Senate’s Infrastructure Bill: What to Expect on Saturday

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The U.S. Senate is poised to vote on a $1 trillion infrastructure bill that will see some $550 billion in new spending for rail networks, roads and bridges, water management and a plethora of other issues. Before that, however, it must work through more than a dozen amendments, including two that seek to narrow a cryptocurrency tax reporting provision that would raise about $28 billion over 10 years.

In its present form, the provision would broaden the definition of a “broker” to any entity within the cryptocurrency industry that facilitates the transfer of digital currencies for another person. This could include miners, hardware and software developers, and other parties that help facilitate a transaction, but don’t participate in the transaction, the Blockchain Association, Coin Center, Coinbase, Ribbit Capital and Square said in a joint statement earlier this week.

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“Second, it makes possible a massive increase in financial surveillance, potentially requiring companies to report information about individuals even if they are not customers,” the groups added.

Related: Tesla’s Musk Urges Lawmakers Weighing Infrastructure Bill’s Tax Provision Not to Pick Crypto ‘Winners or Losers’

The provision was one of a few that held up the introduction of the overall bill last week, and may have contributed to a delay in votes on Thursday, an individual close to the negotiations told CoinDesk.

To narrow the scope of the provision, Senators Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) and Cynthia Lummis (R-Wyo.) introduced an amendment that would exempt miners and other types of validators, as well as other entities that don’t provide custody and trading services. The Senate is expected to vote on this amendment at some point on Saturday, though negotiations may push the vote to as late as Monday.

However, Senators Rob Portman (R-Ohio), one of the key negotiators of the overall infrastructure package and the lawmaker who inserted the original provision, introduced a competing amendment with Senators Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.), the other lead negotiator on the overall bill.

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This amendment would specifically exempt proof-of-work validators (i.e. miners) and entities involved in selling hardware or software that allows individuals to control their own private keys. The Senate is also expected to vote on this amendment on Saturday.

Bipartisan conflict

Related: The US Senate Goes to War Over Crypto Taxation

Both amendments have bipartisan support and are sitting in front of a Senate that has 50 Democrats and Republicans apiece.

CoinDesk reached out to every Senator who is not a named sponsor to ask if they would vote for either amendment. The majority did not respond by press time.

Spokespeople for Senators Marsha Blackburn (R-Tenn.), Ted Cruz (R-Texas) and Steve Daines (R-Mont.) told CoinDesk the lawmakers would support the Wyden/Lummis/Toomey amendment.

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On the other hand, Senator Sherrod Brown (D-Ohio) told CoinDesk through a spokesperson that “crypto assets and trading platforms need to play by the same rules as everyone else.” He did not address non-trading businesses or explicitly say if he would vote for either amendment.

President Biden has also thrown his support behind the Warner/Portman/Sinema amendment.

“We believe that the alternative amendment put forward by Senators Warner, Portman, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance,” White House Press Secretary Jen Psaki told reporters on Friday.

The bill will go to the House after the Senate passes it, where there is also bipartisan opposition to the crypto provision. Reps. Ted Budd (R-N.C.), Tom Emmer (R-Minn.), Darren Soto (D-Fla.) and Ro Khanna (D-Calif.) have all expressed support for either the Wyden/Toomey/Lummis amendment specifically, or at least narrowing the language.

The House won’t take up the infrastructure bill until this fall, after it returns from a recess.

Related Stories

  • Janet Yellen Has Been Lobbying Against Wyden-Lummis-Toomey Crypto Amendment: Report
  • Senator Who Wrote Controversial Crypto Tax Rule Proposes Modest Revision

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Author: CoinDesk


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