House Passes Final COVID-19 Reconciliation Bill Providing More Than $58 Billion in Housing and Small Business Assistance, President Biden Expected to Sign it into Law Soon

Published by Peter Lawrence on Wednesday, March 10, 2021 - 12:00am

Today, the House passed H.R. 1319, the American Rescue Plan Act, as amended by the Senate on March 6, the final version of the COVID-19 reconciliation bill. President Joe Biden is expected to sign the bill into law soon.

The bill is similar to initial $50 billion authorized in provisions of the COVID-19 reconciliation bill released by House committees in February and summarized by Novogradac.  See below for a summary of the key changes from that initial House version.

Financial Services Committee

  • Rental assistance. $27.4 billion total in rental assistance (increased from $25 billion in the initial House reconciliation bill)
    • $21.6 billion in emergency rental assistance administered by Treasury, similar to the $25 billion initial allocation of rental assistance passed in December (increased from $19.05 billion in the initial House reconciliation bill)
      • $152 million small state minimum (down from $200 million as authorized in December)
      • $305 million set aside for territories (down from $400 million as authorized in December)
      • New $2.5 billion set-aside of total distributed to “high-need” communities, based on the number of very low-income renter households paying more than 50% of income on rent, or living in substandard or overcrowded conditions, rental market costs, and employment trends
      • Extends deadline to spend December allocation of $25 billion emergency rental assistance from Dec. 31, 2021 to Sept. 30. 2022
  • State Small Business Credit Initiative. Due to the Senate “Byrd Rule” regarding what type of provisions are allowable under reconciliation, the requirement for states to provide a detailed plan on Community Development Financial Institution (CDFI)/Minority Depository Institution (MDI) participation was removed from the final bill.

Ways and Means Committee

  • Economic Impact Payments. The phaseout for the $1,400 economic impact payments changed:
    • Phaseout for single taxpayers now ends at $80,000 instead of $100,000 in the initial House reconciliation bill.
    • Phaseout for married joint filers now ends at $160,000 instead of $200,000 in the initial House reconciliation bill.
  • Federal Unemployment Insurance. The weekly amount and duration have changed:
    • The weekly federal unemployment insurance benefit was reduced to $300 from the $400 in the initial House reconciliation bill. This is the same weekly amount as authorized in the December COVID-19 relief law.
    • The duration of the benefit is extended to Sept. 6 from Aug. 29 in the initial House reconciliation bill and March 14 as originally authorized by the December COVID-19 relief law.

Education and Labor Committee

As Novogradac anticipated, the $15 per hour federal minimum wage provision was removed after a “Byrd Rule” challenge. However, Biden and congressional Democrats have pledged to pursue the proposal, possibly with some changes, in future legislation and considered under “regular order” requiring 60 votes in the Senate. Some Republican Senators have put forward their own proposals to increase the federal minimum wage, suggesting that it may be possible for such an increase to receive 60 votes.

Outlook

If enacted as expected, the bill represents a tremendous victory for Biden and congressional Democrats, as it represents a significant set of resources and substantial expansion of the nation’s safety net.  Attention will soon turn to other major legislative priorities, such as infrastructure and immigration.  Biden and congressional Democrats have not yet finalized their strategy to enact those priorities, but they may turn to using budget reconciliation again due to expected Republican opposition.

The first step needed for that option is Biden’s fiscal year (FY) 2022 budget request.  The administration is currently expected to submit a “skinny” version of the FY 2022 budget request in April with the top-line budget details necessary for a FY 2022 budget resolution. That submission has been delayed by a variety of factors, including the withdrawal of Neera Tanden as the nominee for the U.S. Office of Management and Budget. The “skinny” request would be followed some weeks later by the detailed budget request. Congressional Democrats could decide to include reconciliation instructions in that FY 2022 budget resolution for infrastructure and/or immigration reform.

Given that Congress had already passed a FY 2021 spending bill, it was much easier for Congressional Democrats to pass FY 2021 budget resolution to include the reconciliation instructions for COVID-19 relief. It will be much harder and take more time to pass a FY 2022 budget resolution to unlock the process for a reconciliation bill to pass infrastructure and/or immigration reform.

However, if a FY 2022 budget resolution with reconciliation instructions is passed, it could provide a legislative vehicle for low-income housing tax credit, new markets tax credit, historic tax credit, and renewable energy tax credit provisions similar to what was included in the House infrastructure bill passed last July. Stay tuned.