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Trump Administration Ready for More Relief as Senate Still Lags

Posted on May 26, 2020

The Trump administration has been planning for the next coronavirus relief package, even as the Senate remains in no hurry to act.

White House economic adviser Kevin Hassett told reporters at the White House May 22 that the administration is ready for a phase 4 deal if it happens, which he expects to be sometime in June.

Although the House passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) on May 15, the Senate is taking a wait-and-see approach before passing more legislation.

“Unless one of the funds starts to completely run out in a very unexpected way, which is what drove the fourth bill, it doesn’t seem like we have a ‘has to be done by next Friday’-type event on the horizon,” Mark Warren, chief tax counsel for Senate Finance Committee Republicans, said on a May 22 webinar hosted by Deloitte Tax LLP.

Warren said the Senate is still trying to assess how much more relief needs to be provided to individuals and businesses. “We’re trying to be prepared and be ready to act as soon as the stars align,” he added.

Payroll Tax Cut Still on the Table

President Trump and National Economic Council Director Larry Kudlow have been pushing for a payroll tax cut to be included in the next coronavirus relief package, which Warren said is something the Senate is “certainly” looking at.

Warren provided no details on what a payroll tax cut could look like, but said the employee-side tax cut could be a challenging benefit to implement.

Senate Republicans haven’t been fully supportive of the proposal in the recent past, with many saying they don’t see it as helpful. “I guess I’m open to being persuaded that it is something that could be effective, but I think some of the things that we’re currently doing are having a bigger impact,” Senate Republican Whip John Thune of South Dakota told reporters May 5.

House Democrats aren’t enthusiastic about the idea either, according to Andrew Grossman, Democratic tax aide for the House Ways and Means Committee, who called it a “non-progressive subsidy” on the Deloitte webinar.

“Our members are really focused on policies that make sure that people are getting checks, not helping people who happen to already be getting the checks,” said Grossman.

Wyden Wants LIHTC Changes

Other ideas for the next relief package include adjustments to the low-income housing tax credit (LIHTC) proposed by Senate Finance Committee ranking member Ron Wyden, D-Ore. He said it would encourage investors, developers, and property managers to start and maintain affordable housing projects.

Wyden wants to expand incentives for the credit, provide credits to buildings that haven’t fully leased their properties because of the pandemic, and delay compliance deadlines for 12 months, among other provisions.

“This country needs more affordable housing, not less, and Congress can’t allow this crisis to foster homelessness and further reduce the supply of affordable housing,” Wyden said in a May 22 release.

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