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October 6, 2020

House Passes $2.2 Trillion in Virus Relief as Negotiations Continue

Tax Scheme

The House passed a $2.2 trillion economic relief package on Thursday to provide individual and business tax breaks, state and local government funding and protections for health care workers serving during the novel coronavirus pandemic.

The updated version of the Heroes Act, introduced by Rep. Nita Lowey, D-N.Y., and approved by a vote of 214-207, came as ongoing talks between House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin didn't result in a compromise over the size of the pandemic relief package.

During floor debate, Pelosi said the Heroes 2 legislation would provide more flexibility to the paycheck protection program for businesses and give Americans another round of economic impact payments. Those provisions were originally signed into law by President Donald Trump in the Coronavirus Aid, Relief, and Economic Security Act in March.

The bill would provide stimulus payments of $1,200 per taxpayer and $500 per dependent and let unemployed Americans automatically receive the maximum subsidy on the Affordable Care Act exchanges during a special enrollment period. The legislation would also update the employee retention tax credit, renew federal unemployment benefits of $600 per week through the end of January 2021, and would expand the earned income tax credit to childless workers and make the child tax credit programs fully refundable.

"This is not just a money debate and a language debate. This is a values debate," she said, noting that Democrats objected to provisions allowing the use of net operating losses to lower tax liability for wealthy Americans. Instead, Democrats want to put more funding into tax credits for families and children, she said.

On Wednesday, Mnuchin told reporters that he and Pelosi had made a lot of progress "over the last few days" but there was still "more work to do. We're gonna see where we end up."

Some House Republicans panned the Democratic effort, saying it was only a messaging bill intended to give Democrats cover as they headed home to campaign ahead of the November elections.

Rep. Frank Pallone, D-N.J., called the legislation a "serious attempt to put something forward that we believe Republicans can support."

House Ways and Means Committee Chairman Richard Neal, D-Mass., said without expanded unemployment benefits, tenants won't be able to pay rent and owners won't be able to pay mortgages or property taxes.

"The economic challenges that we have are not about corruption. It's not about economic malfeasance. It is about the reality that the world is confronting the worst pandemic since 1918," Neal said. "The American people are looking to us for leadership."

Democrats first passed a $3.4 trillion Heroes Act in May, but Pelosi said she lowered the price tag of the bill by $1.2 trillion in an effort to reach consensus with the White House and Congressional Republicans. Pelosi said the time frames of the relief measures were shortened to early 2021 and some relief provisions were moved to other spending bills.

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