A bicameral group of lawmakers released a framework to jump-start negotiations for a coronavirus relief package that includes Paycheck Protection Program deductibility, while a group of senators sought to include tax relief for brewers in a must-pass spending bill.
The group of Senate and House lawmakers, led by Sens. Mitt Romney, R-Utah, and Joe Manchin III, D-W.Va., on December 1 called for passage of a relief bill before the year’s end as COVID-19 cases soar. They said their proposal would cost about $908 billion and acts as a compromise between what Democrats and Republicans have put forward.
The group, made up largely of moderate lawmakers, including Senate Finance Committee members Bill Cassidy, R-La., Mark R. Warner, D-Va., and Maggie Hassan, D-N.H., urged leadership to take up a measure before they go home for the holidays. “We have a deep, deep desire to get something done before we leave,” Manchin said.
To appease Senate Majority Leader Mitch McConnell, R-Ky., lawmakers said there would be temporary coronavirus liability relief until states get around to drafting their own.
The proposal would also give state, local, and tribal governments $160 billion and provide an additional $180 billion in unemployment insurance. It would boost the PPP — created by the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) to provide businesses with tax-free loans — by $288 billion and allow for the deductibility of expenses paid with PPP loans.
The proposal to make some PPP loans deductible has bipartisan and bicameral support and widespread support in the business community. Groups such as the U.S. Chamber of Commerce and the National Restaurant Association have been lobbying Congress to make additional capital available to small businesses that took PPP loans.
But the group of lawmakers introducing the framework say they aren't sure whether it will get support among congressional leaders.
Treasury Secretary Steven Mnuchin told Senate Banking Committee members during a December 1 hearing that he has been speaking with McConnell and House Minority Leader Kevin McCarthy, R-Calif., about pushing through a relief measure during the lame-duck session. “We all believe there should be targeted fiscal response,” he said.
Mnuchin also told lawmakers that he will be resuming calls with House Speaker Nancy Pelosi, D-Calif., regarding a relief package.
McConnell’s More of the Same
McConnell took no part in the creation of the bipartisan measure rolled out earlier in the day, instead telling his caucus that he would be releasing another targeted response bill that could be signed by President Trump as soon as the end of the day.
A framework of that targeted relief bill includes familiar proposals such as liability relief for businesses. It would also continue the small business loan program to allow qualifying businesses to receive another round of loans.
McConnell’s most recent proposal further lowered the year-over-year drop in quarterly receipts a businesses needs to show to qualify for a second loan from 35 percent to 25 percent. Small businesses and the restaurant industry have been urging lawmakers to drop the number from 35 percent for months, arguing that it was still too steep.
McConnell’s bill would also make business lunches 100 percent tax deductible, an idea that was quickly panned by Democrats. “There are upwards of 150,000 COVID cases per day and miles-long lines at food banks nationwide, and Leader McConnell wants to do tax breaks for three-martini lunches and broad legal immunity for his corporate donors,” Finance Committee ranking member Ron Wyden, D-Ore., said in a statement.
The idea was first offered by fellow Finance Committee member Tim Scott, R-S.C., in his Supporting America’s Restaurant Workers Act (S. 4319).
As in the other “skinny” relief bills proposed by McConnell, this one would expand section 529 education savings plans to allow for home-schooling and elementary and secondary school expenses and double the $300 above-the-line deduction for charitable contributions that taxpayers can claim for 2020.
Government Funding Bill
Any deal struck for a relief bill will likely be attached to a must-pass government funding bill, according to McConnell.
Lawmakers have been working to find common ground before a December 11 deadline, but will see colleagues trying to attach other measures, including tax extenders, to the spending bill.
A group of 57 senators led by Wyden urged Senate leadership to include the bipartisan Craft Beverage Modernization and Tax Reform Act (S. 362) in a year-end legislative package. Lawmakers are trying to prevent a tax increase at the end of the year for brewers and vintners.
Congress extended the tax rates last year in must-pass legislation, and a coalition of brewers and spirit-makers is hoping the same will happen this year.
“A drastic tax hike at the stroke of midnight on December 31 will be a devastating start to the new year for these small businesses that are already struggling to keep their doors open,” the coalition said in a release.