in taxes. The lawmakers contend the guidance undermines congressional intent and delays full enforcement of the law.
Maine governor urges extension of enhanced ACA tax credits. Maine Gov. Janet Mills (D) warned that letting enhanced premium tax credits expire would sharply raise health coverage costs for over 61,000 residents. Tax Notes reports that Mills said average monthly premiums on the state marketplace could rise by $258 in 2026, and even higher when combined with insurer rate increases. As many as 9,500 Mainers could lose coverage entirely. Mills urged Congress to act by September 30. Maine’s delegation is split: Rep. Jared Golden (D-ME) backs a bipartisan one-year extension, while Rep. Chellie Pingree (D-ME) supports permanent legislation. Sen. Angus King (I-ME) has cosponsored the Senate version of the Health Care Affordability Act, while Sen. Susan Collins (R-ME) voted against the OBBBA, given its Medicaid funding reductions.
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