After months of bickering and delay, House and Senate negotiators finally agreed to compromise on a much-needed fifth installment of COVID-19 relief for individuals and small businesses. Though wrapped up in mammoth legislation carrying the 12 annual funding bills for FY 2021 as well as tax extenders, budget gimmicks, and a host of unrelated measures, lawmakers would be forgiven for holding their noses while casting votes in support of this “coronabus.”
The legislative package Congress is expected to approve is nearly 5,600 pages and will take time to fully analyze. In the meantime, here is a brief look at the good, the bad, and the ugly in Washington’s latest monument to sausage-making:
The GOOD:
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COVID relief is finally on the way. Economic and health statistics have signaled for months the need for additional COVID relief. The current bill resumes special pandemic unemployment programs, expands food aid for needy families, provides housing assistance, continues federal subsidies for paid sick leave, includes additional Paycheck Protection Program loan-to-grant funding for small businesses, and offers a host of indirect aid to state and local governments through federal support for education programs, transportation, vaccine distribution, COVID testing, and more.
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The federal government is funded for the rest of FY 2021. Federal agencies, including those responsible for fighting the coronavirus pandemic, have been operating under a continuing resolution since October 1 – a less than ideal way to fund the government. The discretionary appropriations portion of the bill includes full funding for the current fiscal year, ensuring that the new Biden administration can start the 2022 appropriations cycle on schedule next year.
The BAD:
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Failure to abide by the “Three-T” test. The Concord Coalition has long advocated for coronavirus aid that is timely, targeted, and temporary. With our federal debt on track to approach new records soon, fiscal prudence is a wise course. Unfortunately, the coronavirus aid package includes a number of provisions that fail our criteria: the inclusion of the $600 tax rebate checks for individuals regardless of need (not targeted), the resurrection of the business meals deduction that was axed in the 2017 tax reform bill (neither targeted nor timely), and allowing businesses to deduct business expenses paid with federal PPP money (just pure wasteful double-dipping since these loans are likely to be forgiven). The billions spent on these provisions could easily have been redirected to policies that would better serve those who need help most.
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Inclusion of extraneous matters. At nearly 5,600 pages, the omnibus bill includes a laundry list of provisions that have nothing to do with fighting the coronavirus or funding the government. In the midst of the Great Recession, President Obama’s White House Chief of Staff, Rahm Emanuel, famously advised lawmakers to never let a serious crisis go to waste saying, “It provides the opportunity to do things that you think you could never do before.” By tacking on business tax extenders, energy provisions, a water resources bill, and a host of other unrelated provisions to this bill, it’s clear Republicans and Democrats alike took that advice to heart.
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Failure to resolve key issues. Noticeably absent from the COVID relief package are two issues that proved intractable to negotiators: compromise language concerning (1) direct aid to state and local governments and (2) limited liability for employers. These two issues aren’t going away, however, and delaying the hard work isn’t going to make the process any easier. When the new Congress is sworn in on January 3, lawmakers should resume earnest discussions on these matters.
The UGLY:
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Budget gimmicks. In order to keep the public-facing price tag of this bill within acceptable limits, the bill drafters relied on an egregious number of back-door spending devices and directed scorekeeping. For example, to avoid breaching the non-defense discretionary spending cap, appropriators relied on a budget gimmick called a CHIMP, which rescinds unobligated mandatory spending to give the aura of savings where none exists.
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The legislative process. Congress typically doesn’t accomplish much in a presidential election year, but when the backdrop is a viral pandemic killing thousands of Americans every day, a sense of urgency should prevail. Without a doubt, the months-long bickering and foot-dragging while our countrymen and women suffered was the worst dereliction of duty ever by a sitting Congress and president. If not for a courageous group of bipartisan, bicameral lawmakers willing to challenge their respective leaders and bypass the committee process, there would be no compromise today.
