US infrastructure bill advances amid cryptocurrency debate
15:19, 9 August 2021
The US Senate moved closer to passing an infrastructure bill over the weekend, bogged down over competing amendments that could impose new tax reporting and data collection regulations on cryptocurrencies.
Late Sunday, Senators voted 68-29 to end debate on the $1trn spending bill, clearing the way for final passage as early as late tonight or early Tuesday morning.
Advancing the bill was seen as a positive move for the White House. “I think we’re going to get this done,” said Pete Buttigieg, transportation secretary, on Fox News Sunday.
He said the bill enjoys “a remarkable coalition” of supporters, including business, labour and lawmakers.
Seventeen Republicans, including Senate minority leader Mitch McConnell (R-Kentucky), voted to end debate on the bill. The conservative US Chamber of Commerce and US Association of Manufacturers support the bill.
Taking aim at cryptocurrencies
Before Sunday’s vote, senators spent two days negotiating amendments, including cryptocurrency regulations, but future amendments remain hazy after Senators failed to advance the tax changes.
“It’s hard to guess what’s next,” for the amendments, a Finance committee staffer told Capital.com on Monday, adding constitutionally, a stand-alone tax bill on cryptocurrency would have to originate in the US House of Representatives.
A bipartisan group of senators struck a deal with the administration in July to include new tax reporting requirements for cryptocurrencies. Under the deal, roughly $28bn in new taxes would be generated by taxing the industry, two sources told Capital.com.
The industry cried foul, saying the legislation could devastate the American cryptocurrency sector as the language is too broad on privacy issues and unreasonably targets the industry.
The Electronic Frontier Foundation, a digital rights nonprofit said in a report released last week that, “The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.”
Two competing amendments were offered but failed to gain traction. The first amendment, which would narrow the focus to exchange fees, was introduced by Finance committee chair Ron Wyden, (D-Washington State) and Republican senators Pat Toomey (Pennsylvania) and Cynthia Lummis (Wyoming). The second amendment, to tax software and cryptocurrency companies, was sponsored by Rob Portman (R-Ohio) and Mark Warner (D-Virginia).
Wyden told reporters Saturday evening, when it appeared the amendments were in trouble, that he would work to resolve the issues brought up by senators and the cryptocurrency industry. However, he said, the US needs to “crack down on tax cheats.”
Next steps
The House of Representatives is in recess and is expected to consider the bill when it returns in a few weeks, when, sources told Capital.com, the legislation should pass without much trouble.
However, over the weekend some tensions emerged between moderate Democrats in favour of a quick, straight-up vote, and progressives who want more social programs in the spending bill.
Wall Street appeared to react positively to the Senate’s progress, as construction-related stocks climbed once again. Deere & Co. stocks gained $1.16 a share to $368.05 during mid-morning Monday trading. Caterpillar inched up $0.14 a share to $208.65.