Today’s update takes a look at the beginning of the push for the new covid relief bill and recaps the specifics of what has been proposed. News about President Biden’s immigration bill emerges, Pfizer has a good update to share, and don’t forget about the ERTC opportunity.
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Next Phase of Coronavirus Relief Bill Sprint to Start Monday
House Democrats will take a key procedural step on Monday toward moving their $1.9 trillion coronavirus relief package. Budget Chairman John Yarmuth, D-Ky., has scheduled a 1 p.m. markup to staple together the reconciliation submissions from nine House authorizing committees before sending the measure onto its last stop before the floor, the Rules Committee.
Rules is where the substantive changes will occur, including the likely necessary step of bringing the combined package into compliance with its overall $1.89 trillion limit under the fiscal 2021 budget resolution. The nine committees have so far approved pieces the Congressional Budget office has tallied up to $1.95 trillion.
That figure would appear to remain more or less intact after accounting for small pieces three additional panels will submit next week — Foreign Affairs, Natural Resources and Science — and backing out duplicate provisions approved last week by different committees that share jurisdiction. It’s also possible the numbers could shift a little based on interactions between multiple committee proposals.
House Democrats are seeking offsets to bring the combined cost back down, according to a source familiar with the process who spoke on condition of anonymity. The Budget panel’s top Republican, Jason Smith of Missouri, said in a statement the “process has been so hasty and partisan that it would be no surprise if problems with their approach continue to emerge.” It wasn’t immediately clear how added costs would be accommodated. But one place to look for offsets could be tax increases House Democrats included in two aid bills that passed that chamber last year before dying in the GOP-controlled Senate.
That includes extending limits on tax losses that owners of noncorporate businesses, like partnerships and S corporations, can apply against other income, as well as capping net operating loss “carrybacks” that firms could use to get refunds on prior tax bills. Those provisions would have raised a combined $254 billion in the two big relief bills House Democrats passed last year that died in the GOP-controlled Senate. On a call with reporters Thursday, Rep. Pramila Jayapal, D-Wash., leader of the Congressional Progressive Caucus, said progressives were continuing to push for eliminating those breaks, either in the Senate or as part of separate legislation.
Alternatively, existing funds in the package could be carved back a little to reduce costs. But House Democrats are already taking heat because the Ways and Means recommendations would cut off enhanced unemployment benefits on Aug. 29, a month earlier than President Joe Biden and Senate Finance Committee Chairman Ron Wyden, D-Ore., have sought.
While praising the overall package, the left-leaning Center on Budget, and Policy Priorities this week criticized the unemployment benefit cutoff, which would occur during the August congressional recess. “The August timing makes a benefit lapse, which would hurt families and disrupt states’ ability to administer jobless programs, likelier,” the group said.
Renewing enhanced federal unemployment benefits after their March 14 expiration through Aug. 29 and increasing the federal supplement from $300 to $400 per week would cost $246 billion, according to the CBO. Ways and Means’ overall ceiling was $940.7 billion over a decade, and they came in at $930.1 billion including the unemployment provisions, the CBO said.
The Committee for a Responsible Federal Budget, a nonpartisan watchdog group, criticized House Democrats for ending the unemployment benefits early in part to make room for a long-sought rescue of union pensions, such as a major Teamsters plan, that are headed toward insolvency.
Democrats’ proposal includes payments to most Americans of $1,400 per person. This provision is designed to further Democrats’ goal of providing people with $2,000, in combination with the $600 payments enacted in late December. Before House Democrats unveiled their proposal, there was a debate among lawmakers over what the income eligibility requirements should be for the payments.
Progressives wanted to keep the requirements from the first two rounds of payments in an effort to ensure that people who lost income last year received their full payments quickly, while Republicans and some moderate Democrats wanted to tighten the requirements to focus the payments on low- and middle-income households.
House Democrats’ bill addressed this debate by keeping the same phaseout thresholds as the first two rounds, while ensuring that families with income of more than $200,000 aren’t eligible for checks.
Under the bill, individuals with income of up to $75,000 and married couples with income of up to $150,000 would be eligible to receive the full payment amount, as was the case for the previous rounds. The bill then adjusts how the payment amounts are reduced above those thresholds and provides that individuals with income above $100,000 and married couples with income above $200,000 don’t qualify for any payment.
The House bill includes about $14 billion for vaccines and therapeutics. It would provide $7.5 billion to the Centers for Disease Control and Prevention (CDC) to prepare, administer, and monitor vaccines, as well as another $1 billion to the CDC to provide information and education about the vaccines and improve vaccination rates.
It also would provide the Department of Health and Human Services with $5.2 billion to support research, development and manufacturing of vaccines and therapeutics, and it would provide the Food and Drug Administration with $500 million for vaccine and therapeutic-related activities.
Vaccine funding is an area with bipartisan support. Some lawmakers had suggested that Congress separate vaccine funding from other aspects of the package and pass that on a bipartisan basis, but Democratic leaders and the White House are instead pursuing one large piece of legislation.
The bill would provide $25 billion in assistance to renters and their landlords. It also includes $10 billion for assistance to homeowners. The Biden administration announced on Tuesday that it is extending the foreclosure moratorium for borrowers with federally backed loans, which had been set to expire next month, through the end of June.
The White House said in a fact sheet that it’s important for Congress to also approve the homeowner assistance in the relief bill, because that assistance is “critical for homeowners with mortgages in the private market who are not able to take advantage of today’s actions and may face longer-term challenges.”
The bill would provide $350 billion for state and local governments, territories, and tribal governments. States and localities would be able to use the funds to respond to the pandemic and the related economic downturn, cover costs incurred as a result of the pandemic and replace revenue that was lost because of the pandemic. State and local aid has long been a top priority for Democrats but has been controversial among Republicans. The coronavirus relief law enacted in December did not include a state and local aid package.
Another item that is adding to the House bill’s price tag is legislation that would raise the $7.25 an hour federal minimum wage to $15 in stages over five years, which the CBO said would cost $67 billion over a decade. Jayapal made it clear that the minimum wage language was a top priority for progressives in the aid bill.
“It is really important to us that it happens in this package because we think it is directly related to COVID relief,” she said. “I don’t think we’re pivoting to any other strategy. We’re very focused on getting it into this package.”
The Senate’s “Byrd rule” has been the main obstacle so far since minimum wage legislation has long been considered primarily a nonbudgetary matter and a business mandate that typically is excluded from reconciliation bills. The reconciliation process affords lawmakers the ability to circumvent a Senate filibuster, and the rules named for the late Sen. Robert C. Byrd, D-W.Va., are intended to prevent overuse of reconciliation. But progressives including Senate Budget Chairman Bernie Sanders, I-Vt., point to new CBO forecasts taking into account much broader budgetary impacts than in the past, and show no signs of backing off despite Biden himself saying the minimum wage boost probably can’t make it through the Byrd rule.
Democrats have been considering adding a package of small-business tax breaks in the Senate as a sweetener, though that decision appears to be on hold until there’s a parliamentary ruling on minimum wage. In the meantime, the House first needs to get a bill over to the Senate, which will be a lengthy process next week in its own right.
Biden’s Immigration Bill Emerges
Congressional Democrats unveiled President Joe Biden’s expansive immigration reform bill Thursday, which would provide an eight-year pathway to citizenship for 11 million undocumented immigrants. But it already faces dim prospects for becoming law with such narrow Democratic majorities in both chambers.
The bill, introduced by Sen. Bob Menendez (D-N.J.) and Rep. Linda Sanchez (D-Calif.), would create an expedited pathway for so-called Dreamers and other select undocumented immigrants. It also would increase the number of available diversity visas, and direct more funding to immigration courts and technology.
In drafting a sweeping immigration bill early in his presidency, Biden is seeking to avoid what many Democrats viewed as a missed opportunity by former President Barack Obama to address the issue. The bill, which would also change the term “alien” to “noncitizen” in the country’s legal code, has been praised widely by progressives and immigrant rights advocates. But it’s unlikely to gain any Republican support.
Though co-sponsors characterized the bill as a historic step by the administration to address an overtaxed immigration system, few on and off the Hill think it can pass a 50-50 Senate. “This bill was not designed to get to 60,” said a person close to the White House who was briefed on the bill. “There’s no pathway to 60.”
White House officials wouldn’t say if Biden is considering passing elements of immigration reform through a second budget reconciliation process later this year or if they are already talking to lawmakers about passing smaller items. But they conceded the end result could be very different.
Pfizer-BioNTech Vaccine Is Highly Effective After One Dose
The Covid-19 vaccine developed by Pfizer Inc. and BioNTech SE generates robust immunity after one dose and can be stored in ordinary freezers instead of at ultracold temperatures, according to new research and data released by the companies.
The findings provide strong arguments in favor of delaying the second dose of the two-shot vaccine, as the U.K. has done. They could also have substantial implications on vaccine policy and distribution around the world, simplifying the logistics of distributing the vaccine.
A single shot of the vaccine is 85% effective in preventing symptomatic disease 15 to 28 days after being administered, according to a peer-reviewed study conducted by the Israeli government-owned Sheba Medical Center and published in the Lancet medical journal. Pfizer and BioNTech recommend that a second dose is administered 21 days after the first.
The finding is a vindication of the approach taken by the U.K. government to delay a second dose by up to 12 weeks so it could use limited supplies to deliver a single dose to more people and could encourage others to follow suit. Almost one-third of the U.K.’s adult population has now received at least one vaccine shot. Other authorities in parts of Canada and Europe have prioritized an initial shot, hoping they will have enough doses for a booster when needed.
Preliminary data also suggest that the other widely used vaccine in the U.K. developed by AstraZeneca PLC and the University of Oxford could have a substantial effect after a first dose.
The Israeli findings came from the first real-world data about the effect of the vaccine gathered outside of clinical trials in one of the leading nations in immunization against the coronavirus. Israel has given the first shot to 4.2 million people—more than two-thirds of eligible citizens over 16 years old—and a second shot to 2.8 million, according to its health ministry. The country has around 9.3 million citizens.
Separately, the vaccine, which has been authorized in the U.S., the U.K., the EU and elsewhere, can be stored and transported at between minus 25 and minus 15 degrees Celsius, or minus 13 and 5 degrees Fahrenheit—similar to a consumer freezer—Pfizer and BioNTech said. Currently, the vaccine’s labels say it must be stored at between minus 80 and minus 60 degrees Celsius, requiring sophisticated equipment.
The companies said they were seeking approval from the U.S. Food and Drug Administration to change the vaccine’s storage rules, a move that would make it much easier to handle and potentially accessible to poorer countries with no access to ultracold distribution and storage equipment.
State Pension Issue Still Exists
The state continues to pony up more and more every year to pay retirement costs for its workers around Illinois. Pritzker’s proposed 2022 budget would allot almost $9.4 billion to pensions just from its operating account, or general funds, up from $8.2 billion as recently as 2020. That’s almost a quarter of all general funds spending.
Yet, despite that staggering cost, Illinois is further behind than ever, with total unfunded liability in the state’s pension funds of $141 billion, up $3.8 billion, or 2.8 percent, since last year. The reason why is that the state still isn’t contributing what is actuarially required just to tread water. In fact, it continues to sweeten some benefits, on top of the 3 percent compounded cost of living hike that most workers get annually.
After saving some relatively small change last year by consolidating the investment functions of downstate and suburban police and fire funds, Governor Pritzker has pretty much gone silent. All Pritzker said about pensions in his budget speech was the spending plan includes “full required pension payments.” Those would be the insufficient payments required by law, not the actuarial figure.
Will County Rental Assistance
The Will County Board on Thursday voted to begin negotiations with the Illinois Housing Development Authority (IHDA) to coordinate Emergency Rental Assistance (ERA) for individuals and families struggling to pay rent in Will County. The United States Treasury granted $20.6 million to Will County for rental assistance. The County will work with IHDA, which also received a grant from the federal government, so services are not duplicated and maximum relief is provided for residents. The ERA will provide direct financial assistance for rent and utilities.
“Countless residents have suffered great financial hardship during the COVID pandemic, and this type of direct housing aid can go a long way towards returning them to a sound financial footing,” said Mimi Cowan, Speaker of the Will County Board.
The rental assistance will pay for up to nine months of back rent as well as three months of future rental expense. Minority Leader Mike Fricilone said the assistance was needed by landlords as much as tenants.
“Although renters owe the money to landlords, in many cases, it is the landlords who suffer most financially as they struggle to make mortgage payments and pay property taxes,” Fricilone said. This “ERA money will help make them whole.”
The assistance will target renter households under 80 percent of the area median income (AMI) for example, a family of four making $72,800 or less. Households below 50 percent of AMI and the long-term unemployed would be prioritized. Ninety percent of the funds the county received must be used for rent and utility assistance with only ten percent allowed for administrative costs and housing ability services.
A Reminder on How Your Business Can Take Advantage of a Generous Tax Refund
If you are a small business owner, you may be eligible to take advantage of the recently expanded Employee Retention Tax Credit (ERTC). This refundable, advanceable tax credit is available for wages paid in 2020 and in the first two quarters of 2021.
The Consolidated Appropriations Act (CAA), a new federal law enacted in December, extended and expanded the ERTC to offer substantial savings to any eligible small business owner. For Q1 and Q2 2021, the ERTC offers savings of up to $7,000 per employee, per quarter, and an annual max of up to $14,000 per employee, while for 2020, the program offers $5,000 per employee.
The tax credit is available to small businesses (100 or fewer employees for 2020, 500 or fewer employees for 2021) that experienced a government shutdown during the COVID-19 pandemic, as well as any business that saw a substantial drop in gross receipts compared to the same quarter in 2019 (50% or greater drop in 2020, 20% or greater drop in 2021).
You can also take advantage of the ERTC in addition to first-round and second-round Paycheck Protection Program (PPP) loan. The only restriction on using these programs together, is that you cannot claim ERTC refunds on wages paid by a PPP loan. However, this tax credit opportunity is unfamiliar and appears to be severely underused by many small business owners. According to NFIB’s research:
- Only 4% of small business owners said they are very familiar with the program. Another 32% said they are somewhat familiar.
- About 8% of owners utilized the ERTC in 2020.
- About 10% of owners plan to take advantage of the tax credit in Q1 and Q2 of 2021.
- Nearly half (47%) of owners report that they might take advantage of the tax credit in 2021.
Program Notices & Reminders
Upcoming Discussions with Illinois DCEO and SBA District Office
Discussion with DCEO Director, Erin Guthrie & SBA on PPP
Join this webinar to be a part of the discussion with DCEO (Department of Commerce and Economic Opportunity) Director, Erin Guthrie & the SBA (Small Business Administration) District Director, Robert Steiner on PPP (Payroll Protection Program) and other relevant topics.
Date and time: Wednesday, February 24, 2021 2:00 PM / Register here:
SBA Page Links for Direction and Questions on PPP
1st draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/first-draw-ppp-loans
First draw app: https://www.sba.gov/document/sba-form-2483-paycheck-protection-program-borrower-application-form?utm_medium=email&utm_source=govdelivery
2nd draw info: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program/second-draw-ppp-loans
Second draw app: https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form?utm_medium=email&utm_source=govdelivery
Finally, please join the Joliet Chamber for a virtual conference with Mayor Bob O’Dekirk as he delivers a review of 2020, updates on present City of Joliet projects, and what to expect in the future. On Tuesday, February 23rd, Mayor O’Dekirk will deliver the annual State of the City Address at 11 am. Click here to register: http://jolietchamber.chambermaster.com/events/details/2021-webinar-state-of-the-city-address-6015
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry