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The Senate approved the FY2021 budget resolution (S.Con.Res. 5) early this morning (Friday, around 5:30 a.m.) after an overnight session, unlocking the budget reconciliation process for President Biden's $1.9 trillion COVID relief/stimulus plan and allowing it to potentially, like the resolution itself, pass the Senate with 50 votes plus the tie-breaking vote of Vice President Kamala Harris. (The House, which passed its own version of the resolution on Wednesday, February 3, will vote on the Senate version around lunchtime today, and budget resolutions are not signed by the President.)

What's next? The House Ways & Means Committee is planning a multiday markup of COVID relief/stimulus provisions under its jurisdiction Wednesday-Friday next week, and other committees will consider their portions. Full House consideration of a reconciliation bill may occur the week of February 22, and Democrats hope to have the COVID relief/stimulus legislation enacted before the mid-March expiration of pandemic unemployment programs. (Note, the Senate is conducting an impeachment trial next week.)

Speaker Nancy Pelosi (D-CA), Ways & Means Committee Chairman Richard Neal (D-MA), and other committee chairs that will be key to writing the COVID relief/stimulus bill are part of a White House meeting with President Biden this morning. A similar meeting with Senate Democratic leaders and committee chairs was held earlier in the week. Key provisions under the Biden plan are $400 billion to combat the pandemic, $350 billion in state and local funding, $1,400 direct payments, and a $400/week UI add-on and extension of pandemic unemployment programs through September.

Hundreds of amendments were filed to the Senate budget resolution and not voted on, including a few related to international tax, but some tax amendments were considered. (None of the amendments are binding, though they express the views of senators and punctuate partisan divides.) Senator John Thune's (R-SD) modified "mobile workforce" amendment on the authority of states and jurisdictions to tax certain income of employees for employment duties performed in other states or jurisdictions was adopted by voice vote.

Some of the amendments were TCJA-focused. Senator Chuck Grassley's (R-IA) amendment to block any increase in or elimination of the $10,000 limitation on the state and local tax (SALT) deduction if it is projected to result in a windfall for high-income individuals failed, as did Senate Finance Committee Ranking Member Mike Crapo's (R-ID) amendment to make permanent TCJA provisions for individuals and small businesses.

Tax

A CNBC article discussed what to expect from the Finance Committee now that Democrats are in control and Senator Elizabeth Warren (D-MA) has joined the Committee, and noted that Chairman Ron Wyden (D-OR) has proposed mark-to-market taxation of capital gains and Senator Warren has proposed a wealth tax. It said: "At first, the committee will focus on the messaging needed to facilitate tax reform — including an emphasis on how the rich got richer during the Covid-19 crisis. 'You've got to be able to lay that foundation,' Wyden said. 'You've got to be able to describe how people who are very, very wealthy billionaires … how is it that they can make these huge sums' during the pandemic, he added."

Politico this morning: "Business advocacy groups are quickly mobilizing to ensure their member companies keep tax refunds Congress made them eligible for less than a year ago. A few dozen organizations are circulating a draft letter of opposition they'll send soon to congressional leaders, in an attempt to pressure them against unraveling the tax benefit in the next Covid aid package." Some Democrats are calling for the rollback of CARES Act net operating loss (NOL) and excess business loss provisions.

On tap for next week: on Wednesday, February 10 (at 10:00 a.m.), the Senate Budget Committee will hold a hearing on the nomination of Neera Tanden to be Director of the Office of Management and Budget.

Today, February 5, is the EY Webcast, "Tax in the time of COVID-19" (at 12:00 p.m. ET). The coronavirus (COVID-19) and the resulting economic crisis have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) elections, US economy and tax policy; (ii) what's happening at the IRS; and (iii) breaking developments. Register.

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