• Allon Advocacy

The Bare Minimum: What Congress Actually HAS To Do This Year

Although it will be quiet much of the rest of the year, the Capitol will see a flurry of activity -- in spurts -- over the rest of 2020.

Members of Congress are have been back in their home states and districts for the last two weeks and won’t return to Washington until July 20. They will have a few days to negotiate a potential new COVID-19 stimulus bill when they come back (click here for our take on those negotiations), but then lawmakers will recess again for their annual month-long August recess. Then they’ll come back for a short post-summer session this fall before recessing again to afford members the opportunity to campaign in the lead-up to the November elections.

It seems like a lot of time off, especially considering everything that remains on the U.S. House and Senate’s to-do list for the rest of the year. Congress will have to deal with several hard deadlines before members can close the books on the 116th Congress at the end of this year.

The first deadline relates to one that already has passed. Key provisions of the controversial Foreign Intelligence Surveillance Act expired in March. The Senate passed a renewal in May, but the House has yet to act—although House Speaker Nancy Pelosi (D-Calif.) recently indicated she is open to passing legislation that would address Democrats’ concerns about the intelligence-gathering legislation.

The next hard deadline relates to the pandemic. By the end of this month, lawmakers will have to decide whether to extend enhanced federal unemployment benefits. As The Wall Street Journal explains, Congress enacted temporary, additional unemployment benefits earlier this year in response to the pandemic. Under the temporary measure, unemployed workers are eligible for an additional $600 a week in extra jobless benefits. If Congress does not act by July 31, however, those benefits will be reduced to whatever an individual’s state of residence permits them based on their past earnings.

Democrats want to extend the increased aid, but as The Journal also notes “those extra benefits left many jobless workers with higher incomes than they had on the job”—so Republicans are somewhat less open to the idea.

Next on the list of must-pass legislation are the annual appropriations bills that provide discretionary funding to every federal agency and program – a total of just about $1.3 trillion in spending. The coronavirus crisis delayed a lot of the preliminary negotiations on these bills, which must be signed into law by the president by midnight on September 30 or federal government operations will shut down the next day.

As Bloomberg Government Editorial Director Loren Duggan said, “[Lawmakers] are trying to get through all the work that they normally do over several months into basically a two week period.” Indeed, appropriations committee and subcommittee members have been working diligently over their July break to write and move along these pieces of legislation. House committees already have approved seven of the 12 spending bills they need to pass to avert a government shutdown this fall. Those votes should allow the full House to quickly consider these pieces of legislation either in late July or when they return in September.

Senate spending panels, however, have yet to vote on even one appropriations bill. (As with any other type of legislation, the House and Senate normally each write their own version of a bill, move it through that chamber’s approval process, and then reconcile the two versions of the bills so lawmakers can consider a final version.) It will be a long September, and one that is likely to result in Congress trying to pass some sort of last-minute, stopgap measure that prevents a shutdown.

The fiscal year 2021 spending bills are not the only legislation that Congress must back by the end of September.

The Atlantic Coast hurricane season already has started and federal lawmakers must reauthorize the National Flood Insurance Program (NFIP) by September 30 or it will expire. The NFIP provides insurance to home- and business owners in flood-prone areas. As the National Association of Realtors explains, there is a 30-day grace period after the authorization deadline and the program can pay insurance claims as long as it has money, but “the federal requirement to purchase flood insurance” would be suspended if NFIP lapses. That means it would be “up to lenders to decide whether to make loans in special flood hazard areas while NFIP insurance is not available.” In other words: riskier loans at a time when there already is a lot of economic uncertainty.

The nation’s current surface transportation authorization program also expires on September 30. Often referred to as the “highway bill,” the 2015 Fixing America’s Surface Transportation (FAST) Act authorized roughly $280 billion over five years and extended highway and transit programs through FY 2020. What happens if Congress cannot reach agreement?

Perhaps the most alarming consequence is job losses. As transportation expert John Barton explained back in February, “The people in affected transportation agencies would be furloughed and, according to the Office of Personnel Management, these agencies would have to ‘shut down any activities funded by annual appropriations that are not excepted by law.’” Barton noted that, in effect, this means “no permits or project approvals would be issued and federal reimbursement payments to the states would likely cease. Also, any state-funded projects with a federal nexus – such as those needing air quality or endangered species impact reviews – would be affected. Almost immediately, any new transit projects nationally would be stopped in their tracks.” This at a time when unemployment in the U.S. is reaching historic highs due to the pandemic.

Federal lawmakers also face several deadlines that hit on December 31, 2020.

Unless Congress acts, borrowers who received loans from the U.S. Small Business Administration’s Paycheck Protection Program must restore their workforce levels and wages to the pre-pandemic levels before December 31 in order to be eligible for full loan forgiveness. (As The Journal of Accountancy explains, this deadline originally was June 30, 2020, but Congress extended it earlier this summer.) In addition to providing more generous unemployment benefits, federal lawmakers also have allowed Americans taking federal unemployment benefits for a longer period of time, up to 39 weeks. That allowance also expires on December 31.

Also on tap (pardon the pun) for the end of the year: an increase in federal excise taxes on beer, wine, and distilled spirits. At the end of 2019, President Trump signed the Craft Beverage Modernization and Tax Reform Act, which cut the $7 tax on domestic beer producers in half. For distillers, the legislation cut the federal excise tax from $13.50 to $2.70. That legislation expires on the last day of this year, meaning the cost of your drinks (whether served at home or in a restaurant or bar) will go up in 2021 unless Congress acts.

That’s not all when it comes to tax policy. At the end of 2019, the president also signed into law several one-year extensions to tax programs. Also set to expire on December 31 barring Congressional intervention:

  • The New Markets Tax Credit, which incentivizes business and real estate investment in low-income areas;

  • The employer tax credit for paid family and medical leave;

  • The Work Opportunity credit, which incentivizes private-sector businesses to hire workers from certain target groups that have historically faced barriers to employment; and

  • Several additional tax incentives for employment and economic growth and for energy production and efficiency.

Also expiring (or at least shrinking): taxpayers’ ability to deduct medical expenses. Right now, any expenses that are above 7.5 percent of a taxpayer's adjusted gross income can be deducted. On January 1, 2020, that threshold will rise to 10 percent, meaning a taxpayer’s costs have to be higher in order to be eligible for the deduction.

Some lawmakers are willing to forgo some of their recess time in order to get all of these things done. Earlier this week, House Speaker Nancy Pelosi (D-Calif.) said “we absolutely have to” pass another COVID-19 relief bill, and that she would delay or cancel her chamber’s August recess to get it done. House Majority Leader Steny Hoyer (D-Md.) said lower chamber lawmakers would return if necessary in August, but in a letter to his colleagues he also said, “It is my hope that the House can complete its work on all of these items in a responsible and timely fashion and in a way that does not infringe on Members’ previously scheduled work as part of the August District Work Period.”

Assuming lawmakers are not around during much of August (a safe bet), expect a very frantic fall. And don’t look now, but an increase or further suspension of the debt ceiling – Congress’ authorization of the Department of Treasury’s ability to take on debt to fund government operations – is due by next July.

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