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Split Screen: COVID Package in House, Trump Trial in Senate

As noted yesterday, House committees that received instructions to craft specific parts of the larger COVID relief package will begin to act today, with the Education and Labor Committee marking up its bill at 3 PM today (the session will be webcast here).  The Transportation and Infrastructure (T&I), Financial Services, and Agriculture Committees are scheduled to follow suit by marking up their bills on Wednesday.  Copies of the T & I and Financial Services bills were released late yesterday.

The House Ways and Means Committee is expected to take up its piece of the COVID package next week during a markup that is expected to take multiple days.  The entirety of the Ways and Means package and summaries of each section are available here.  Provisions of interest in the bill include, for example:

  • $1,400 credit for both children and non-child dependents;
  • Tax credits for state and local governments to provide paid family and medical leave created by Families First Corona Response Act, which would become effective March 31, 2021; and,
  • Extension of the employee retention tax credit.

Meanwhile, on the other side of the Capitol complex, the full Senate today is scheduled to start the trial to convict former president Donald Trump.  Once the trial officially starts, both sides can use up to 16 hours to make their case.

Budget Resolution Under Consideration

The FY21 joint budget resolution under consideration by the House and Senate will give “reconciliation” instructions to 11 authorizing committees, directing them to report legislation related to spending, revenue, or debt. The Democrats’ joint resolution carves out an addition $1.9 trillion in deficit spending by changing the top level discretionary spending amount for FY21.

The 3 committees with the largest instructions are:

  • Finance ($1.296 trillion)
  • Health, Education, Labor, and Pensions ($305 billion)
  • Baking, Housing, and Urban Affairs ($89 billion)

The deadline to report legislation is February 16th.

The reconciliation process can be used as a vehicle to pass large agenda items such as a minimum wage increase, COVID relief, and additional stimulus checks, as long as it is related to the budget. Congress is limited to one reconciliation measure each year from each of the categories of direct spending, revenue and the debt limit.

There are various restrictions as to how this process can be used. In the Senate, reconciliation bills are not subject to the filibuster (can pass by simple majority) and amendments must be germane to the bill, however the Byrd Rule applies which limits the provisions included. For a more detailed overview, you can read here.

5,593-page Bill Now Ready

A few hours ago, the text of the combined package containing the FY2021 omnibus spending bill and the next COVID relief legislation was released.  The text of the 5,593-page bill is available here.

Needless to say, it will take some time to go through the bill to pull out the provisions of most relevance to UW. However, provided below are some initial points of interest.

COVID RELIEF PACKAGE

Education

$82 Billion for Education

  • $4.05 billion to Governors for education purposes, with $2.75 billion set aside for private education funding
  • $54.3 billion for public K-12 education
  • $20.2 billion for public and private non-profit higher education, going directly to institutions
    • the distribution of funds will be based on a combination on a host of factors, such as the number of full-time Pell students, the number of total Pell students, the number of full-time students, the number of total students
    • With these funds, institutions would have to spend at least the same amount they spent on student emergency grants with CARES funding.
  • $681 million for for-profit higher education
  • $1.7 billion for MSIs and $113.5 million for institutions with the highest need
  • $113.5 million for those institutions with the greatest need caused by COVID-19

FAFSA Simplification

  • Reduces total questions on the FAFSA from 108 questions to a maximum of 36 questions
  • Reduces the Department of Education’s lengthy financial data verification process by instead using data from the Internal Revenue Service
  • Creates simpler Pell Grant eligibility guidelines for maximum and minimum awards, so many applicants will know if they will get a maximum or minimum grant to go to college
  • Seeks to more clearly define terminologies to help families understand the questions being asked.
  • Higher level of income protection allowance.
  • Allows incarcerated students to become eligible for Pell.
  • Eliminates drug conviction and Selective Service registration eligibility thresholds.

Health Provisions

  • $9 Billion for CDC and states for vaccine distribution
  • $22 Billion for state for testing, tracing, and mitigation
  • Medicare:
    • injects $3 billion into the physician fee schedule in 2021, resulting in payment increases across the board helping all Medicare providers during the ongoing COVID-19 pandemic
    • continues the current Alternative Payment Model (APM) thresholds for two additional years, allowing more providers to qualify for the 5 percent APM payment who would otherwise have been disqualified because of statutory increases in threshold amounts
    • delays the 2 percent sequester cuts that were supposed to resume January 1, 2021, for three additional months
  • Enacts HR 3425, Medicare GME treatment of hospitals establishing new medical residency training programs after hosting medical resident rotators for short durations. This section allows hospitals to host a limited number of residents for short-term rotations without being negatively impacted by a set permanent full time equivalent (FTE) resident cap or a Per Resident Amount (PRA).
  • Enacts Promoting rural hospital GME funding opportunity (HR 8892). This section makes changes to Medicare graduate medical education (GME) Rural Training Tracks (RTT) program in order to provide greater flexibility for rural and urban hospitals to partner and address the physician workforce needs of rural areas.

Tax/HR Provisions

  • Energy efficient commercial buildings deduction. This provision allows an increased deduction for buildings that meet above-industry standards of energy efficiency in the year they are placed in service. The energy efficiency standards are updated and the deduction rate is indexed to inflation.
  • Transition from deduction for qualified tuition and related expenses to increased income limitation for lifetime learning credit. After 2020, this provision repeals the qualified tuition deduction and replaces it by increasing the phase-out limits on the Lifetime Learning credit to hold taxpayers harmless.
  • Employee Retention Tax Credit (ERTC) extended and expanded Beginning on January 1, 2021 and through June 30, 2021, among other things, the provision, allows colleges, universities and entities who’s primary purpose is to provide health care to participate.
  • Five-year extension of exclusion for certain employer payments of student loans.
  • Certain charitable contributions deductible by non-itemizers. This provision extends and modifies the non-itemizer charitable deduction for 2021 and increases the maximum amount that may be deducted to $600 for married couples filing a joint return (while non-married filers or married filers who file separately are limited to $300).
  • Modification of limitations on charitable contributions. This provision extends for one year the increased limit ($600) from the CARES Act on deductible charitable contributions for corporations and taxpayers who itemize.
  • Temporary special rules for health and dependent care flexible spending arrangements. This provision provides further flexibility for taxpayers to rollover unused amounts in their health and dependent care flexible spending arrangements from 2020 to 2021 and from 2021 to 2022. This provision also permits employers to allow employees to make a 2021 mid-year prospective change in contribution amounts.
  • Temporary changes to Flexible Savings Accounts. This provision provides further flexibility for taxpayers to rollover unused amounts in their health and dependent care flexible spending arrangements from 2020 to 2021 and from 2021 to 2022. This provision also permits employers to allow employees to make a 2021 mid-year prospective change in contribution amounts.
  • Codifies Education guidance and states that emergency grants that students received from the CARES Act or any other emergency grant funding from institutions, states, the federal government, or any other entity for emergency purposes would not count as gross income for tax purposes.
  • IRS and Education to work together to ensure that the sharing of taxpayer data for purposes for federal student aid does not create unintended problems with respect to confidentiality.

Other pandemic-related provisions

  • SNAP benefits extended to college students who are eligible for federal or state work study programs or have $0 EFC for federal student aid formula purposes, and are at least half-time
  • Second round of PPP loans
  • $300 per week unemployment payments for 11 weeks (through March 14, 2021)
  • $600 per person in direct payments (including for children), phased out at $75,000 per person/ $150,000 per couple
  • $25 billion for rental assistance and eviction moratorium through January
  • $1.3 billion for broadband connectivity
  • Extends the date by which state and local governments much make expenditures with CARES Act Coronavirus Relief Fund awards from December 30, 2020 to December 31, 2021.
  • Transportation aid: $15 billion for airlines, $14 billion for mass transit, $10 billion for state highways, $2 billion for airports and $1 billion for Amtrak.
  • Broadband: $3.2 billion for low income broadband expansion

 

FY2021 OMNIBUS APPROPRIATIONS PACKAGE PROVISIONS OF INTEREST

  • NIH $42.9 billion, an increase of $1.25 billion
    • $3.118 billion, an increase of $300 million, for Alzheimer’s disease and related dementias research;
    • $560 million, an increase of $60 million, for the BRAIN Initiative;
    • $541 million, an increase of $8 million, for research related to opioids through the HEAL Initiative;
    • $220 million, an increase of $20 million, for Universal Flu Vaccine Research;
    • $3.09 billion, an increase of $20 million, for HIV/AIDS Research, including funding for the Centers for AIDS Research as part of the Ending the HIV Epidemic Initiative;
    • $65 million, an increase of $5 million, for the INCLUDE Down syndrome research initiative;
    • $12.5 million for research on firearm violence prevention;
    • $44 million, an increase of $5 million, for the Office of Research on Women’s Health; and
    • Funding for new initiatives, including $10 million for research on premature births, $10 million for research on tick-borne diseases, and $50 million for research on artificial intelligence to address chronic diseases
  • NSF $8.5 billion, an increase of $208.4 million above the FY20
  • CDC, $7.9 billion an increase of $125 million ($56 million, an increase of $5 million, for public health workforce and career development)
  • NIOSH $345 million, an increase of $2.5 million
  • AHRQ $338 million, level funded
  • NOAA Sea Grant $75 million, an increase of $2 million above FY20
  • DOE EERE $2.86 billion, an increase of $72 million above FY20
  • DOE Office of  Science $7.026 billion, an increase of $26 million above FY20
  • DOE Advanced Research Projects Agency $427 million, an increase of $2 million above FY20
  • NEA $167.50 million, an increase of $5.25 million
  • NEH $167.5 million, an increase of $5.25 million
  • Pell $6,495 for the maximum Pell Grant, an increase of $150
  • SEOG $880 million
  • Federal Work Study $1.2 billion
  • Corporation for Public Broadcasting $475 million, in 2023 advance funding, an increase of $10 million
  • IMLS $257 million, a $5 million increase
  • State Dept $100.7 million for combatting wildlife trafficking
  • USGS $25.7 million is included for continued development and expansion of the ShakeAlert West Coast earthquake early warning (EEW) system
  • USGS CRUs $25 million level funding

The House is debating the bill now and the Senate is expected to follow suit later this evening.

As we noted above, this is a very big piece of legislation, one that we will continue to review in the days to come.  We will continue to update this blog.  Please check back for additional updates.

 

House Passes Continuing Resolution

The House passed a continuing resolution (“CR”), H.R. 8337, to fund the Federal Government through December 11th, 2020 and avoid a potential shutdown. The bipartisan resolution passed 359-57 and is part of a deal reached by House Democrats, Senate Republicans, and the Administration. The CR must still pass in the Senate and be signed by the President. The full story is available here.

As of now, all 12 FY 2021 appropriations bills have passed in the House, but none have passed in the Senate, indicating a likely long road ahead.

 

Higher Education Community Crafts Tax Proposals for Phase 4

On top of the proposals aimed at direct institutional and student needs as well as needs in the research arena, the higher education community has also pulled together a set of tax proposals that seeks to address additional challenges.

One of the top priorities in the package is the request that public entities, including public universities, become eligible to take advantage of the tax credits available to employers that provide paid sick and emergency family and medical leave for employees who are facing COVID-19-related issues.  “Phase 2” required all public employers as well as private employers with fewer than 500 employees to provide paid sick and emergency family and medical leave.  At the same time, the bill created tax credits for the same set of private sector employers but explicitly prohibited public employers from being eligible for the credits.