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McConnell Rejects Pelosi Plea for New Coronavirus Aid Bill

House Speaker Nancy Pelosi wants Congress to pass a fourth coronavirus aid bill. Senate Majority Leader Mitch McConnell is expressing skepticism about this idea, however.

 

Over the past month, Congress has passed three aid bills related to the coronavirus pandemic that has stopped much economic activity across the U.S. and killed thousands. These bills received broad bipartisan support, with Republicans and Democrats in Congress working with the White House to craft bills that the president quickly signed into law.

 

That consensus is breaking down with the prospect of a fourth aid bill. Speaker Pelosi says it is necessary to boost spending on health centers and housing aid, as well as enact a large infrastructure spending package. President Trump has also signaled his support for passing a bill to pay for a multitude of transportation and infrastructure projects, arguing that interest rates are low so now is the time to build.

 

Senate Majority Leader Mitch McConnell has said that it is too soon to do another aid bill. He said he would rather wait to see how this crisis develops and discuss such legislation later. He also noted the high price tag of already-passed aid bills, saying that the federal government needs to consider the affordability of future action.

 

If Speaker Pelosi wants to proceed with new coronavirus legislation in the House, she could do so. She has remarked, however, that she prefers to proceed in conjunction with the Senate and White House. It remains to be seen if Sen. McConnell will agree to talks with the House leadership.


Do you think there should be a fourth coronavirus aid bill?

Rep. Massie Forces House to Convene to Vote on Coronavirus Bill

The Senate passed the third coronavirus aid bill unanimously earlier this week. House leadership had hoped the bill could be passed by voice vote in that chamber, which would not necessitate members to return to the Capitol for a vote. Rep. Thomas Massie (R-KY) stood in the way of that plan.

 

The $2 trillion aid bill has bipartisan support and will easily pass the House of Representatives. When every House member supports a bill, it can be passed without a roll call vote. Instead, the House can reconvene with minimal membership and legislation can pass by a voice vote. This only works so long as no one objects that there is not a quorum of House members to do business.

 

Rep. Massie suggested that he would object to a voice vote. He noted that the rules require that a quorum be present to vote on legislation, and a bill of this importance should not be considered by the House under a suspension of the rules. To forestall his objection, House leadership has arranged that enough House members would return to Washington, D.C., to have a quorum.

 

This move has not endeared Rep. Massie to House leadership. They say that it is dangerous to require House members to travel and gather together in a time when health officials say people should be social distancing. They also note that there is no chance this bill will fail in the House, so Rep. Massie is accomplishing nothing by his stand. President Trump has also weighed in, calling Rep. Massie a “grandstander” and asking that the Republican Party expel him.

 

Do you think House members should have been forced to return to Washington, D.C., to vote on the coronavirus aid bill?

Senate Rejects Cap on Uninsurance Benefits

The Senate passed the third coronavirus relief bill by a vote of 96-0 last night, but not without a fight over unemployment insurance.

 

This aid bill provides for expanded uninsurance benefits for four months as well as increasing the maximum benefit by $600. This $600 boost earned the ire of some Republican senators.

 

Led by Sen. Ben Sasse (R-NE), these senators pointed out that this could lead to someone receiving more in uninsurance benefits than they received as wages from their job. They suggested this could lead to people preferring to remain on uninsurance rather than seek work, or could even cause some businesses to lay off employees because these workers could make more unemployed.

 

In response, they offered an amendment that would limit the maximum unemployment benefit to a level that is no greater than the wage paid to that person when he or she was employed. The Senate rejected the amendment 48-48.

 

Opponents of the measure said that it was targeting workers who had lost their jobs. They also pointed out that each state has a different unemployment insurance system, and the federal government could not impose a broad cap like this on benefits.

 

In the end, the senators who supported the amendment voted for the final aid package. The House of Representatives is now considering the legislation.

 

Do you think that unemployment insurance should be limited so that someone’s unemployment benefits cannot be any higher than the wage he or she made while working?

Congress, President Agree on Coronavirus Aid Bill

A $2 trillion coronavirus bill is quickly moving its way through Congress.

 

After days of negotiations, Democrats and Republicans in Congress worked with the White House to craft a bill that contains a multitude of provisions related to coronavirus. Here are some of the things in the legislation:

  • Expanded unemployment benefits for 4 months
  • A one-time $1,200 payment to Americans whose income is under $75,000
  • A $500 billion fund administered by the Federal Reserve to provide liquidity to businesses
  • A $367 billion small business loan program
  • $130 billion in aid for hospitals
  • $150 billion in aid for state and local governments
  • A $25 billion aid package for airlines

 

The Senate will vote on this bill today. It is likely to pass with overwhelming bipartisan support.

 

The House of Representatives is out of session, however. If there is unanimous consent to pass the bill, it can move through that chamber with only a short session. However, if a member objects to this, the House will have to be called into a longer session to debate and vote on the bill.

 

This is the third coronavirus-related bill considered by Congress.

 

Do you support expanding unemployment befits for four weeks? Should every American household with a income under $75,000 receive a government check for $1,200?

Pelosi Unveils Her Coronavirus Stimulus Bill

Democrats in the House and Senate are trying to come to agreement on a bipartisan stimulus bill to respond to the coronavirus epidemic. In the House of Representatives, Speaker Nancy Pelosi has outlined her view on what the government’s response should be – and Republicans are quick to blast her ideas as well outside the mainstream.

 

Under Speaker Pelosi’s bill, the federal government would, among other things:

  • Send monthly checks to of $2,000 per adult and $1,000 per child to individuals who make under $115,000 (and households with incomes under $230,000)
  • Expand the power of unions to organize workers
  • Forgive $10,000 in student loans for each borrower
  • Mandate family leave for larger companies
  • Spend $600 billion in small business assistance
  • Spend $100 billion in assistance for low-income renters
  • Mandate that businesses receiving money from this bill must pay workers at least $15 an hour

 

Speaker Pelosi says these provisions are necessary to protect workers and ensure that corporations do not take advantage of government aid. Critics, however, argue that the is using this crisis as a way to enact a liberal wish list that has little to do with the epidemic.

 

The Senate legislation that is likely to pass today does not contain many of the ideas proposed by Speaker Pelosi. It is unclear what will happen when the Senate bill reaches the House of Representatives. If Speaker Pelosi insists on passing a version of her legislation, it would set up lengthy negotiations with the Senate and the president in order to see this third coronavirus relief legislation enacted.

 

Do you support mandating a higher minimum wage for workers in companies that accept coronavirus aid? Should a coronavirus relief bill include provisions for federal student loan forgiveness?

Third Coronavirus Aid Bill Stalls in Senate

Democrats in the Senate yesterday voted to filibuster the third coronavirus aid bill. Today senators and Trump Administration officials are trying to come to agreement on a package that could cost $2 trillion.

 

There appeared to be agreement over the weekend as senators and Treasury Secretary Steve Mnuchin worked on details over the massive aid package. Then Democrats voted against cloture (ending debate) on the bill. The 47-47 vote prompted anger by Senate Majority Leader Mitch McConnell and President Trump.

 

Republicans say the Democrats are filibustering much-needed aid for workers and businesses. Democrats said the bill had too much in it for businesses and not enough protections for workers and aid for health care personnel. They especially objected to a large pool of money authorized by the bill that the Trump Administration could use to provide loans or grants to bigger companies. Republicans countered that Democrats just wanted to add numerous items that they had long-favored but had nothing to do with this emergency.

 

The Senate is considering the legislation again today, and both sides are hoping for a bipartisan vote in support. There is broad agreement on provisions that would give direct checks to families, expand unemployment insurance, give loans to small businesses, and also provide money to larger companies to keep them from going insolvent.

 

Do you support passage of a third coronavirus aid bill?

President Trump Signs Coronavirus Aid Bill

On Wednesday, President Trump signed legislation aimed at offsetting the economic effects of the coronavirus pandemic.

 

The House voted 363-40 to pass HR 6201 on Saturday. The Senate followed suit on Wednesday by a vote of 90-8. Among other things, this legislation includes:

  • A paid sick leave mandate that covers businesses with fewer than 500 employees
  • Waivers for health insurers to provide cost-free testing
  • An increase in federal Medicaid payments
  • More funding for federal food programs
  • A ban on tougher work requirements for food stamps
  • $1 billion in additional unemployment insurance funding for the states

 

In the House of Representatives, some members objected that they did not know what they were voting on and complaints about being forced to vote too quickly on a massive aid bill. While the House of Representatives is on recess this week, it did convene a brief session on Monday to approve legislation that contained dozens of pages of technical corrections to the original bill.

 

In the Senate, Rand Paul (R-KY) offered an amendment that would end military activities in Afghanistan and make permanent a federal requirement to provide a Social Security number to claim the child tax credit. He argued these could help offset the cost of the bill. Senators voted down his amendment on a 3-95 vote. Sen. Ron Johnson (R-WI) also attempted to amend the bill by removing the federal sick leave mandate and replacing it with a state grant program. While this amendment received a vote of 50-48, it failed to reach the 60-vote threshold to pass.

 

Those who voted in favor of it said it was necessary to aid in an economic meltdown that is happening in response to the coronavirus. However, some conservative members of the House said that the bill was considered too quickly and contained things that were unrelated to the coronavirus.

 

This was the second bill dealing with the coronavirus pandemic. The Senate is now considering an even larger aid package that will likely be voted on next week.

 

What do you think the federal government should do to respond to the coronavirus pandemic?

 

Senate Considers How to Structure Coronavirus Aid

The House of Representatives passed an economic stimulus bill on Saturday. Now it’s the Senate’s turn to tackle the issue of trying to alleviate the fallout from the coronavirus. Senators are rushing to come up with ideas that can achieve bipartisan support.

 

Senate Majority Leader Mitch McConnell canceled the scheduled recess in order to allow the Senate to consider coronavirus aid legislation this week. However, given the complexity of the issues involved, negotiations over the legislation’s details may move into next week.

 

Senators are considering how to deal with the issues of the public health response, tax policy, aid to small businesses, and aid to major industries. Among the ideas being discussed are:

  • Direct payments to Americans of between $1,000 and $2,000, and additional money for each child
  • A $50 billion loan fund for airlines
  • A $250 billion fund for small businesses
  • Incentives for businesses to manufacture more medical equipment

 

The Senate could add these ideas to the bill passed by the House, which would then lead to a conference committee to work out differences. Or it could pass the House relief legislation and then another bill of its own aid ideas. It is unclear how the Senate will structure its bill.

 

While there are differences between Republicans and Democrats over details of the stimulus, there is broad support for some kind of federal help. While some Republicans are balking at the price tag of the bill, there is unlikely to be much opposition once it is formulated.

 

The total aid package being promoted by the White House and considered by senators could cost as much as $1 trillion.

 

Do you support spending $1 trillion in federal aid to stimulate the economy in the wake of the coronavirus?

Coronovirus Relief May Include Cash Payments to All Americans

The Trump Administration and members of Congress are scrambling to put together policy proposals aimed at alleviating an economic crisis due to the coronavirus. One idea with growing support is direct cash payments.

 

On Tuesday, Treasury Secretary Steve Mnuchin said that the Trump Administration was seriously considering sending checks to Americans within the next two weeks. He did not specify what the amount of these checks would be or the details of how they would be sent.

 

Senator Mitt Romney (R-UT) had floated the idea of sending every American $1,000 to stimulate the economy and help blunt the economic decline that the coronavirus has caused. Sen. Romney and Secretary Mnuchin had discussed this idea on Monday night, and it seems to have gained favor in the White House.

 

President Trump had previously endorsed a payroll tax cut as a way to get more money into the economy. Secretary Mnuchin now says that this may take too long to have an effect. These payments would be part of an aid package that would have a total cost of around $850 billion.

 

Democrats in Congress have also expressed support for this type of aid payment to Americans.

 

Do you think the federal government should send Americans $1,000 to stimulate the economy?

House Passes Coronavirus Aid Bill

Early Saturday morning, the House of Representatives overwhelmingly passed legislation aimed at offsetting the economic effects of the coronavirus pandemic.

 

The House voted 363-40 to pass HR 6201. Among other things, this legislation includes:

  • A paid sick leave mandate that covers businesses with fewer than 500 employees
  • Waivers for health insurers to provide cost-free testing
  • An increase in federal Medicaid payments
  • More funding for federal food programs
  • A ban on tougher work requirements for food stamps
  • $1 billion in additional unemployment insurance funding for the states

 

House Speaker Nancy Pelosi worked with the White House to develop the details of this bill and then rushed it to the House floor. This led to objections from some House members that they did not know what they were voting on and complaints about being forced to vote too quickly on a massive aid bill. The Congressional Budget Office could not provide an estimate for the cost of the bill due to not having enough time to analyze it.

 

This legislation received bipartisan support and President Trump has indicated he will sign it. Those who voted in favor of it said it was necessary to aid in an economic meltdown that is happening in response to the coronavirus. However, some conservative members of the House said that the bill was considered too quickly and contained things that were unrelated to the coronavirus.

 

The Senate will consider this legislation in the coming days.

 

Do you support the coronavirus aid legislation?

Republicans, Democrats Fight over Coronavirus Legislation

House Democrats have unveiled a coronavirus aid bill and are pushing for a quick vote. Republicans, however, disagree that the measures in this bill are the best way to deal with the pandemic’s effects.

 

The House Democrats are proposing a variety of initiatives to deal with the coronavirus fallout. These include:

  • $2 billion for state unemployment programs
  • $1 billion in spending on nutrition
  • Medicaid expansion
  • A federal sick-leave program for those affected by business closures

 

Republicans in the House said that they would not vote to support such measures. They want to see relief legislation more along the lines of what President Trump proposed, which included payroll tax cuts.

 

House Speaker Nancy Pelosi is negotiating with White House officials on a bipartisan relief package. Their hope is that they can come up with legislation that is acceptable to both sides. If this occurs, it would likely include both spending increases as favored by the Democrats and tax cuts as favored by the Republicans.

 

The House is scheduled to vote Friday on whatever relief legislation emerges.


What do you think should be in coronavirus relief legislation?

Trump Pushes Tax Cut to Deal with Economic Effect of Coronavirus

The fallout from the coronavirus is already having an effect on the stock market. Analysts think it may have larger ramifications for the global economy. To help give the U.S. economy a boost, President Trump is today talking to members of the Senate about a tax cut.

 

The details of the tax cut have yet to be worked out, but the president has suggested it should be a payroll tax cut. Payroll taxes are levied on income to pay for Medicare and Social Security. Cutting these taxes would affect every worker, especially those with lower incomes. An income tax cut mainly benefits higher-income workers, since lower incomes are not subject to the tax. Payroll taxes, on the other hand, are levied on the first dollar of income, and are capped for higher-income workers.

 

Since 2009, there have been other payroll tax cuts that have been aimed at stimulating the economy. Some economists argue that since they affect lower-income workers, they provide money to go back into the economy more quickly. Some Democrats in Congress are pushing back on President Trump’s proposal, however, saying that such a tax cut would not provide relief to those who lost jobs or who are in the gig economy.

 

President Trump is urging Congress to take action to avoid a recession. It is unclear what the economic effects of the coronavirus will be at this early state. However, if there is widespread restriction on travel and public activity, many businesses will suffer.

 

Do you think that Congress should cut payroll taxes to prevent a recession related to the coronavirus?

President Trump Releases His Budget

President Trump released his annual budget today, which has led to many news stories about how he plans on cutting certain programs or changing the way the federal government works. President Trump may indeed have ideas about how the federal government should spend money, but he cannot do anything alone. The $4.8 trillion budget (an increase of $700 billion over the previous fiscal year) he released is merely the official start of the budget process.

 

The process for determining how much money the federal government will spend in the next fiscal year will take until at least October, more likely longer. There are many steps that Congress must take between now and then until we know how much money individual departments or agencies will receive.

 

The President’s Budget

 

While the law states that the president must submit his budget by the first Monday of February, in many years presidents submit them later (President Trump only missed this deadline by a week – last year he submitted his budget in March). The president’s budget has a few parts:

  • Recommendations on spending for the next fiscal year (which runs from October 1 through September 30)
  • Proposals for major policy changes that have budget implications, such as reforms to programs like Social Security or Medicaid
  • Projections for future spending levels, revenue collections, and budget deficits
  • Historical data on spending and revenue amounts

 

It is important to outline a few things that the president’s budget does not do:

  • It does not set any spending. It merely recommends what the president would like to see spending levels set at.
  • It is not law. This is not the president announcing how spending will proceed in the next fiscal year. If he recommends the elimination of a certain program or cuts in another program, these eliminations or cuts will not happen unless Congress agrees.
  • It does not bind Congress to do anything. The president’s budget is delivered to Congress, but Congress does not have to adopt any of it. In fact, Congress routinely ignores it.

 

So why is the president’s budget resolution important? Its importance lies in laying out the president’s overall vision for federal spending. It indicates the programs he thinks are important, those he thinks should be cut (or eliminated), and often outlines a path towards a balanced budget.

 

However, as a practical matter, the president’s budget resolution does not directly affect spending. It may indicate that, as Congress finishes up its spending process (described below), the president may veto spending bills that deviate from his priorities. Even that is not necessarily true, however, as negotiations over actual spending bills later in the year often ignore the president’s budget priorities in favor of more immediate concerns.

 

President Trump’s Fiscal Year 2021 budget proposal, released on February 10, can be found here.

 

Congressional Budget Resolutions

 

Once the president releases his budget, the House and Senate Budget Committees consider them. The Congressional Budget Office (CBO) also analyzes the budget. The committees consider the CBO analysis and are supposed to release their budget resolutions by April 1. The full House and Senate then consider these resolutions and adopt them, usually with amendments, by April 15.

 

The adopted budget resolutions are not laws, so are not subject to presidential veto. However, they do set the funding allocations that the appropriations committees in each house use to set their spending bills. These committees, described in more detail below, set the actual spending levels for the fiscal year for discretionary government programs (that is, for programs that are not entitlements such as Social Security or Medicaid).

 

While passing a budget resolution is helpful in setting a federal spending blueprint, it is not mandatory. In fact, in Fiscal Years 2011, 2012, 2013, and 2020, Congress did not pass a budget resolution. When that happens, the prior year’s budget resolution sets the spending blueprint that appropriations committees follow.

 

These budget resolutions can also contain “reconciliation instructions.” These are instructions to committees to make changes to the law that have budget implications. The reconciliation process is not subject to a Senate filibuster, and must be considered on a faster timeframe than other legislation. That makes it a useful tool to enact policy that does not have strong bipartisan support.

 

The Appropriations Process

 

The House and Senate Appropriations Committees are the committees that actually set spending levels for discretionary government programs. These committees each have 12 subcommittees that use the budget resolution allocations to determine how much government departments and agencies spend.

 

These 12 appropriations bills are supposed to be completed by Congress and signed by the president by the beginning of the fiscal year, October 1. That rarely happens. This leads to a variety of maneuvers to fund the federal government for temporary time periods or, failing that, a government shutdown.

 

What Does This Mean to You?

 

The budget process is how the government determines how much it will spend on the programs it administers. It also helps determine how much the deficit will be and how much the government will add to the national debt. If this process breaks down due to disagreement between the President and Congress, it could also lead to another government shutdown. Since President Trump has just released his budget, it remains to be seen what will happen with spending, the deficit, and a possible government shutdown this year.

House Passes Bill to Raise Cap on State and Local Tax Deduction

A slim majority of House members approved legislation to increase the amount of state and local taxes that taxpayers could deduct from their federal taxes.

 

By a vote of 218-206, the House approved H.R. 5377. This bill would increase the cap on the federal deduction for state and local taxes from $10,000 to $20,000, and eliminate it entirely for 2020 and 2021. It would also increase the top income tax rate to 39.6% and increase the deductions for some expenses incurred by first responders and teachers.

 

The Trump tax cut bill set a cap on their ability to deduct state and local taxes. Prior to this cap, taxpayers could deduct the full amount of their state and local taxes. While theoretically available to all taxpayers, it generally benefited taxpayers with higher incomes (who are more prone to use itemized deductions rather than the standard deduction) and those who lived in states with higher taxes.

 

The Trump tax bill limited this state-and-local tax deduction to $10,000. In other words, if someone paid $17,000 in state and local taxes, they could only deduct $10,000 instead of the full $17,000. This upset some state officials, especially those who represent states that have a large share of high-income taxpayers paired with high state tax rates.

 

In response, some states passed laws that were an attempt to circumvent this cap. These generally involved classifying taxes in certain circumstances as charitable contributions. Since the tax bill still allowed full deductibility of charitable contributions, this would have allowed these state taxpayers to skirt the state-and-local deduction cap.

 

The Treasury Department issued a rule that essentially invalidated these state laws for federal tax purposes. Earlier this year, Sen. Chuck Schumer, who represents New York, introduced Senate Joint Resolution 50 to disapprove of this Treasury regulation. If passed, the effect of this disapproval resolution would have been to be allow states to pass laws that circumvent the tax cap, essentially repealing it on a state-by-state basis. The full Senate did not agree with Sen. Schumer, however. In October, the resolution failed by a vote of 43-52. The vote was largely along party lines, with only Republican Rand Paul voting for the resolution and Democrat Cory Gardner opposing it.

 

The House bill now heads to the Senate for consideration. Given the Senate’s action on Sen. Schumer’s resolution, it is unlikely that it will succeed in that body.

 

Do you support limiting the amount of state and local taxes that taxpayers can deduct on their federal taxes?

House Passes Short-Term Funding, PATRIOT Act Renewal

This week the House of Representatives passed legislation that temporarily keeps the federal government open. In that legislation, however, House leadership also included a renewal of the controversial PATRIOT Act.

 

As explained in yesterday’s VoteSpotter blog post, Congress failed to pass appropriations bills to fund the federal government this fiscal year. The short-term bill that keeps the government open expires on November 21. There is no final agreement between the Trump Administration and Congress about what the entire year’s government spending priorities should be, so it is necessary for Congress to pass another short-term funding bill, known as a continuing resolution, to prevent a partial government shutdown.

 

As part of that continuing resolution, H.R. 3055, the House leadership also included a provision for a short-term reauthorization of the PATRIOT Act. This bill, passed in the wake of the 2001 terrorist attacks, greatly expanded federal surveillance powers. Some critics contend that it allows the federal government to have sweeping authority over monitoring communication of U.S. citizens. Supporters of the law counter that it is necessary to prevent terrorism.

 

There have been efforts since 2001 to modify parts of the PATRIOT Act. Since this law must be periodically reauthorized, this recurring debate gives critics an opportunity to debate these changes. Members of Congress who are particularly concerned about the PATRIOT Act, such as Rep. Justin Amash (I-MI), were vocal in their criticism of House Speaker Pelosi for including a renewal of the law in the government funding bill. He argued that tying this controversial reauthorization to a must-pass funding bill effectively short-circuits any debate over it.

 

The continuing resolution and renewal of the PATRIOT Act passed the House by a vote of 231-192. Under this bill, funding for the federal government would last through December 20. The PATRIOT Act reauthorization would last through March 2020.

 

Do you support reauthorizing the PATRIOT Act?

Deep Dive: Approving Short-Term Government Spending

This week, the House of Representatives and the Senate will vote on a bill to extend federal government funding until December 20. With government funding set to expire on November 21, failure to do this would result in a partial government shutdown. 

  

A previous Deep Dive examined the budget process that talks about the overall spending blueprint for the federal government. This Deep Dive will discuss the specific part affecting spending – the appropriations process. 

 

 

The Appropriations Process

 

Article I, Section 9, of the U.S. Constitution states: “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

 

Federal government spending is divided into two categories:

  • Mandatory: Programs authorized by Congress that operate outside the regular spending process are entitlement programs, and their spending is deemed “mandatory.” For Social Security, Medicare, and Medicaid, anyone who meets certain qualification is entitled to benefits. Funding for these programs does not have to be authorized yearly by Congress, although the eligibility and payment rules can be changed.
  • Discretionary: To pay for other government activities, ranging from military operations undertaken by the Defense Department to operating national parks to paying congressional staff, Congress must pass 12 appropriations, or spending, bills. These bills operate on a fiscal year basis. If they do not become law, funds cannot be drawn from the U.S. Treasury to pay for the government operations they cover.

 

Appropriations Bills

 

The 12 appropriations bills that should be passed by Congress every fiscal year (October 1 through September 30) are:

  • Agriculture
  • Commerce/Justice/Science
  • Defense
  • Energy and Water
  • Financial Services
  • Homeland Security
  • Interior and Environment
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans
  • State/Foreign Operations
  • Transportation/Urban Development

 

You can see the progress of the Fiscal Year 2020 appropriations bills through Congress here.

 

The number and title of these bills can be changed by Congress. After the 2001 terrorist attacks, Congress re-organized the appropriations process, which at that time had operated with 13 appropriations bills.

 

Consolidated Appropriations/Continuing Appropriations/Omnibus Appropriations

 

While the spending process is supposed to proceed with the 12 bills being passed separately and signed into law by October 1 of each year, this almost never happens. In fact, since 1977 (when the current spending system was put in place), Congress has passed all of the appropriations bills on time in only four years. The last time it did this was 1997. The usual pattern is that Congress passes some, but not all, of the bills to be signed into law by October 1.

 

When this happens, Congress can take a variety of steps to avoid a government shutdown. It can pass a resolution for continuing appropriations, which fund the government for a specified period of time at the level of the previous fiscal year. During this time, it can then pass a consolidated appropriations act, which combines two or more appropriations bills. An omnibus appropriations bill generally wraps all the outstanding appropriations bills into a single act for the rest of the fiscal year.

 

If special spending needs arise during the fiscal year, Congress can also pass a supplemental appropriations bill, which provides funding more money than what was contained in the original spending bill.

 

Fiscal Year 2020

 

To avoid a government shutdown, Congress must pass these 12 spending bills (either in individual or consolidated form) and the president must sign them. So far this year, the House of Representatives has passed 10 bills (with only Homeland Security and Legislative Branch still remaining to be approved). The Senate has passed none. 

 

 

Instead of completing work on the individual spending bills by October 1 (the beginning of the new fiscal year), the House of Representatives and the Senate passed a continuing resolution, a short-term bill that funds the government at the previous fiscal year's level.  This legislation funded the government through November 21. If Congress does not act on another bill, or the president does not sign one, then there would be a partial government shutdown.

 

The 2018-2019 Government Shutdown

 

The last government shutdown occurred from December 2018 to January 2019. The beginnings of this shutdown began a year ago, with the failure of Congress to pass the necessary spending bills. Prior to the beginning of Fiscal Year 2019 (which began on October 1, 2018), Congress had only passed these appropriations bills:

  • Defense
  • Energy and Water
  • Labor/Health and Human Services/Education
  • Legislative Branch
  • Military/Veterans

 

Continuing resolutions funded the government agencies covered by the other appropriations bills through December 21. President Trump signaled his opposition to signing any spending bills that did not contain funding for a wall on the U.S.-Mexican border. As a consequence, the agencies not covered by the already-passed appropriations bills were shut down on that date.

 

The parts of the government that were covered by these spending bills could continue to operate as normal, however. Since the Legislative Branch appropriations bill was signed into law, congressional staffers could continue to be paid their salary. So could employees of the Energy Department, Defense Department, the Labor Department, the Department of Health and Human Services, and the Education Department.

 

When President Trump signed House Joint Resolution 28 on January 25, this reopened the portions of the federal government that were shut down until February 15. The signing of House Joint Resolution 31 by President Trump funds the federal government through the end of Fiscal Year 2019.

 

What This Means for You

 

The two-year budget deal that House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, and President Donald Trump agreed to over the summer was designed to eliminate the possibility of a government shutdown this year or next year. However, there is still disagreement between Republicans and Democrats in Congress over border funding. It appears that the leadership in the House and Senate as well as President Trump have agreed in principle to another short-term funding bill. That legislation, H.R. 3055, is set to be voted on by Congress this week. It will keep the government open until December 20. This gives negotiators more time to come to an agreement that has the possibility of funding the federal government through the end of this current fiscal year, avoiding a partial government shutdown.

Texans to Vote on Prohibiting an Income Tax

Voters in Texas are poised to amend their constitution to make it more difficult to impose a state income tax.

 

Proposition 4 is among 10 ballot measures facing voters tomorrow in the Lone Star State. It mandates that any proposal to enact a state income tax would require a two-thirds vote of the state legislature to put it on the ballot and then approval from two-thirds of the state’s voters.

 

The Texas constitution currently bans a state income tax, but allows one to be approved if a majority of the legislature puts it on the ballot and a majority of voters approve it. Under the current provision, revenue from such a tax could only be used for property tax relief or to increase education funding.

 

Supporters of Proposition 4 say it is necessary to ensure that it is difficult to enact an income tax. They say that Texas has a business-friendly reputation and tax structure, and this amendment would enhance these things. They argue that it will impose fiscal discipline on the state’s policymakers.

 

Opponents counter that this amendment is unnecessary. They point out that the state constitution already prohibits an income tax and requires voter approval prior to its enactment. They also argue that increasing the burdens for seeking an income tax in the future will tie the hands of policymakers in the future who may need more state revenue as Texas grows.

 

Do you support requiring approval of two-thirds of the state’s voters before Texas imposes an income tax?

Warren Unveils Tax Plan to Pay for Medicare-for-All

Both Senator Elizabeth Warren and Senator Bernie Sanders have embraced Medicare-for-All during their campaign for the Democratic presidential nomination. But while Sen. Sanders has been blunt that his plan would require new taxes, Sen. Warren has been less clear about how she would pay for this new federal plan. Today she added clarity to her proposal by outlining a plan to fund her expansion of government health care.

 

Under Sen. Warren’s proposal, here is how she would cover the costs of Medicare-for-all:

  • Tax businesses the amount they are currently paying for their part of employer-sponsored health insurance.
  • Increase efforts to stop tax evasion and avoidance.
  • Impose a new tax on financial transactions.
  • Impose a new tax on larger banks.
  • Modify the tax deduction for corporate depreciation.
  • Impose a new tax on companies that have presences in other countries.
  • Impose a new tax on taxpayers with assets over $50 million.
  • Impose capital gains on a yearly basis instead of when the gains are realized through sales.
  • Reform immigration laws to allow more immigrants to come to the U.S., which Warren says will result in more tax revenue.
  • Cut defense spending.
  •  

There is some dispute over how much federal spending would have to rise with Medicare-for-All. Some estimates put it at $34 trillion over 10 years. That is roughly the amount of all the current federal entitlement programs combined.

 

Senators Sanders and Warren say that Medicare-for-All will not be new spending, but will be a shift in spending. They say that the money currently being spent in the private and government health care sectors, on things such as private insurance or Medicaid, would be replaced by Medicare-for-All spending. In fact, in her plan, Sen. Warren says that companies would ultimately spend less via her new health care tax than they spend paying private insurance premiums.

 

Critics counter that this would be a huge expansion of federal spending that will likely be much more expensive than projected. They also note that this would be a massive re-alignment of how Americans receive their health care, with private insurance being outlawed in most instances.

 

Do you support new taxes on businesses and high-income taxpayers to pay for Medicare-for-All?

 

 

 

Senate Fails to Overturn Cap on State and Local Tax Deductions

As part of the Trump tax cut bill, many taxpayers got a tax cut. Some, however, saw their tax deductions limited. This was especially true for high-income taxpayers, who saw a cap on their ability to deduct state and local taxes. A move in the Senate to allow states to do an end-run around this cap was defeated this week.

 

Prior to the Trump tax cuts, taxpayers could deduct the full amount of their state and local taxes. While theoretically available to all taxpayers, it generally benefited taxpayers with higher incomes (who are more prone to use itemized deductions rather than the standard deduction) and those who lived in states with higher taxes.

 

The Trump tax bill limited this state-and-local tax deduction to $10,000. In other words, if someone paid $17,000 in state and local taxes, they could only deduct $10,000 instead of the full $17,000. This upset some state officials, especially those who represent states that have a large share of high-income taxpayers paired with high state tax rates.

 

In response, some states passed laws that were an attempt to circumvent this cap. These generally involved classifying taxes in certain circumstances as charitable contributions. Since the tax bill still allowed full deductibility of charitable contributions, this would have allowed these state taxpayers to skirt the state-and-local deduction cap.

 

The Treasury Department issued a rule that essentially invalidated these state laws for federal tax purposes. Sen. Chuck Schumer, who represents New York, introduced Senate Joint Resolution 50 to disapprove of this Treasury regulation. If passed, the effect of this disapproval resolution would to be allow states to pass laws that circumvent the tax cap, essentially repealing it on a state-by-state basis.

 

The full Senate did not agree with Sen. Schumer, however. On Wednesday, the resolution failed by a vote of 43-52. The vote was largely along party lines, with only Republican Rand Paul voting for the resolution and Democrat Cory Gardner opposing it.

 

Do you support limiting the amount of state and local taxes that taxpayers can deduct on their federal taxes?

Sanders Unveils His “Wealth Tax”

Senator Bernie Sanders has few good things to say about Americans who earn high incomes. In his run for the Democratic nomination, he has made targeting the wealthy a centerpiece of his campaign. Now he has a tax plan that takes aggressive aim at this group.

 

Today Sen. Sanders released a plan that would impose a wealth tax on higher-income households. This is how the new tax surcharge would escalate:

  • 1% tax on married couple wealth above $32 million and single individual wealth above $16 million
  • 2% tax on married couple wealth above $50 million and single individual wealth above $25 million
  • 3% tax on married couple wealth above $250 million and single individual wealth above $125 million
  • 4% tax on married couple wealth above $500 million and single individual wealth above $250 million
  • 5% tax on married couple wealth above $1 billion and single individual wealth above $500 million
  • 6% tax on married couple wealth above $2.5 billion and single individual wealth above $1.25 billion
  • 7% tax on married couple wealth above $5 billion and single individual wealth above $2.5 billion
  • 8% tax on married couple wealth above $10 billion and single individual wealth above $5 billion

 

According to the Sanders campaign, this tax plan would cut the wealth of American billionaires in half. The campaign also says it would produce $4.35 trillion over 10 years. That new revenue would help pay for a variety of costly plans that Sanders has outlined on the campaign trail, such as student loan forgiveness, Medicare-for-all, and universal child care.

 

Proponents of the Sanders plan justify it as a way to equalize what they say is an extreme gap between wealthy Americans and everyone else. They argue that the government has a role to take some of this wealth and use it for social programs that benefit the public. Opponents counter that this plan would discourage individuals from investing and working, leading to fewer jobs created and lower economic growth. They also note that wealthy Americans can take steps to avoid the tax, so it will likely produce far less income than the Sanders campaign predicts.

 

Among the individuals running for the Democratic nomination, Elizabeth Warren has also proposed a wealth tax. The Sanders plan is more aggressive than the tax program outlined by Warren.

 

Do you support a special tax on individuals who earn more than $16 million?

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