February 12, 2021
What to expect in Washington (February 12)
After a two-day markup, the Ways & Means Committee approved along party lines a COVID relief package — with direct payments, CTC/EITC/Child Care tax credit expansions, COBRA subsidies and ACA tax credit enhancements, and pension relief — that is half of the budget reconciliation bill reflecting President Biden's American Rescue Plan. Other committees are marking up portions of the plan under their jurisdictions.
What's next? House Speaker Nancy Pelosi (D-CA) said February 11, "We hope to finish our markups in committee this week, and then send it to the Budget Committee next week for them to work their will on it, then to the Rules Committee, and then to the floor, and we hope to have this all done by the end of February, certainly, on the president's desk in time to offset the March 14th deadline, where some unemployment benefits will expire." The Budget Committee assembles the bill. Following the House vote, the package could go straight to the Senate floor (bypassing committees) for expediency's sake. If the Senate includes amendments, the two chambers must work out differences in order to produce a final bill.
During the Ways & Means markup, no Republican amendments were approved, including Rep. Tom Rice's (R-SC) proposals for a Healthy Workplace Tax Credit and tax incentives for domestic pharmaceutical and medical supply production. Other tax issues were discussed but not the subject of amendments. Rep. Adrian Smith (R-NE) noted the provision to repeal section 864(f), creating an elective worldwide interest expense allocation regime, had nothing to do with COVID. The repeal of the worldwide interest allocation rules — enacted in 2004 and subsequently delayed before taking effect on January 1 of this year — would raise $22 billion over 10 years. Rep. Lloyd Doggett (D-TX) said he wanted to roll back the CARES Act excess business loss and NOL carryback provisions but would nonetheless support the bill for its merits.
There were some tensions with the bill moving solely with Democratic support, but also comity, with one Republican (Kelly) lauding Chairman Richard Neal's (D-MA) willingness to work with members, and Neal noting the challenges of a semi-virtual markup but also the sincerity and high-mindedness of deliberations.
In the Senate, a focus will be on parliamentarian rulings on whether provisions stay within the boundaries set by the reconciliation process, including the minimum wage increase. Speaker Pelosi said yesterday the wage increase will be in the budget reconciliation bill sent over by the House, and Senate Majority Leader Chuck Schumer (D-NY) has said he is working to ensure it can stay in. It will be difficult given the opposition from Democrats Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV). "The minimum wage provision is not appropriate for the reconciliation process. It is not a budget item. And it shouldn't be in there," Sinema said in a Politico story posted this morning. Manchin has said he wants something closer to $11/hour.
Of the House bill, the Wall Street Journal noted, "The CTC plan to provide a $250-$300 per child monthly benefit to families comes with a nearly $400 million one-year bump to IRS funding, ostensibly to ease the administrative burden of a major new program."
White House — President Biden and Vice President Harris February 11 met with Senate EPW Chairman Tom Carper (D-DE) and Ranking Member Shelly Moore Capito (R-WV), as well as Senators Ben Cardin (D-MD) and James Inhofe (R-OK), senior members who may head the Committee's Transportation & Infrastructure panel. Carper tweeted, "I'm putting together a bipartisan bill that reduces greenhouse gas emissions, creates jobs to strengthen our economy, and moves us to a cleaner, safer future. There is no time to waste." Inhofe noted that he has long known Biden and worked on highway bills with him. Last year, Republicans criticized a House Democratic infrastructure bill for including a green energy title.
A lengthy New York Times magazine feature reporting on the genesis of the Biden administration's Build Back Better approach to combat climate change and boost employment through green energy jobs noted the role of a UAW paper on EVs. "When aides eventually described the ideas in the U.A.W. paper, Biden became animated. The notion that spending billions to upgrade plants and subsidize car-buying could save the livelihoods of today's workers — not merely create jobs for their kids — excited him. It promised a marriage of present and future," the article said.
President Biden said yesterday: "Just this afternoon, we signed the final contracts for 100 million more Moderna and 100 million more Pfizer vaccines. We're also able to move up the delivery dates with an additional 200 million vaccines to the end of July, faster than we expected."
Budget — First-year presidents' budgets can be in "skinny" form, then detailed later, in the spring, and the expectation is that the Biden administration will bring back Treasury "green books" that detail tax proposals. White House Press Secretary Jen Psaki said February 10 that "there were some challenges that came about during the transition in terms of a bit of intransigence from the outgoing administration and lack of cooperation, as it related to OMB on the budget process. So, we expect there to be a delay … in the release of his first budget. I don't have an exact timeline of when that will be though." For historical reference, President Trump submitted a "skinny budget" for FY2018 on March 16, 2017, followed by a detailed proposal on May 23, 2017; President Obama outlined the FY2010 budget on February 26, with a detailed proposal and "green book" released on May 7, 2009.
The Senate impeachment trial could wrap up as soon as this weekend.