$1.9 Trillion COVID-19 Relief Reconciliation Bill Provides $50 Billion in Assistance for Renters, Homeowners and Small Businesses; Includes $1,400 per Person Checks Among Other Provisions

Published by Peter Lawrence on Tuesday, February 9, 2021 - 12:00am

The House Financial Services Committee (FSC) released its portions of the COVID-19 relief legislation Friday. The legislation is expected to be considered under budget reconciliation rules and will be considered Wednesday. This $75 billion Financial Services Committee bill is expected to be approved by the end of the week and will ultimately be added to the much larger $1.9 trillion COVID-19 relief legislation, similar to what is called for in President Biden’s COVID relief plan, the American Rescue Plan.

The Financial Services Committee legislation contains $50 billion to support additional housing and community assistance related to the pandemic, including:

  • $25 billion in additional Emergency Rental Assistance
    • $19.05 billion emergency rental and utility assistance, administered by Treasury, in addition to the $25 billion approved in December 2020 COVID-19 relief
    • $5 billion emergency Section 8 Housing Choice Vouchers,
    • $750 million for Indian Housing Block Grant and Indian Community Development Block Grant programs,
    • $100 million for U.S. Department of Agriculture (USDA)-subsidized rental housing, and
    • $100 million for NeighborWorks America for housing counseling funding for renters and homeowners;
  • $5 billion for homelessness funding administered by HUD through the HOME program formula to finance supportive services, affordable housing and acquisition of non-congregate shelter, such as hotels;
  • $10 billion Homeowner Assistance Funding
    • $9.961 billion in grants to states, territories and tribes administered by Treasury to provide mortgage assistance and funding, covering property taxes, property insurance, utilities and other housing-related costs, and
    • $39 million for USDA single-family Section 502 direct mortgage and Section 504 very low-income home repair loans;
  • $10 billion for State Small Business Credit Initiative, a 2010 Obama-era initiative administered by Treasury to assist small businesses, including
    • $2.5 billion supporting small businesses owned by socially and economically disadvantaged individuals,
    • $500 million for tribal government programs,
    • $500 million for technical assistance to small businesses that need legal, financial and other kinds of advice in applying for small business support programs, and
    • Requires detailed plan from states on Community Development Financial Institution (CDFI)/Minority Depository Institution (MDI) participation.

The House Ways and Means Committee released Monday its portions of the COVID-19 reconciliation bill covering the $940 billion in$ pandemic relief provisions within its jurisdiction, and like the Financial Services Committee, is expected to approve the legislation by the end of the week. As expected, no provisions directly affecting community development tax incentives were included, but economic relief targeted low-income households is expected to help such households afford their housing. Much of the legislation extends provisions of the December 2020 COVID-19 relief law and the March 2020 CARES Act. Highlights of the provisions include:

Provides additional economic impact payments

  • Provides households an additional direct payment of $1,400 per person, including dependent children and non-child dependents
    • When combined with the economic impact payments authorized in December 2020 COVID-19 relief law, brings total relief to $2,000 per person.
    • Payments begin to phase out at $75,000 for single taxpayers, $150,000 for joint fliers
    • Single taxpayers with $100,000 and joint fliers with $200,000 would receive no assistance

Extends and expands federal unemployed insurance benefits

  • Extends temporary federal unemployment insurance and benefits through Aug. 29, 2021.
  • Increases the weekly benefit from $300 to $400.

Expands income security tax credits targeted to low-income workers and families

  • Enhances the earned income tax credit (EITC) for workers without children by nearly tripling the maximum credit and extending eligibility.
  • Expands the Child Tax Credit to $3,000 per child ($3,600 for children under 6), and makes it fully refundable and advanceable, starting in July.
  • Helps families access high-quality child care by expanding the Child and Dependent Tax Credit (CDCTC) to allow families to claim up to half of their child care expenses.

Upon passage, the Financial Services and Ways and Means Committee legislation will be added to several other legislative sections written by other committees, including an increase to a $15 per hour federal minimum wage small business assistance through PPP extensions and new Economic Injury Disaster Loans (EIDLs) funding, food assistance, and other pandemic relief provisions.

After House consideration and approval expected as soon as next week, the Senate will consider similar COVID-19 relief legislation, likely after the impeachment trial for former President Trump, which starts Feb. 9. Before the legislation can be considered on the Senate floor, it will be reviewed for budget reconciliation "Byrd Rule" points of order which stipulates which proposals may be included under budget reconciliation.

The $15 per hour federal minimum wage provision may be removed after a “Byrd Rule” challenge, although Feb. 8 the Congressional Budget Office estimated the proposal would cost the federal government $54 billion over 2021-31, which suggests it may survive such a challenge. Novogradac will soon post a blog analyzing the impact of the federal minimum wage increase proposal on affordable rental housing.

Although it is not yet confirmed, it appears likely at this point that there are 50 votes plus the tie-breaking vote of Vice President Harris necessary for Senate passage of the $1.9 trillion COVID-19 relief legislation by the self-imposed deadline of March 14, which is when the unemployment insurance benefits from the December 2020 COVID-19 relief law expire.