November 5, 2021
What to expect in Washington (November 5)
Today is the day: House Democratic leaders plan to hold votes on the Build Back Better (BBB) Act (H.R. 5376) budget reconciliation bill and Bipartisan Infrastructure Framework (BIF). Progressives are comfortable with the BBB and no longer seek to hold up a vote on the Senate-passed BIF, meaning that measure can go to the President for his signature. Moderate Democrats have called for official estimates of the reconciliation bill before the vote and the Joint Committee on Taxation (JCT) released its revenue estimates yesterday, although the Congressional Budget Office (CBO) has yet to release its spending estimates (including revenue from increased IRS funding). Votes could wrap by sometime this afternoon, though Republicans are already demonstrating their displeasure with the bills by offering motions to adjourn, which require time-consuming floor votes.
A manager's amendment filed late last night includes surgical changes to the November 3 amendment, and is not wholly revised text. Among the changes is an increase in the state & local deduction cap to $80,000 through 2030. Bloomberg reported it would raise $14.8 billion in revenue over 10 years. Also, "On drug pricing, Democrats have agreed to give some drugs an extra year of exemption from price negotiations."
The JCT estimate showed a gap in revenue over IRS enforcement, which is to be estimated by the CBO along with many other spending items in the package. The Treasury Department released a statement showing the latest estimates by JCT, CBO, and Treasury of the revenue and savings provisions in the bill, saying, "The bottom line is that the Build Back Better Act under consideration in the House of Representatives will be fully paid for and reduce the deficit."
Ways & Means member Stephanie Murphy (D-FL) is one member reluctant to express support with some estimates uncertain and late changes to the bill text. She said in a Punchbowl report, "There are elements of the bill that are still being negotiated. So the text isn't yet set. I look forward to the point in time when it is and then I'd like to understand better how much the bill will cost the taxpayers."
The Wall Street Journal reported: "Mrs. Pelosi held meetings with various groups of House Democrats to resolve the final issues. President Biden called House Democrats on Thursday to encourage them to support the legislation when it comes to the floor, according to a person familiar with the calls. A trio of House Democrats had threatened to withhold their support for the legislation unless it included more expansive immigration measures. The group left a Thursday night meeting with Mrs. Pelosi saying they would continue to work on the issue, though not by altering the existing House bill."
The New York Times said: "Democrats could afford to lose as few as three votes from their side. Among the biggest issues were the cost and economic effects of the social safety net bill. A few centrists were also balking at supporting the package — which includes monthly payments to families with children, universal prekindergarten, a four-week paid family and medical leave program, health care subsidies and a broad array of climate change initiatives — before evaluating the fiscal impact of the latest, hastily assembled 2,135-page version of the legislation."
Timing — The House and Senate are scheduled to be in recess next week, which, along with a congressional delegation to the climate summit in Glasgow that includes Speaker Nancy Pelosi (D-CA), lends urgency to this week's process and today's vote. Senator Joe Manchin (D-WV), whose concerns over the bill's impact on the debt helped shape the revised White House framework and House bill, has said senators would negotiate into next week and potentially be in position for Senate consideration the week of November 15, as Leader Chuck Schumer (D-NY) has targeted, and completion of the bill by Thanksgiving.
House leaders in recent days demonstrated less of an inclination toward coordination with the Senate, where changes to any House-passed bill still appear likely, as a bicameral agreement at this stage appeared unrealistic. The Senate is near certain to change the bill due to reconciliation rules allowing for simple-majority passage and the vote-a-rama that caps debate, where the SALT relief could be a target for amendments. Senator Manchin suggested major changes are possible, saying on Fox News Special Report Wednesday, "They're working off the House bill. That's not going to be the bill I work off of."
Health - On November 4, the Biden administration issued two highly anticipated and controversial rules requiring vaccinations for large employers and health care workers. The Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS), which covers 84 million employees, requires employers with 100 or more employees to ensure each of their workers is fully vaccinated or tests for COVID-19 at least once a week. An interim final rule (IFR) with comment period from the Centers for Medicare & Medicaid Services (CMS) requires that health care workers at facilities participating in Medicare and Medicaid are fully vaccinated, with no testing option. Upon release of the rules, President Biden issued a statement touting the mandates as critical to defeating the COVID-19 pandemic.
Today, November 5 (12:00 p.m. ET), is the EY Webcast, "Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments." Register.