House tax-writing committee passes COVID-19 rescue plan

The House Ways and Means Committee on Thursday completed vetting its part of the $1.9 trillion COVID-19 “rescue” package. Members voted 25-18 to advance it out of committee. Key provisions include:

• A $1,400 refundable tax credit for each family member, which shall be paid out in advance payments. The credit phases out between $75,000 and $100,00 of adjusted gross income ($112,500 and $150,000 for head of household filers and  $150,000 and $200,000 for joint filers) based on information on 2019 or 2020 tax returns.
• Extending the Employee Retention Credit from July 1, 2021, to January 1, 2022. 
• Extending temporary federal unemployment and benefits through August 29, 221, and increasing the weekly enhanced benefit from $300 to $400. 
• Expanding the Child Tax Credit to $3,000 per child 17 years old and under ($3,600 for children under 6) and makes it fully refundable and advanceable. 
• Expanding the Child and Dependent Tax Credit to allow families to claim up to half of their childcare expenses. 
• Enhancing the Earned Income Tax Credit for workers without children by nearly tripling the maximum credit and extending eligibility. 
• Reducing health care premiums for low- and middle-income families by increasing the Affordable Care Act’s (ACA) premium tax credits for 2021 and 2022. 
• Excluding Restaurant Revitalization Grants received from the Administrator of the Small Business Administration in the form of a Restaurant Revitalization Grant from gross income. 

The Committee’s section-by-section summary of the provisions and the legislative text of the legislation can be found here.

The bill now travels to the House Budget Committee where it will be added to the larger rescue package that will include legislation from eleven other committees. All House committees are expected to complete vetting their bills by February 16, 2021. The Budget Committee will then combine these bills and they will become the $1.9 trillion rescue package.

The House is expected to vote on this rescue package during the week of February 22^nd. Passage is expected. After action in the House, the package will go to the Senate. Once the rescue package is in the Senate, it is not expected to be vetted by Senate Committees. Instead, it will go straight to the Senate floor where it will be subjected to amendments, most likely several of them.

Senate passage of the rescue package is contingent on it getting a simple majority of support, because of reconciliation instructions, as Eide Bailly explains here. This means that the bill can pass the chamber with only Democratic support, which includes the backing of Vice President Kamala Harris. However, getting support from all Senate Democrats might require changes to the rescue package that is expected to pass the House; mainly, raising the minimum wage to $15.00 over a period of years. There are a handful of Democratic Senators who do not support this measure and it might need to be jettisoned from the package to secure Senate passage. 

If the Senate modifies the legislation, then the House must approve those changes, which is expected to occur in quick fashion so that the legislation can be enacted by mid-March. The goal by Democrats is to have the entire legislation approved by Congress and signed into law by mid-March so that unemployment benefits, like the enhanced payment, benefits to gig workers, and the extension of coverage, which are all currently set to expire on March 14, 2021, are extended before they perish.

House Ways and Means Committee rescue plan

In vetting its rescue plan, the House Ways and Means Committee divided its legislation into nine parts, deemed “subtitles,” and lawmakers vetted each subtitle individually.

The vetting process, known as a “markup,” allows Committee Members to amend the bill. (The term “markup” refers to lawmakers “marking up” a bill by offering amendments to it.) The Committee’s markup lasted two days, and Democrats did not offer any amendments. It was rumored that Rep. Thomas Suozzi (D-N.Y.) or Rep. Bill Pascrell (D-N.J.) would propose an amendment repealing or modifying the limitation on the state and local tax deduction, but it never occurred.

Since its introduction, the legislation has barely changed, other than minor and clerical changes. Republicans offered several amendments,which all failed along party lines. Nearly all Republican amendments, if adopted, would have increased the deficit beyond what is allowed under the reconciliation rules. 

Without reconciliation, it would require 60 votes to pass the rescue package from the Senate, instead of a simple majority. It is highly unlikely that ten Senate Republicans would join 50 Senate Democrats in supporting this bill, so this procedural maneuver is vital to ultimately enacting the rescue package.