Capitol Hill Tax Counsel Weigh in on Issues to Watch in 2026

January 09, 2026

The conventional wisdom that significant legislative action is unlikely in even-numbered years due to local and midterm elections was challenged by a bipartisan panel of speakers at the D.C. Bar’s 2026 Tax Conference on January 7.

Moderated by Beth Bell, principal of PricewaterhouseCoopers’s Washington National Tax Services practice, the legislative update is a perennial highlight of the conference in which beltway insiders from both sides of the aisle provide their insights into recent events in tax law and changes on the horizon. 

The day after the session was held, the U.S. House of Representatives voted to extend Affordable Care Act subsidies for three years. Bell, who previously served as senior advisor at the U.S. Department of the Treasury and tax counsel on the House Committee on Ways and Means, asked the panelists about the prospects for a health care deal. 

Randy Herndon, chief tax counsel for Republican staff on the Senate Finance Committee, commented that while it is always perilous for tax professionals to weigh in on the topic, he said that many high-level discussions on a potential health care deal had already taken place. Sarah Schaefer, chief tax advisor for Democratic staff on the Senate Finance Committee, adopted a similarly cautious tone. 

With the January 30 deadline looming to fully fund the government, some of the panelists indicated that the health care issue might stall negotiations on broader tax concerns. Andrew Grossman, chief tax counsel for Democratic staff on the House Committee on Ways and Means, said his personal assessment is that “a deal on health care is going to have to unlock before there is a meaningful tax vehicle.” 

“It is very difficult for our members to countenance letting some of the various tax-extender or other business provisions jump the line when some 15 million people are about to lose their health insurance,” Grossman said.

Sean Clerget, chief tax counsel for Republican staff, said that House Ways and Means Committee Chair Jason Smith would likely be open to having a tax vehicle whether or not there is a health care deal. Herndon echoed this perspective, noting that there were tax provisions resulting from bicameral and bipartisan work over the past two years that he felt could cross the finish line without controversy.

When asked whether there would be another reconciliation bill, Clerget said that this was his favorite question to answer. “Absolutely not, with some caveats,” Clerget said. “Chairman Smith was very vocal about owning the One Big Beautiful Bill, with the emphasis on one, and I think that helped us be able to get that done by July, that sort of consolidation strategy.” Clerget went on to say that if a reconciliation bill were introduced, he expected it to be very narrow in purpose.

Other discussion topics included Section 899, a proposed tax provision introduced in the One Big Beautiful Bill that would have addressed foreign tax issues, including digital services taxes (DSTs). Grossman said there is “a bipartisan distaste for DSTs” and that during the Biden administration, the Democratic caucus had shown an appetite for trade remedies. 

Regarding the publicly released iterations of Section 899, Grossman viewed them as “a cartoonish, oversized mallet … to solve a problem that is perhaps better solved with a scalpel,” though he did go on to acknowledge that “a lot of damage can be done with a scalpel too.”

Herndon said that he felt there would be positive news associated with increased tax refunds, take-home pay, and wages in the coming year. Schaefer countered, saying that she would be focused on the child tax credit. 

“[Considering] inflation, and health care premiums going up, and the impact of tariffs to families … are the bigger refunds totally offset or dwarfed by other policy impacts? That’s an important context to the potentially larger refunds,” Schaefer said.