This past week the Senate and House began to lay the groundwork for a budget reconciliation that could lead to the enactment of a Biden-COVID-19 relief package. The House began the process when it passed a budget resolution that provides the legislative authority to use reconciliation on Wednesday, and the Senate took up that resolution and passed it early on Friday morning.  After final House approval the committees can begin the process of a reconciliation..


A week ago, President Biden met with a group of ten Senate Republicans who offered a $600 billion relief measure. Although the comments afterward were cordial, the President made clear in the following days that we needed to “go big” on a relief measure to fully address the current crisis.


The differences between what the ten Republican Senators offered and what the President is seeking are significant. The price tag was less than a third of what the President seeking ($600 billion vs. $1.9 trillion), and the two most significant overlapping parts are additional assistance for small businesses, with both proposals seeking $50 billion more and $160 billion for pandemic relief (such as health and vaccinations, etc.). Perhaps the most significant differences are that the Senators’ bill offered no state and local fiscal relief while the President seeks $350 billion. This was a sore point in last year’s close-out December relief measure. Senator McConnell (R-KY) refused any state relief and then later dropped his demand for lawsuit restrictions in exchange for dropping state aid.


The other big difference between the Biden plan and Senate Republicans includes the President’s call for a significant increase in the child tax credit that has been projected to reduce child poverty in half. The proposal would increase the credit to $3600 for a child 5 and younger and $3000 for children 6 through age 17. The President’s proposal is projected to cost $120 billion, while there is no such proposal in the Senators’ package. There was an encouraging sign when Senator Romney (R-UT) began to put forward his own proposal but it would require the elimination of other federal programs such as TANF.  Other differences: less child care funding ($40 billion v. $20 billion), rental assistance ($35 billion v $0), school reopening ($170 billion v. $20 billion), unemployment compensation extensions ($350 billion v. $132 billion), and other direct payments to people ($465 billion v. $220 billion).


Once the reconciliation instruction is adopted through the 2021 budget resolution, several House and Senate committees will work on their assigned spending targets and legislative changes. The leadership in both houses are attempting to work together.


The House will act first, and then that bill will be taken up by the Senate. The Senate will have twenty hours to debate the bill (ten hours for each side); after the time has expired, Senators can still vote on amendments with no debate time. This so-called “vote-a-rama” can take several hours, but it eventually ends, with a final vote on passage, which requires at least 50 Senators plus the Vice President.


The Biden $1.9 trillion relief package as proposed (but likely to be adjusted):


  • Increased and refundable child tax credit of $3600 per child under 6 and $3000 per child 6 through 17
  • $400 billion for a national vaccination program with $50 billion of that to expand testing.
  • Increases in the Earned Income Tax credit (EITC), including for single adults
  • $350 billion in emergency state, local and territorial funding.
  • $1400 in additional tax rebates to build on last month’s $600.
  • $20 billion for tribal governments to support pandemic response and increase access to personal protective equipment, Internet connectivity, clean water, and electricity in Indian Country.
  • $170 billion in education relief that breaks out between $130 billion for school reopening, $35 billion for colleges and universities, including funding to help with tuition, and $5 billion for governors to plug education holes, including pre-k.
  • $1400 for additional individual stimulus payments building on last month’s $600.
  • Expanded unemployment would run through September and increase the supplement from $300 to $400.
  • $25 billion for rental assistance and assistance to small landlords, $5 billion for emergency energy and utilities costs.
  • Additional increases to SNAP and the WIC programs, including $1 billion in nutritional assistance for the territories.
  • $20 billion for transit aid.
  • $35 billion in government funding to leverage $175 billion in small business loans.
  • $1 billion in additional TANF funding.
  • $25 billion in a child care stabilization fund and an additional $10 billion to expand access and a short-term increase in the child care tax credit.
  • $4 billion for behavioral health funding
  • An increase in the minimum wage to $15 an hour
  • Expansions of the child tax credit and the EITC.