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February 8, 2021

What to expect in Washington (February 8)

New developments regarding the Democratic COVID relief/stimulus bill: President Biden thinks a minimum wage increase won't fit within budget reconciliation rules and will likely be omitted from the package; his "next phase" address to Congress may wait until this package is enacted; House Ways & Means Committee Chairman Richard Neal (D-MA) may today (Monday) release a proposal to mail direct cash benefits to families with children and income below certain thresholds; and progressive Democrats are challenging the potential for tightening income thresholds for $1,400 direct payments.

Timing: Ways & Means Chairman Neal will as soon as today release the Committee's portion of the COVID relief/stimulus bill — instructions to the Committee account for about half of the total $1.9 trillion envisioned by Biden — and he plans a multiday markup Wednesday-Friday. Speaker Nancy Pelosi (D-CA) wants to send a bill — budget reconciliation elements from a dozen committees will be assembled by the House Budget Committee and voted on as a single package — to the Senate within the next two weeks, she said Friday.

Democrats want new relief in place before the mid-March expiration of pandemic unemployment benefits, and the suggestion that the package may need to be cleared before President Biden details his broader agenda could create additional urgency. There is also the overarching desire among Democrats to act fast and big to respond to the pandemic, to avoid the type of inadequate recovery bill they recall from 2009.

The House Education & Labor Committee will begin its reconciliation markup on February 9 at 3 p.m.

The Washington Post first reported on Neal's plan for payments to families with children, saying the IRS "would provide $3,600 over the course of the year per child under the age of 6, as well as $3,000 per child of ages 6 to 17," phased out for individuals earning $75,000 per year and couples jointly earning more than $150,000. The price tag for this year's benefit is $120 billion and "it is also unclear whether Democrats can pass the new child benefit through the Senate under the rules of reconciliation."

In a CBS interview airing February 5, President Biden said of the minimum wage increase to $15/hour under reconciliation, "I don't think it's going to survive. … My guess is it will not be in." Reconciliation poses several tests, including that provisions have a revenue impact, don't increase the deficit beyond the budget window, and can't affect Social Security. In a follow-up airing prior to the Super Bowl, President Biden said regarding vaccination, "we've ramped up every way we can," and that, "I think it's time for schools to reopen safely."

The President has said the $1,400 amount for direct payments under his plan is non-negotiable, but income thresholds for qualification are. Senate Budget Committee Chairman Bernie Sanders (I-VT) has repeatedly taken issue with a lower income threshold, including saying on CNN yesterday, "What we need to do is have a strong cliff, so it doesn't kind of spill over to people making $300,000. … But to say to a worker in Vermont or California or anyplace else that, if you're making $52,000 a year, you are too rich to get this help, the full benefit, I think that that's absurd. And it's also, from a political point of view, a little bit absurd that you would have, under Trump, these folks getting the benefit, but, under Biden, who is fighting hard for the working class of this country, they would not get that full benefit."

Sanders also said he is committed to trying to move the minimum wage increase through reconciliation: "As chairman of the Budget Committee, we have a room full of lawyers working as hard as we can to make the case to the parliamentarian that, in fact, raising the minimum wage will have significant budget implications, and, in fact, should be consistent with our reconciliation rules."

Looking forward: President Biden is expected to detail his "Build Back Better" plan in an address to Congress sometime over the next several weeks (not called State of the Union in a President's first year, by the way), and Treasury Secretary Janet Yellen has suggested a corporate tax rate increase to 28% could be proposed. White House press secretary Jen Psaki said last week, of the COVID relief/stimulus bill: "There's urgency, as you've heard the President say and all of us say, in moving this package forward. … He also has plans to announce a Build Back Better agenda. And our plans would be to do that once we are at a point where it's — that can be the next priority. … We don't have a date yet. It depends on when that date is and what the focus will be. And not working on it quite yet."

The Senate is conducting an impeachment trial this week but still holding some hearings, including a Budget Committee hearing on the nomination of Neera Tanden to be Director of the Office of Management and Budget. Democrats suggest the trial won't last long, and Senators will also be making progress on nominations and COVID relief/stimulus. Senator Chris Murphy (D-CT) said on Fox February 7: "We're going to do our constitutional responsibility and hold a trial. It won't last very long. We are going to move forward nominees and we are going to continue to push forward COVID relief legislation. The Senate can do all of those things, and we will."


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