DC Tax Flash: McConnell Sets Stage for Rapid Action on Economic Rescue Bill
Senate Majority Leader Mitch McConnell (R-KY) today moved to start debate this weekend on legislation to rescue the U.S. economy and further respond to the coronavirus outbreak.
The Senate will vote this weekend to limit parliamentary delays and get the bill on the floor fast, setting the stage for general debate and a possible vote on passage on Monday. Sen. McConnell is using an obsolete House-passed tax bill (H.R. 748) as the legislative vehicle for incorporating a massive economic aid bill that is being hammered out by Senate GOP and Democratic leaders today. In doing so, the Senate can vote on passage of the bill without running afoul of the Constitution's mandate that revenue bills originate in the House.
The Majority Leader says he is confident that a bipartisan agreement "in principle" can be reached fast. "[T]hey must reach agreement by the end of the day today," he said on the Senate floor. If those talks succeed, a bipartisan agreement could be drafted as legislative text and potentially released tomorrow.
The Senate has adjourned for the day and is scheduled to return to session at noon tomorrow. House Majority Leader Steny Hoyer (D-MD) has said that the House will remain in recess until after the Senate acts on the legislation.
Yesterday, Senate GOP leaders introduced S. 3548, the "Coronavirus Aid, Relief, and Economic Security Act" (CARES Act), to provide unprecedented economic support for businesses and workers idled by the coronavirus outbreak. This bill was met with strong skepticism from Democrats in Congress. A joint statement from Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) said the bill is "not at all pro-worker and instead puts corporations way ahead of workers."
The negotiations underway right now are likely to produce major revisions to the initial GOP bill. The top negotiators for Democrats reportedly include Minority Leader Schumer, Minority Whip Richard Durbin (D-IL), Senate Finance Committee Ranking Member Ron Wyden (D-OR), Sen. Maria Cantwell (D-WA), Sen. Ben Cardin (D-MD), Sen. Bob Menendez (D-NJ), Sen. Jeanne Shaheen (D-NH), Sen. Debbie Stabenow (D-MI) and Sen. Jack Reed (D-RI). With the Senate controlled by Republicans and a Democratic majority in the House, a compromise bill will need bipartisan support to clear both chambers.
If and when a bipartisan agreement is reached, Sen. McConnell will insert that legislative language into the text of H.R. 748.
The text of the GOP-drafted CARES Act, introduced as S. 3548, is posted here.
A Finance Committee summary of the bill's individual and business tax provisions is posted here.
A Finance Committee summary of the bill's health-related tax provisions is posted here.
A summary of the health provisions within the jurisdiction of the Health, Education, Labor, and Pensions (HELP) Committee is posted here.
A Commerce Committee summary of the bill's provisions affecting airlines and other distressed industries is posted here.
The following is a brief summary of the overall bill by the Congressional Research Service:
Introduced in Senate (03/19/2020)
Coronavirus Aid, Relief, and Economic Security Act or the CARES Act
This bill addresses economic impacts of, and otherwise responds to, the COVID-19 (coronavirus) outbreak.
The bill authorizes emergency loans to distressed businesses, including air carriers, and suspends certain aviation excise taxes.
With respect to small businesses, the bill
- establishes, and provides funding for, forgivable bridge loans; and
- provides additional funding for grants and technical assistance.
The bill also provides funding for $1,200 tax rebates to individuals, with additional $500 payments per qualifying child. The rebate begins phasing out when incomes exceed $75,000 (or $150,000 for joint filers).
The bill establishes limits on requirements for employers to provide paid leave.
With respect to taxes, the bill:
- establishes special rules for certain tax-favored withdrawals from retirement plans;
- delays due dates for employer payroll taxes and estimated tax payments for corporations; and
- revises other provisions, including those related to losses, charitable deductions, and business interest.
With respect to health care, the bill:
- provides additional funding for the prevention, diagnosis, and treatment of COVID-19;
- limits liability for volunteer health care professionals;
- prioritizes Food and Drug Administration (FDA) review of certain drugs;
- allows emergency use of certain diagnostic tests that are not approved by the FDA;
- expands health-insurance coverage for diagnostic testing and requires coverage for preventative services and vaccines;
- revises other provisions, including those regarding the medical supply chain, the national stockpile, the health care workforce, the Healthy Start program, telehealth services, nutrition services, Medicare, and Medicaid.
With respect to education, the bill:
- temporarily suspends payments for federal student loans; and
- otherwise revises provisions related to campus-based aid, supplemental educational-opportunity grants, federal work-study, subsidized loans, Pell grants, and foreign institutions.
The bill also authorizes the Department of the Treasury to temporarily guarantee money-market funds.
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