The House is expected to send a coronavirus relief package to President Trump’s desk March 27, but Democrats have already begun considering the possibility of a fourth bill to help those affected by the downturn in the economy.
House Speaker Nancy Pelosi, D-Calif., was adamant in a press conference March 26 that the Senate-passed Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) will become law despite some criticism of the bill from members of both parties.
“Tomorrow we’ll bring the bill to the floor. It will pass with strong bipartisan support,” Pelosi said.
The CARES Act, which the Senate unanimously approved March 25, would provide tax rebate checks to most Americans, administered by the IRS, while rolling back some provisions of the Tax Cuts and Jobs Act to provide liquidity to struggling companies.
House leaders, who want to approve the bill without having to call back all House members because of the risks associated with traveling, are likely to call a voice vote on the measure. Pelosi shot down the idea of approving the bill by unanimous consent — a parliamentary procedure by which lawmakers on both sides agree to approve the bill — over concern that someone might object, requiring all House members to return to Washington.
But complications could also arise during a voice vote. Although the procedure allows for debate on the House floor among a limited number of lawmakers, a single representative could make a point of order that a quorum is not present and call for a recorded vote. That would then require at least 216 House members to come to Washington to vote on the package.
A Costly Endeavor
The Joint Committee on Taxation published a report (JCX-11-20) March 26 estimating that the CARES Act’s revenue provisions would cost $591.1 billion over 10 years.
Because many of the changes are temporary, the bill would actually be more costly over the next two years, with a price tag of $706.2 billion in 2020 and $254.1 billion in 2021. But much of those costs is expected to be made up in the following years under the budget window.
The tax rebate checks alone would cost $292.4 billion, according to the JCT. Under the bill, individuals making $75,000 or less annually would be entitled to $1,200, while joint filers making up to $150,000 would receive $2,400. Parents would get an additional $500 per child under the age of 17.
An employee retention tax credit would cost about $54.6 billion, while a modification to the net operating loss rule to allow for carrybacks would cost $88.7 billion in 2020 and 2021, but just $25.5 billion over 10 years. Similarly, a provision to delay payment of the employer’s share of payroll taxes would cost $251.8 billion over the next two years, but just $12.3 billion over 10 years. Another provision to increase the deduction limit for business interest expenses under section 163(j) would cost $13.4 billion over 10 years.
The bill also includes a provision to allow a one-year above-the-line deduction for cash contributions to charities of up to $300, which is estimated to cost over $1.5 billion.
What’s Next?
Pelosi told reporters that the one-time tax rebates likely won’t be the last direct payments that workers will see during the pandemic. Democrats want more to be done to help workers navigate the economy, she said.
Pelosi also complained that many of her objectives aren’t part of the CARES Act, including more relief for states. House Democrats on March 23 introduced the Take Responsibility for Workers and Families Act (H.R. 6379), which includes a long-sought provision to expand the earned income tax credit and make the child tax credit fully refundable. The bill also would create a tax credit for hospitals and government agencies that provide sick leave.
But House Minority Leader Kevin McCarthy, R-Calif., poured cold water on Democrats’ ideas. “You have to let the bill work,” he said of the CARES Act at a press conference, emphasizing that the economy should be allowed to digest the effects of the act before lawmakers determine where additional help might be necessary.
Pelosi acknowledged that a fourth bill should take a “four corners” approach, meaning the top-ranking party leaders in both chambers working together.
Editor's Note: An earlier story contained a link to an 883-page draft version of H.R. 748. The final bill as passed by the Senate is 880 pages. All stories and links have been corrected.