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House Republicans’ slimmed-down plan to try to avert a government shutdown was defeated in a hastily called vote Thursday, as several dozen GOP lawmakers joined with Democrats in rejecting the proposal endorsed by President-elect Donald Trump. The package failed by a vote of 174-235 just hours after it was hastily assembled by Republican leaders seeking to comply with Trump's demands. A prior bipartisan deal was scuttled after Trump and the world's richest person Elon Musk came out against it on Wednesday. Government funding is due to expire at midnight, triggering a partial shutdown. Millions of federal and military employees could be hit with paycheck delays, though that depends on how long a shutdown lasts. The IRS says it will furlough more than half of its nearly 90,000 employees if a shutdown happens. National Park Service sites will also be closed. However, entitlements such as Social Security and Medicare have their own funding vehicles that are separate from the appropriations currently in question. The Social Security Administration’s latest contingency plan for a lapse in funding says it will maintain activities “needed to ensure accurate and timely payment of benefits.” Additionally, the U.S. Transportation Security Administration warned that travelers during the busy holiday season could face long lines at airports.

 

AP News

Reuters

Washington Post

Wall Street Journal

The American economy experienced a robust growth rate of 3.1% in the three months to the end of September, driven by strong consumer spending and increased exports, according to the Commerce Department. This marks an acceleration from the previous quarter's 3% growth, with GDP growth exceeding 2% in eight of the last nine quarters. Economists polled by the Wall Street Journal had been expecting a smaller, 2.9% increase. “This week’s data show the economy is set to end 2024 on a solid note, which is fortunate since we’ll have to contend with heightened policy uncertainty and possibly greater challenges in 2025,” commented Nationwide economist Oren Klachkin. “We think the Fed maintains an easing bias, but the bar for rate cuts just got higher.”

 

The Hill

Bloomberg

Wall Street Journal

Sales of previously occupied U.S. homes rose in November to their fastest pace since March as home shoppers were encouraged by a wider selection of properties on the market, despite mortgage rates rising above 6%. The National Association of Realtors said Thursday that existing home sales grew 4.8% from October, to a seasonally-adjusted annual rate of 4.15m. They were up 6.1% on November 2023. The national median sales price rose 4.7% from a year earlier, to $406,100. Contract closings increased in three of four US regions, led by a 8.5% jump in the Northeast. Individual investors or second-home buyers purchased 13% of homes, compared with 17% in October, while first-time buyers made up 30% of purchases.

 

ABC News

Bloomberg

Wall Street Journal

Jobless claim applications in the U.S. decreased by 22,000 to 220,000 in the seven days to December 14th, according to the Labor Department, below the 230,000 expected by economists polled by Reuters. The four-week moving average of new applications rose to 225,000, while continuing claims, reported with a one-week lag, fell by 5,000 to 1.87m. “Elevated continuing jobless claims reflect slowing in the labor market, as laid-off workers face longer stretches of unemployment," commented economist Eliza Winger. The median duration of unemployment reached 10.5 weeks in November, up from nine a year earlier.

 

The Baltimore Sun

Bloomberg

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The IRS has released the final versions of the 2025 federal withholding certificate and related forms. Key updates include guidance on using the Tax Withholding Estimator, which is now included in the instructions for the 2025 Form W-4, Employee's Withholding Certificate. Employees are reminded to have their most recent pay slip handy when utilizing the estimator. Similar modifications were made to the 2025 Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments. The changes aim to streamline the withholding process for taxpayers.

 

Bloomberg Tax

The U.S. Senate and House of Representatives have expressed concerns over an IRS decision to close the Taxpayer Assistance Center (TAC) in Bangor, Maine. This closure is expected to significantly impact rural residents, particularly in counties with limited internet access. "Many of these communities have limited Internet and broadband access, making in-person TAC services essential," the lawmakers stated. The closure would force residents to travel long distances for assistance, with some facing commutes of over 550 miles. The lawmakers are urging the IRS to reconsider this decision and explore alternatives, especially with the tax filing season approaching. They also seek to reopen a staffed TAC in Aroostook County to better serve constituents.

 

Tax Notes

The SEC has approved the PCAOB's 2025 budget, totaling $399.7m, which supports 945 positions. The new budget reflects a 3.8% increase from the previous year's $384.7m. The accounting support fee (ASF) is set at $374.9m, with $346.1m allocated for public company issuers and $28.8m for registered broker-dealers, marking a 4.5% increase from $358.8m in 2024. SEC Chair Gary Gensler emphasized the importance of trust in financial markets, stating, "Well-functioning financial markets are built on trust." PCAOB Chair Erica Williams noted that the budget will help retain and attract talent to fulfill their investor-protection mission. The Sarbanes-Oxley Act of 2002 mandates SEC oversight of the PCAOB's budget and fees.

 

Accounting Today

CPA Practice Advisor

The FASB has introduced a proposed Accounting Standards Update (ASU) aimed at enhancing the financial accounting and disclosure of environmental credits and obligations. This initiative stems from stakeholder feedback indicating that GAAP lacks clear guidance on recognizing and measuring the growing volume of environmental credits driven by government regulations. The proposal outlines requirements for recognition, measurement, presentation, and disclosure for entities involved with environmental credits. Notably, FASB clarified that the ASU focuses solely on financial statement reporting and does not cover tracking actual greenhouse gas emissions. Public comments on Environmental Credits and Environmental Credit Obligations (Topic 818) will be accepted until April 15th 2025.

 

Journal of Accountancy

Navin Sethi has joined EisnerAmper as a tax partner in its financial services group, focusing on hedge, venture, and private equity funds. He specializes in providing tax services for high-profile partnerships, particularly in the cryptocurrency, digital assets, and cannabis sectors. The firm highlighted Sethi's expertise, stating he will enhance their capabilities in these rapidly evolving industries.

 

Bloomberg Tax

The Financial Stability Board (FSB) has issued recommendations aimed at mitigating risks associated with hedge funds and other non-bank financial intermediaries, which now represent nearly half of global financial assets. The FSB highlighted growth of approximately 130% in non-bank financial intermediation from 2009 to 2023. FSB Secretary General John Schindler said: "This growth comes with an increase in complexity and interconnectedness in the financial system, which, if not properly managed, can pose substantial risks to financial stability." The FSB's consultation report suggests that governments enhance their focus on non-banks, improve credit risk management, and establish frameworks to monitor financial stability risks. A final report is expected in mid-2025.

 

Reuters

Despite a healthy unemployment rate of 4.2% and a rising stock market, a recent AP-NORC poll indicates that many Americans, particularly Democrats, are feeling increasingly pessimistic about the economy following President-elect Donald Trump's election victory. About 70% of U.S. adults rate the economy as poor, a rise from 60% in October. Karen Claussen, a voter from Ohio, expressed her concerns, saying: “Next year, if Trump gets his tariffs, prices are going to go up and things are going to be more costly.” While Republicans remain skeptical about the current economic state, they are hopeful for improvement in 2025. The poll highlights a significant divide in economic perceptions, with lower-income households particularly worried about affording basic needs. As Trump prepares to take office, the uncertainty surrounding his economic policies raises questions about their potential impact on growth.

 

Chicago Tribune

Accounting researchers say they have uncovered a theoretically possible solution to simplify the tracking of Scope 3 greenhouse gas emissions up and down the value chain using smart contracts and non-fungible tokens on a blockchain platform, easing the carbon reporting process and allowing for increased automation. The work, by researchers from Auburn University and John Carroll University, outlined in an Accounting Review paper, involves a system that would take the form of a web-based connection that allows companies involved in a value chain to enter their emissions data. This data, with proper permissions, could then be accessed by third parties along the value chain who need to report on not just their emissions but those of their suppliers upstream and their customers downstream. Each component of a tangible asset would have an associated NFT minted by a self-executing smart contract once that component enters the value chain as a blockchain input. "This system creates a near real-time cradle-to-grave provenance for tangible assets and their associated emissions as they move through the value chain, and allows all emissions to be counted and claimed. Furthermore, all value chain participants can use this system to determine the total emissions associated with a product and their classification as Scope 1, 2, or 3 from their reporting vantage point," said the paper. 

 

Accounting Today

U.S. merger and acquisition activity remains on track to accelerate in 2025, despite signals from the Federal Reserve that it may slow the pace of trimming interest rates next year, according to PwC U.S. Deals Clients and Markets Leader Liz Crego. She said that the Fed's comments do not "materially" impact the Big Four firm's recent prediction that M&A activity will speed up next year due to “declining interest rates, large amounts of dry powder, the need for business model reinvention and shifting regulatory priorities.” The projected surge in M&A deals in 2025 comes after a year of “inconsistent recovery” due in part to uncertainty leading up to the November election, according to PwC’s recent analysis. During the first 11 months of 2024, there were 9,780 deals valued collectively at $1.05tn, up slightly from the same period a year earlier. “While caution over the past year was understandable and consistent with similar election cycles, PwC expects the recovery to pick up now that some sources of uncertainty have been resolved,” the report said.

 

CFO Dive

National healthcare spending increased 7.5% year over year in 2023 to $4.867tn, or $14,570 per person, according to data released Wednesday by the Centers for Medicare and Medicaid Services. Spending outpaced U.S. economic growth, rising an inflation-adjusted 4.4%, compared with GDP growth of 2.9%. Spending on retail prescription drugs had the biggest increase, rising 11.4% to $449.7bn after a 7.8% rise in 2022, largely due to the use of weight-loss and diabetes drugs. Spending for hospital care services totaled $1.5 trillion in 2023, rising by 10.4%, the highest growth in nearly three decades. Spending on clinical services increased 7.4%. Just over 92% of Americans were covered by some form of health insurance in 2023, up from a flat 92% in 2022.

 

Reuters

Wall Street Journal