By Stephen K. Cooper

Law360 (March 4, 2021, 8:32 PM EST) -- The Senate began consideration Thursday of its version of President Joe Biden's $1.9 trillion novel coronavirus pandemic relief plan, which includes about a half-dozen tax policy changes that lawmakers must approve as they push toward passage by the weekend.

Senate lawmakers must vote on modifications and amendments to the American Rescue Plan, or H.R. 1319, a bill that would provide $1,400 economic stimulus payments for individuals, enhanced tax credits for families, workers and businesses, and help for financially troubled pension plans and student borrowers, among other relief.

The House approved the measure early Saturday, and any Senate changes will either require the House to vote on the Senate version of the bill or engage in a conference to work out differences. Congressional Democrats want to send the pandemic relief legislation to the White House before March 14, when federal jobless benefits signed into law in December will expire.

Senate Majority Leader Chuck Schumer, D-N.Y., said the time is right for Congress to help the economy recover and provide relief from the coronavirus pandemic, which has taken the lives of more than 500,000 Americans since last March.

He said Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and many trusted economists are telling us "plain as day" that the U.S. economy isn't ready to go solo.

"Our recovery is deeply uncertain," Schumer said on the Senate floor. "The risk of doing little is far greater than doing too much."

The Senate is expected to work on the legislation possibly into the weekend after the Senate clerk was forced to read the entire 628-page bill due to a delaying tactic by Sen. Ron Johnson, R-Wis. Lawmakers are expected to debate the bill for up to 20 hours in addition to casting votes on an unlimited number of GOP amendments. 

During the past several days, Senate Democrats have been meeting behind closed doors to discuss changes in the virus relief measure to shore up the necessary 50 votes to win passage under expedited budget rules. With a tie-breaking vote from Democratic Vice President Kamala Harris, the legislation can pass without support from the chamber's 50 Republicans.

Under the Senate Democrats' amendment, the $1,400 stimulus payments from the Internal Revenue Service would go to individuals with adjusted gross income of $75,000 or less and be phased out at the $80,000 income level, according to a summary provided by an aide of the Senate Democrats. Couples with adjusted gross income of $150,000 would qualify for the checks, with a phase out at $160,000. 

The Senate bill would not allow the stimulus checks to go to nonresident alien individuals, estates or trusts and certain dependents.

The House bill includes higher phase out limits of $100,000 for individuals and $200,000 for couples. The change would drop the cost of the stimulus check from $422.3 billion over the next decade to $410.6 billion, according to a new estimate of the Senate Democrats' amendment to the legislation from the Joint Committee on Taxation.

The JCT estimated that the tax provisions in the Senate bill would total $589.6 billion compared with $585.6 billion for the House version of the legislation.

Other tax changes in the Senate Democrats' bill would allow payroll tax credits to reimburse paid sick and family leave made by employers under union contracts, according to the summary.

The bill expands the employee retention tax credit to more employees and startup businesses and allows tax-free relief of student loan debt. It expands the $1 million limit on deducting employee compensation beyond the chief executive, chief financial officer and the next three highest paid employees. The Democrats would add the five next highest paid employees beginning in tax years after 2026. 

In addition to making changes to tax policy, the Democrats' amendment would alter provisions in many sections of the legislation, including those dealing with funding for public broadcasting, childhood education, housing in Hawaii, cybersecurity and veterans health care, among other changes. 

The Senate bill keeps provisions that allow poorer Americans to qualify for premium tax credits for health insurance, extend federal jobless benefits to the fall, expand child tax credits and provide financial assistance to multiemployer pension plans, among other tax incentives. It's intended to provide funding for a national vaccination plan, safely reopen schools, protect frontline health care workers and grant emergency loans to small businesses. 

Due to concerns raised by the Senate parliamentarian, the minimum wage provision was knocked out of the Senate version of the bill. 

The bill would provide $350 billion in funding to state, local, tribal and territorial governments that can be used to replace lost, delayed or lowered revenue from the pandemic. It would send $20 billion to tribal governments to use for direct COVID-19 relief for personal protective equipment, internet access, telemedicine, clean water and electricity development. It also would allow the Pension Benefit Guaranty Corp. to provide direct assistance to roughly 200 financially struggling union pension plans. 

Senate Minority Leader Mitch McConnell, R-Ky., criticized the Democrats for overstepping the need for pandemic relief, especially after Congress has already passed more than $4 trillion in help since last March. He said the economy is already primed for a rebound this year as more Americans receive vaccines. 

"Washington Democrats are trying to exploit the last chapters of this crisis to pass the most progressive domestic legislation in a generation," McConnell said on the Senate floor. "They told Republicans take it or leave it."
 
--Editing by Neil Cohen.

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