The House Ways and Means Committee released legislative text for its portion of the COVID-19 relief package both chambers have begun advancing through the budget reconciliation process. At $940 billion, the Ways and Means portion is the largest among all House committees responsible for crafting President Biden’s $1.9 trillion American Rescue Plan.
What’s in the Ways and Means Package?
The following provisions were included in the Ways and Means package:
Crisis Support for Unemployed Workers
- Extends Pandemic Unemployment Assistance (PUA) through Aug. 29, 2021; increases total number of weeks of benefits from 50 to 74.
Extends Federal Pandemic Unemployment Compensation (FPCU) through Aug. 29, 2021; increases FPUC from $300 to $400 for weeks after March 14 and before Aug. 29, 2021.
Increases the number of weeks of benefits workers may receive in the Pandemic Emergency Unemployment Compensation (PEUC) program from 24 to 48; extends to Aug. 29, 2021, the time during which workers can receive PEUC if they have exhausted regular state UI benefits.
Extends federal financing of Short-Time Compensation (STC) programs for states through Aug. 29, 2021.
Promoting Economic Security
- Provides another round of Economic Impact Payments of up to $1,400.
- Makes the Child Tax Credit fully refundable and increases the amount to $3,000 per child ($3,600 for children under 6); increases qualifying age by one year for 2021.
- Reduces the minimum age to claim the childless Earned Income Tax Credit from 25 to 19 for 2021; eliminates the upper age limit; increases credit percentage and phaseout percentage from 7.65% to 15.3%; increases maximum credit amount in 2021 from $543 to $1,502.
- Makes the Child and Dependent Care Tax Credit fully refundable; increases maximum credit rate to 50%; increases phaseout threshold from $15,000 to $125,000.
- Increases the amount of wages for which an employer may claim the paid family credit in a year from $10,000 to $12,000 per employee and the number of days an individual may claim the credit from 50 days to 60 days. Starting on March 31, 2021, the credit is refundable against the hospital insurance tax.
- Extends the Employee Retention Tax Credit through Dec. 31, 2021; structures the credit after June 30, 2021, as a refundable payroll tax credit against hospital insurance tax.
- Repeals a provision that effective Jan. 1, 2021, would have permitted U.S. affiliated companies to allocate interest expense on a worldwide basis. This provision will raise billions in tax revenue from multinational corporations.
- Provides for premium assistance of 85% for COBRA continuation coverage for eligible individuals and families from the first of the month after enactment through Sept. 31, 2021.
- Excludes individuals from receiving premium assistance if they are eligible for other group health plan coverage or Medicare.
- Provides a refundable payroll tax credit to reimburse employers and plans that paid the subsidized portion of the COBRA premium.
Contains the Butch Lewis Emergency Pension Plan Relief Act of 2021, which, among other things:
- Temporarily delays the designation of multiemployer plans in endangered, critical or critical and declining status until the plan year beginning March 1, 2021.
- Extends for five years the funding improvement and rehabilitation periods for multiemployer pension plans in critical and endangered status beginning in 2020 or 2021.
- Creates a financial assistance program under which cash payments would be made by the Pension Benefit Guaranty Corporation to financially troubled multiemployer pension plans to ensure they can continue paying retirees’ benefits.
Child Care for Workers
Increases annual funding for the Child Care Entitlement to States to $3.5 billion.
Emergency Assistance for Children and Families
- Establishes a $1 billion Pandemic Emergency Fund.
The bill also contains language to support skilled nursing facilities, provide emergency assistance to families through home visiting programs and provide additional funding for aging and disability service programs.
What’s in the Education and Labor Package?
Separately, the Education and Labor committees included the following provisions in their sections of the bill:
- Minimum Wage Increase. An increase in the federal minimum wage for employees from $7.25 per hour to $15 per hour by 2025 ($9.50 in 2021; $11.00 in 2022; $12.50 in 2023; $14.00 in 2024; and $15.00 in 2025). Thereafter, annual increases are indexed to the percentage increase, if any, in the median hourly wages of all employees. It is unclear whether this provision will pass muster under the Byrd Rule, which governs budget reconciliation bills in the Senate.
- COBRA Subsidies. COBRA subsidies through Sept. 30, 2021, to ensure workers who have lost health insurance coverage due to layoffs or a reduction in hours are still able to access coverage. Individuals are treated as having paid the amount of premiums if they pay 15% of the amount of the premium.
What Happens Next?
With both chambers having already passed the budget resolution, the 13 House and 12 Senate committees responsible for drafting the package will now begin finalizing their respective portions of the bill. Most committees are aiming to complete the markup process this week, each on its own timeline. Below is an overview of this week’s markup schedule:
Wednesday, Feb. 10: House Transportation and Infrastructure Committee; House Financial Services Committee; House Agriculture Committee
Thursday, Feb. 11: House Small Business Committee; House Veterans Affairs Committee; House Energy and Commerce Committee
Friday, Feb. 12: House Oversight and Governmental Reform Committee
Unlike the others, the House Ways and Means Committee has set aside multiple days for its markup, which is scheduled to begin Wednesday and conclude as late as Friday. Despite the multiday markup, Chair Richard Neal (D-MA) has said the panel will only work during conventional hours, ending each day at 6:00 p.m. to avoid any late-night business. Assuaging any fears Republicans might prolong the process, Ranking Member Kevin Brady (R-TX) has already said Republicans will only offer substantive amendments and will not intentionally delay the process beyond Thursday.
Following the markups, each committee will send its portion to the House Budget Committee, which will compile the sections into a comprehensive bill for floor consideration. House Majority Leader Steny Hoyer (D-MD) said last week the House is aiming to pass the measure during the week of Feb. 22 so the Senate can vote on the measure before extended unemployment benefits expire on March 14.
Policy and Taxation Group is your voice in Washington on economic freedom. We advocate for policies that allow American families to fully enjoy the economic liberties and benefits of a robust free market unique to our nation. For over 25 years, we have been the loudest voice in the nation’s capital on eliminating the death tax. This ill-conceived tax has a destructive impact on families, family businesses, job creation, and the national economy.