A House bill tackling the economic fallout of the coronavirus is facing additional hurdles as Republican lawmakers seek changes that could delay passage for days.
The Families First Coronavirus Response Act (H.R. 6201) was expected to sail through the Senate on March 16 after it was approved by the House 363 to 40 on March 14.
But the bipartisan plan to quickly move the measure to President Trump’s desk started unraveling after it was announced over the weekend that technical changes were necessary before it made its way to the Senate. Those changes were expected to be approved in the House by unanimous consent — a parliamentary procedure to fast-track legislation without requiring the presence of all lawmakers to vote on the bill.
But Rep. Louie Gohmert, R-Texas, objected to quickly approving the changes in the bill, arguing that the technical changes are long and being written by Democrats. “I cannot in good conscience give my consent to something that has not been finished or made available to Members of Congress before it is up for a vote,” he said in a release March 16. Gohmert later released his hold on the bill after noting that the technical changes made the bill better, allowing it to move to the Senate.
But even with the bill’s passage to the upper chamber, there was no guaranteeing that the Senate will rubber-stamp the measure.
Sen. Tom Cotton, R-Ark., has been one of the bill’s loudest critics. Although he supports many parts of the bill, he said it doesn’t go “far enough and it doesn’t go fast enough.”
A late add to the House bill as passed was refundable tax credits for small and medium-size businesses to cover paid sick leave for employees affected by the coronavirus. The credits would also be available to eligible workers who are self-employed.
The payroll tax credit would give employers 100 percent of the sick leave wages paid to employees who are under self-quarantine or getting tested for the coronavirus, with a maximum wage of $511 per day. For employees caring for a family member affected by the coronavirus, the credit covers up to $200 a day.
But this tax credit won’t help a business that has no revenue because it’s closed, Cotton said. Instead he suggested an immediate tax refund for anyone who filed returns last year.
“That can be done almost instantly,” Cotton said. Some in the business community agree that the credit brings uncertainty. Todd McCracken, president of the National Small Business Association, told Tax Notes that while he’s pleased to see credits offsetting payroll taxes rather than income taxes, the current structure and lack of clarity are concerning.
“We don’t know when companies would get the credit back,” McCracken said. “A lot of companies are on very thin margins. A couple of weeks could be too long.” A better solution would be a system that excludes companies entirely and allows the government to pay workers directly for sick leave, he said.
Trump Adds Confusion
Although the administration worked with House Speaker Nancy Pelosi, D-Calif., on the coronavirus bill, Trump appeared to back efforts by Republicans to delay the bill’s passage by adding more language.
One provision that has caused some problems among Republicans is that companies with more than 500 workers are exempt from the paid sick leave mandate. Trump told reporters during a White House news briefing that “they’re looking at that through the Senate,” and later added that the Senate will work with the House on the measure that was approved.
Sen. Patrick J. Leahy, D-Vt., however, pointed the finger at the administration for the provision exempting large companies like Amazon.com Inc. and Walmart Inc., saying it was the price to secure White House support for the bill. Leahy urged Republicans delaying approval of the measure to back down. “We don’t have time for lengthy delays,” he said.
More to Come
While lawmakers continue to debate passage of the coronavirus package, there is a consensus that further legislative relief will be drafted. McConnell said that consultations with his colleagues demonstrated that the House bill will be only the “beginning of Congress’ efforts to secure our economy and support American families.”
Senate Finance Committee Chair Chuck Grassley, R-Iowa, confirmed that a package is “under development between several committees in the Senate to help families and businesses with immediate cash-flow needs.”
The U.S. Chamber of Commerce recommended in a March 16 letter to House and Senate leadership canceling the payment of all payroll taxes paid by employers from March through May.
A payroll tax holiday remains an important issue for the president. However, over the weekend, Treasury Secretary Steven Mnuchin said the administration is open to other options. Trump still likes the idea of a payroll tax cut, but he’s also willing to consider refundable tax credits, Mnuchin said March 15 on Fox News Sunday.
The Chamber of Commerce, which is the largest advocacy group for businesses, wants the federal government to suspend or increase the limitations on tax preferences such as interest deductions and net operating losses.
Jonathan Curry contributed to this article.
Update, March 17, 2020: This story was updated to reflect that the House bill was modified late on March 16 and sent to the Senate.