Tax Notes logo

PPP Deductibility Backer Cornyn Survives Challenge

Posted on Nov. 5, 2020

Texas Republican Sen. John Cornyn’s call to allow a deduction for Paycheck Protection Program loan expenses may fall on friendlier ears under a new administration.

Cornyn, a member of the Finance Committee, handily defeated Democratic challenger M.J. Hegar in the November 3 election.

A new six-year term on Capitol Hill will give Cornyn more time to push the Small Business Expense Protection Act of 2020 (S. 3612), which would allow businesses to deduct expenses associated with their PPP loans.

The legislation has the backing of Finance Committee Chair Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., as well as House Ways and Means Committee Chair Richard E. Neal, D-Mass.

Cornyn has made it no secret that his desire to see the bill become law has been thwarted by the Trump administration, which claims that allowing the deduction would allow businesses to double-dip. Cornyn told Tax Notes in September that while he respects Treasury Secretary Steven Mnuchin, he doesn't see eye to eye with him on this issue.

“We need to allow for additional capital in the market,” Cornyn said, explaining that businesses would benefit greatly from the deduction. Besides trying to include the measure in a stimulus relief package, Cornyn tried to “hotline” the bill — a procedure used to help gauge interest in passing a bill by voice vote.

Armed with the support of the two most powerful Democratic taxwriters, Cornyn would face less resistance to pass his measure if former Vice President Joe Biden wins the presidency.

Not Many Surprises

The makeup of the Finance Committee is unlikely to change much once all the votes have been tallied. Steve Daines, R-Mont., retains his seat, having defeated his challenger, Montana Gov. Steve Bullock (D).

The Ways and Means Committee composition may change the number of seats allocated to each party after Republicans flipped several seats, but the committee's leadership is expected to stay the same.

Neal ran an uncontested election in the 1st Congressional District of Massachusetts, and ranking member Kevin Brady, R-Texas, easily defeated his Democratic challenger in the 8th District. At press time, Rep. David Schweikert, R-Ariz., was trailing Democrat Hiral Tipirneni in the 6th District race. Schweikert has been a member of the Ways and Means Committee since January 2017.

Copy RID