Congress is about to come back from recess - and D.C.'s power to set its own taxes is first on the chopping block

The House went on August recess with a loaded gun pointed at D.C.'s checkbook. Now it's coming back.

On July 22, the House Committee on Oversight and Government Reform approved the D.C. Taxing Authority Review Act - H.R. 9720 - on a 23-to-18 vote along party lines. The measure would require congressional approval before the District could raise any taxes or fees, a new fight over Washington's ability to govern itself that cleared committee and headed to the full House. The House was in recess until late August, meaning the timing for a floor debate and vote remained unset. That window is closing right now.

For D.C. residents, the stakes are direct and concrete. Think about what taxes actually pay for: the police officers walking your block, the schools your kids attend, the library branches, the housing vouchers, the pothole crews. All of it runs on local revenue. If this bill becomes law, the District's tax code could only change after Congress affirmatively approves it - replacing the system under which tax measures become law unless Congress passes a resolution blocking them during a review period. That is a total reversal of how home rule has worked for fifty years.

What the bill actually does - and doesn't do

Right now, D.C. runs its finances the way most city governments do. Under current law, the D.C. Council can approve tax changes, which then go into effect unless they are blocked by Congress within 30 days. The new bill flips that entirely. Tax changes wouldn't take effect unless Congress passes a joint resolution of approval within 60 days after receiving the policy update. No approval? The measure dies.

The scope is sweeping. Title 47 of the D.C. Code - which the bill covers - includes virtually every way the city currently raises revenue to fund public investments, from the personal and corporate income tax to the general sales tax, and even the property taxes that are the historical cornerstone of local taxing power in the U.S.

Critically, it's not just tax hikes. The bill would take away D.C.'s authority over its tax code in both directions - D.C. could not impose, increase, cut, or eliminate a tax without congressional approval. That means a future council couldn't even simplify a business license fee or grant a senior tax relief without getting 535 members of Congress to weigh in first.

Council Chairman Phil Mendelson put it bluntly in a letter to Rep. James Comer, who chairs the committee and introduced the bill. 'The bill would straitjacket the District because it would paralyze our tax code,' Mendelson wrote. 'If Congress cannot approve our judges, and could not fix last year's Continuing Resolution error, then it is highly unlikely to affirmatively approve D.C. tax bills.'

Why Comer wrote it - and who's backing him

Rep. James Comer, Republican of Kentucky and chair of the House Oversight Committee, introduced H.R. 9720 on July 16 - about a month after D.C. residents voted for progressive candidates in the primary election. The timing was not subtle. Comer pointed specifically to mayor-elect Janeese Lewis George, who supports implementing a business activity tax - a measure the D.C. Council has funded a study on to see if and how it could work in the District.

He also cited the Council's new 20-cent fee on third-party food deliveries. That fee found him at least one corporate ally. DoorDash had been feuding with the city since the Council approved that delivery fee, and in a letter sent to Comer on July 22, the company's head of North American policy, John Horton, expressed support for the Taxing Authority Review Act.

House Republicans argued that the D.C. Council had advanced proposals to impose new taxes on businesses and residents even as the District faces a budget shortfall of more than $1 billion, including a potential Business Activity Tax on corporations and a 3 percent tax on investment income. Comer himself was blunt: 'Radical D.C. Democrats want to solve their spending problem by reaching deeper into taxpayers' pockets and driving further on the path to socialism. Let's be clear: higher taxes will not fix the financial mess they created.'

The financial risk nobody's talking about enough

Beyond the politics is a quieter threat: D.C.'s credit rating. According to the D.C. Fiscal Policy Institute, the bill would pose a risk to D.C.'s credit ratings. 'Credit downgrades would create higher costs for D.C., putting an even bigger squeeze on the District's budget and ability to maintain healthy finances as it has for the past three decades,' wrote DCFPI Executive Director Erica Williams.

Bond markets price in certainty. A city that can't guarantee its own tax code is stable - because any change requires an act of Congress - is a city that carries more financial risk. Higher borrowing costs hit everything from school construction bonds to infrastructure repair contracts.

The proposal is especially notable because Congress already has effective veto power over D.C.'s taxing authority, limiting the city's capacity to self-govern in a way that doesn't apply to any other jurisdiction in America. The Republican majority exercised that power earlier in 2026: Congress passed a law that explicitly reversed D.C.'s choice to decouple from certain provisions of Trump's 2025 federal tax cut - a choice made by dozens of states in the past year. This bill would make that kind of intervention routine, not exceptional.

The bill would give members of Congress from Kentucky, Texas, and everywhere else in the U.S. an extraordinary new say over taxes paid by people who have no voting representation in Congress. That is the core democratic problem, and it's one that applies whether you support the D.C. Council's fiscal choices or not.

What the District's own officials are saying

Del. Eleanor Holmes Norton called it the gravest attack on home rule she has seen. 'The most consequential rollback of D.C.'s home rule authority in modern history,' she said after the committee vote.

At-large Councilmember Robert White, who ran for mayor in this cycle, went for the jugular. 'This bill would be devastating,' White said. 'It would let a Congress that can't even keep its own government open decide whether D.C. can fund its own police, schools, and services. Our budget would become a request we send to Congress that dies the moment they ignore it.'

The opposition from within the city's own government has been remarkably unified - across the ideological spectrum and between the outgoing mayor and the incoming one. D.C. leaders called the bill an attack on home rule; meanwhile, some members of Congress said Congress can't handle its own budget and shouldn't try to take over D.C.'s. The top Democrat on the Oversight Committee, Rep. Robert Garcia of California, called the bill 'a direct attack' on the District's 700,000 residents, and noted it was the 20th piece of legislation the committee had brought up to target D.C. sovereignty.

Mayor Muriel Bowser, who has her own serious quarrel with the Council over the FY2027 budget she returned unsigned in late July, has still pushed back against the bill. The internal budget fight and the congressional threat are separate tracks - but they are feeding each other in real time, with Republicans in Congress pointing to the Council's spending decisions as justification for stripping its fiscal powers.

The road ahead: recess ends, floor vote looms

Under the new legislation, both the U.S. House and the U.S. Senate would be required to vote and explicitly approve any proposed D.C. tax change before it could go into effect. The bill still needs a full House vote, then Senate passage, then a presidential signature. Its passage through the Senate remains far from certain. But in this Congress, that is not the same as saying it's dead.

The House returns from recess this week. The D.C. Council returns from its own summer recess in mid-September. Between now and then, the city's representatives - all of whom lack a vote in either chamber - are essentially spectators to a process that could permanently restructure who controls D.C. finances.

For Lewis George, who won the Democratic mayoral primary and faces essentially no serious general-election opposition in November, the bill lands at the worst possible moment. She has publicly supported exploring a business activity tax - exactly the kind of new revenue mechanism that would require congressional sign-off under H.R. 9720. The bill doesn't just constrain the current Council; it pre-emptively clips the incoming mayor's fiscal options before she even takes office in January.

What D.C. Residents Should Watch

• House floor scheduling: The House returns from recess this week. Watch whether House leadership schedules H.R. 9720 for floor consideration - that's the next concrete procedural step. If it gets a vote date, the debate accelerates fast.
• Senate prospects: The bill's passage through the Senate remains far from certain. Watch whether any Senate Republican picks it up and introduces a companion bill - that's the signal it has real momentum.
• D.C. Council's September return: The Council comes back September 16. Expect a formal legislative response - possibly a resolution opposing the bill or a push for Mendelson to press D.C.'s congressional allies harder.
• The FY2027 budget in congressional review: The budget headed into congressional review after Bowser declined to sign it. That review period runs concurrently with the H.R. 9720 debate, and Republicans in Congress now have two simultaneous openings to intervene in D.C.'s finances.
• Lewis George's tax agenda: The mayor-elect has flagged the business activity tax as a potential future revenue source. If H.R. 9720 passes, that option essentially disappears unless Congress votes to allow it - a measure the D.C. Council has so far only funded a study on.
• DCFPI credit-rating analysis: Watch for any formal rating-agency response to the bill's prospects. A downgrade warning from Moody's or S&P, even a preliminary one, would change the political math in the Senate quickly.

Sources

• WJLA / 7News: Mayor Bowser pushes back as Congress debates bill that would curb DC's taxing power
• WJLA / 7News: Could Congress take over DC tax decisions?
• Washington City Paper: House Committee Advances the D.C. Taxing Authority Review Act
• Washington Informer: D.C. Home Rule Faces New Test as House Committee Advances Tax Authority Bill
• DC News Now: Bill aimed at blocking DC from imposing tax hikes advances through House committee
• FOX 5 DC: House committee passes bill restricting D.C.'s power to raise taxes
• WTOP: Mayor cites '$837 million fiscal cliff' as she declines to sign DC budget
• The Georgetowner: Bill Limiting D.C. Tax Power Advances to House
• Institute on Taxation and Economic Policy: Congressional Republicans Say D.C. Shouldn't Be Allowed to Run Its Own Tax System
• House Committee on Oversight and Government Reform: Chairman Comer Introduces Legislation to Stop D.C. Tax Increases
• Congress.gov: H.R. 9720 - D.C. Taxing Authority Review Act