January 27, 2021
What to expect in Washington (January 27)
Senator Chuck Schumer (D-NY) told his members to be prepared to vote on a budget resolution as early as next week, a sign that Democrats want to be ready to move President Biden's COVID/stimulus bill through budget reconciliation if Republican support doesn't materialize soon. "In keeping our options open, on our caucus call today, I informed senators to be prepared that a vote on a budget resolution could come as early as next week," Schumer said, as reported by MarketWatch.
There had already been signs the House could begin processing a budget resolution next week. The two chambers need to agree on the same resolution — in this case, the FY2021 resolution, which has not been used by Congress — with reconciliation instructions in order to use budget reconciliation to have a Senate bill pass by a simple majority, as opposed to the 60-vote filibuster threshold. (A second reconciliation bill in calendar 2021 is possible using the FY2022 budget resolution). Committees could be focused on writing reconciliation during the second and third weeks in February, according to a letter to members from House Majority Leader Steny Hoyer (D-MD), in which he designated them "Committee Work Weeks" (i.e., no floor votes). "We will need to move swiftly on additional COVID-19 relief legislation," he said.
Democrats, including Senator Schumer, are setting up the March expiration of unemployment and other programs as a deadline. (There is also possibly the objective of completing Senate action on a budget resolution prior to the start of the impending impeachment trial.) Of the deadline, White House press secretary Jen Psaki said January 26, "[T]he way the president thinks about this is what the cost of inaction is. So, if you look ahead, it's critical … that we don't get anywhere near the March cliff, which would mean the end of eviction and foreclosure moratoriums, the end of $300 additional UI assistance." (Under year-end 2020 legislation, the Pandemic Unemployment Assistance (PUA) program, Federal Pandemic Unemployment Compensation program (FPUC), and $300 per week supplement expire March 14, 2021.)
Some Republicans are critical of Democrats potentially turning to reconciliation. Senator Rob Portman (R-OH) — who announced January 25 that he will not run for re-election in 2022 — was quoted as saying it "would be not just a big mistake at this stage at the start of this administration, but irresponsible given what's happened with the COVID-19 package. We're willing to work with them." Portman is part of a group of 16 centrist senators that have opened a dialogue with the Administration on a next COVID/stimulus bill. Bloomberg reported another member of the group, Senator Todd Young (R-IN) — who, like Portman, is a member of the Finance Committee — as saying he hoped the group could meet in the next 24 to 48 hours to work on bipartisan relief bill, which, if targeted, could come together in "short order."
Senate Budget Committee Chairman Bernie Sanders (I-VT) was dismissive of reconciliation criticism, on the grounds that Republicans — when they were in control of the White House, House and Senate (all three are required for a party to pursue the process) — used it to try for Affordable Care Act (ACA) repeal and to pass the Tax Cuts & Jobs Act (TCJA). "My Republican colleagues used reconciliation to give almost $2 trillion in tax breaks to the rich and large corporations in the midst of massive income inequality … try to throw 32 million people off the health care they had … [and] allow for drilling in the Arctic wilderness," Sanders said in Punchbowl. "You know what? I think we can use reconciliation to protect the needs of working families."
While there have been questions raised over how the minimum wage increase to $15/hour in the Biden stimulus plan can fit within budget reconciliation rules, Democrats including House Budget Committee Chairman John Yarmuth (D-KY) and Senate Democratic Whip Dick Durbin (D-IL) have suggested there will be an effort to include the provision. And there may be a tax angle. The Wall Street Journal said the approach to fitting the provision within the rules may involve "crafting the minimum-wage increase as a tax against companies that don't pay the wage." Additionally, "some lawmakers argue that a minimum-wage increase itself has enough of a budgetary impact to pass muster with the Senate parliamentarian, who adjudicates which policy provisions can be included in the reconciliation process."
The two parties are poised to come together on another controversial issue: organizing the Senate amid the possibility Democrats could eventually move to end the legislative filibuster and modeling a power-sharing agreement after the one in 2001, the last time the Senate was split 50-50. Senate Republican leader Mitch McConnell (R-KY) said, "two Democratic Senators confirmed they will not provide the votes to eliminate the legislative filibuster," which "will let us move forward with a 50-50 power-sharing agreement containing all the elements of the 2001 model. Because it will sit on the same foundation."
He followed that up with a warning to Democrats that if they do move to get rid of the filibuster, the "body would grind to a halt like we've never seen" and Republicans could employ procedural tactics to halt business in the chamber, including challenging whether a quorum is present and denying unanimous consent requests. "I'm glad we've stepped back from this cliff. Taking this plunge would not be some progressive's dream. It would be a nightmare. I guarantee it," Senator McConnell said.
Deputy Assistant Treasury Secretary for Tax Policy Mark Mazur said during an ABA conference that he wants to bring back Treasury "green books," which during the Obama and previous administrations included detailed lists of tax proposals. "That's something I feel pretty strongly about — I think it's an important contribution to the public debate," he said in Tax Notes. (The Trump administration, which sought and achieved tax reform in Year 1, didn't publish any green books.)
On prospects for retroactive tax increases: "Mazur said that's a tough one to answer, but noted that taxpayers often change their behavior based on the tax law. With retroactive changes, it's much more difficult for that happen, so having tax increases apply retroactively isn't normally the first choice, he said. But retroactive tax increases have been made in the past, and if that's the case, it's probably better to enact the provision earlier in the year, he said."
President Biden's expected executive actions on health care set for as early as Thursday were previewed in a Washington Post story that said they aim to "to reopen federal marketplaces selling [ACA] health plans and to lower recent barriers to joining Medicaid."