The House on February 27 approved  219-212 a budget reconciliation bill (H.R. 1319) reflecting President  Biden’s $1.9 trillion COVID relief plan, sending the bill to the Senate  for consideration. The American Rescue Plan Act would provide  direct payments, a child tax credit expansion in the form of direct  payments, an international tax change, extended unemployment benefits,  COBRA subsidies and ACA tax credit enhancements, relief for pension  plans, state & local funding, and other provisions. Two Democrats  voted against the bill (Reps. Golden D-ME and Schrader D-OR) and no  Republicans voted in favor.

The  House bill includes a minimum wage increase to $15/hour, but the Senate  Parliamentarian’s ruling that the provision violates budget  reconciliation rules means it is likely to be stripped out by the  Senate, where Democratic leaders are considering alternatives like  imposing a tax penalty for corporations that don’t pay $15/hour or  another amount. Other provisions being evaluated for compliance with  budget reconciliation rules include COBRA subsidies and multiemployer  pension provisions, and language on child tax credit payments to be sent  out by the IRS was changed to comply with the rules.

If  the House bill is changed by the Senate, a conference process to  resolve differences may be necessary or, at the very least, another  House vote on the final version will be required before the President’s  signature. Other potential changes include steering more of the House  bill’s $350 billion in state and local government funding toward  broadband investment, as some Senate Democrats want. Democrats want the  bill enacted before pandemic UI programs expire March 14, after which  President Biden is set to outline his next major bill with  infrastructure as the focus.

The  Congressional Budget Office has confirmed in a letter to House Minority  Leader Kevin McCarthy (R-CA) that the relief package would trigger  mandatory cuts to Medicare of $36 billion and as much as $90 billion in  other programs due to statutory Pay-As-You-Go (PAYGO) requirements. The  cuts would take effect within 15 days of the end of the Congressional  session barring the enactment of subsequent legislation that would  offset the deficit increase, waive the bill’s effect on the PAYGO  scorecard, or otherwise mitigate or eliminate the PAYGO requirements.

Some provisions of the House bill are described in brief below.

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