House Dems Push Through $1.9 Trillion Stimulus/Aid Package Early Saturday

Posted on 02/27/2021 9:01 AM

Package expected to see changes via Senate process



House Democrats passed a $1.9 trillion stimulus/aid bill early Saturday morning over solid Republican opposition. The 219-212 vote sends The American Rescue Plan (HR 1319) to the Senate, where it will undergo changes. The two Democratic defectors joining all Republicans were Kurt Schrader of Oregon and Jared Golden of Maine. Golden has argued that the House should have pursued a stand-alone vote on a vaccine-funding bill before turning to larger relief legislation. Democrats hope to push the legislation through both chambers and get it signed into law by March 14, when enhanced unemployment benefits are set to expire.


     A provision that would more than double the federal minimum wage must be stripped from the package, based on guidance from the Senate parliamentarian. Senate Democrats were prepping an alternative to try to get around budget rules by taxing employers that don't pay higher wages, but it wasn't clear if that effort would pass muster under the "Byrd rule" either. Senate Finance Chairman Ron Wyden (D-Ore.) said he was drafting a “Plan B” that would boost the minimum wage through the tax code. He said his plan would impose a penalty on corporations that didn’t boost wages and offer tax credits to small businesses to offset the cost of a wage boost. Progressives are calling for Vice President Kamala Harris, the president of the Senate, to overrule the parliamentarian’s advisory opinion or for Democrats to abolish the filibuster to ensure that the campaign promise of a minimum wage increase can eventually become law under President Biden. But Democrats do not have the votes to overrule the parliamentarian or eliminate the filibuster in the Senate anyway, because of opposition from at least two moderate Senate Democrats: West Virginia’s Joe Manchin III and Arizona’s Kyrsten Sinema.


     Other potential Senate changes could redirect some of the $350 billion for states and localities to other purposes like broadband infrastructure; extend the expiration date on extended unemployment benefits by a month; and provide additional funds for restaurants, entertainment venues, hotels and more.


     The House legislation includes provisions to provide a third round of direct stimulus checks of up to $1,400 for individuals, a $400 weekly unemployment insurance boost through Aug. 29, and $8.5 billion in funding for the Centers for Disease Control and Prevention (CDC) to distribute, track and promote public confidence in Covid-19 vaccines. The direct payments of up to $1,400 for individuals or $2,800 for married couples are the largest pandemic impact payments yet, after the two previous rounds last year maxed out at $1,200 and $600.  Individuals with incomes of up to $75,000 and married couples earning up to $150,000 would be eligible for the full amounts, while the payments would phase out for individuals making up to $100,000 or $200,000 for couples.


     Other key parts of the package include $350 billion for state and local governments,  U.S. territories and tribal governments, $130 billion to help K-12 schools reopen for in-person classroom instruction, and an expansion of the child tax credit to $3,000 per child or $3,600 for children under six years of age.


     The House package would provide no new direct payments to farmers, but there are $16.1 billion in ag and food provisions approved by the House Agriculture Committee. It would provide $5 billion in assistance to minority farmers, while $3.6 billion is earmarked to fund commodity purchases and to provide grants and loans to processors, farmers markets, producers and organizations to pay for needs such as workers' personal protection equipment and to retool operations to "maintain and improve food and agricultural supply chain resiliency." The ag provisions would pay off direct and guaranteed USDA loans held by designated minority farmers and ranchers. They would get payments worth 120% of the indebtedness to retire the loans and pay the associated taxes. The package also would extend the temporary 15% increase in Supplemental Nutrition Assistance Program benefits through September, and would provide an additional $6.6 billion in provisions to expand child nutrition assistance.


     A 195-page manager's amendment (link) incorporating many changes sought by Democrats was incorporated when the rule for floor debate was adopted on a 219-210 vote. Republicans criticized the process, and the items tucked into the larger bill as well as the manager's package that came as a surprise and had little to do with the pandemic. For example, a provision added by the Rules Committee, which hadn't been debated in Ways and Means, would "drastically" lower the federal income tax reporting threshold for gig workers from $20,000 to $600. The Joint Committee on Taxation said the provision would raise $7.3 billion over a decade. Democrats "want to reward their political allies at the expense of America's working class," said the Budget Committee's top Republican, Jason Smith of Missouri. "Simply put, this is the wrong plan, at the wrong time, for all the wrong reasons."


     Republicans also stressed a provision dubbed the “Pelosi payoff” that they said could direct up to $140 million to a rail and subway system connecting San Jose and Santa Clara, in the San Francisco Bay Area near Pelosi's district. Senate Republicans may try to raise a Byrd rule challenge to the transit project.


     A WHIP+ amendment from Rep. Randy Feenstra (R-Iowa) and backed by Rep. Cynthia Axne (D-Iowa), which was adopted in the Agriculture Committee markup, was removed in the manager’s amendment. Feenstra’s measure was aimed at providing relief for producers who were affected by natural disasters, including high-velocity wind (derecho) storms that tore through Iowa last year, causing billions of dollars in damage. Axne told AgriTalk on Friday she would push for the topic to be considered later on in this Congress.


     The final price tag of the package can’t exceed a cost cap of $1.89 trillion, as imposed under the fiscal 2021 budget resolution (SConRes 5) that provides reconciliation instructions. The current package, including a manager’s amendment, could exceed the cost cap by about $20 billion. But that problem may be solved in the Senate if it strips out the minimum wage provision, which the Congressional Budget Office estimated would cost about $67 billion over a decade.



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