Congress Passes Huge Government Spending, COVID Relief Bill Ahead of Break

Late December 21, both the House and Senate passed what many observers called the largest piece of legislation in American history. The 5,593-page bill, which was given to legislators just a few hours before the vote, included an omnibus appropriations bill to fund the government until October 2021, the fifth Coronavirus Relief Act, and the Water Resources Development Act of 2020, which we discussed in a previous Think Tank blog.

The Senate failed to pass even one of the 12 previous appropriations bills and a fifth coronavirus relief program has been delayed since July by both congressional inaction caused by COVID-related absences from Washington and partisan politics leading up to the November election. In the end, the final legislation was the product of intense negotiations between the House and Senate leadership and the Trump administration over the past two weeks. The Senate passed the bill with a 92-to-6 vote just before midnight, two hours after the House easily passed it.  President Trump, after some stalling, signed the bill into law late Sunday evening.

The bill prevented a midnight government shutdown and reflected a growing concern about the spike in coronavirus cases and deaths, and recent signs that the economy is weakening substantially. Nine months after the pandemic upended the U.S. economy, government leaders are still scrambling to try to contain the extensive damage visited upon millions of households and businesses in every state.  

The measure contains $900 billion in various forms of relief. The COVID-19 stimulus will be added to the $1.4 trillion omnibus spending bill. The final package will also contain a significant amount of unfinished legislation on taxes, energy, education and health care.  

Here are some highlights: 

Water & Development 

In addition to passage of WRDA, a big win for ILTA and our partners in the Maritime Coalition, the bill included the FY21 Energy & Water Development appropriations bill that funds the Army Corps of Engineers. FY21 funding for the Corps is $7.8 billion, an increase of $145 million above the record FY20 level and $1.8 billion above the Trump administration’s FY21 budget.  

The Corps construction account received $2.69 billion, an increase of $11.6 million above FY20’s funding level and $519.4 million above the FY21 administration’s request. The FY21 funding measure provides for nine new study starts and seven total new construction starts across the Corps’ civil works mission. For the first time since 2004, one of the new starts must be for inland waterways lock and dam modernization.  

Operations and maintenance received $3.85 billion, an increase of $59.7 million above FY20’s appropriated amount and $1.8 billion above the FY21 administration’s budget. Also of note is the rejection of any additional taxes or fees on commercial operators to supplement existing revenue streams. 

The legislation also requires the expenditure of all the money collected by the Harbor Maintenance Trust Fund to maintain and deepen the nation’s ports along with an additional $2 billion per year for harbor dredging projects from the trust fund’s $9 billion surplus. However, release of the surplus funds would be up to the appropriations committees.   

Direct Economic Relief ($286 billion) 

Of greatest interest to most Americans will be the stimulus checks. The final deal authorizes $600 in direct payments to individuals who made less than $75,000 in 2019. Essentially, if you received a check in the spring or summer, you should receive another check for half as much. 

Because the Internal Revenue Service had practice sending the rebates earlier this year, some Americans could see that money directly deposited into their bank accounts as soon as next week. Most payments, however, will likely take longer.  

The payments will go to every adult and child, meaning a family of four would receive $2,400 from the federal government — if the married couple’s collective income is less than $150,000. But immigrants who are not lawful permanent residents and adult dependents will not receive payments.  

Other major provisions of interest are the changes to unemployment benefits. Instead of expiring next week, federal benefits for gig workers and the long-term jobless will continue until March 14—an additional 11 weeks. Unemployed Americans are eligible for an additional $300 per week in jobless benefits during that time, on top of what they receive from the state or federal program paying their claim. Democrats also won an additional 11 weeks of jobless pay for workers who have now been unemployed for so long they have exhausted the state and federal benefits currently available. 

Republicans insisted that the bill cost less than $1 trillion, an arbitrary constraint that explains why the direct payments are $600 instead of $1,200 like last time.  

Business ($325 billion)   

The biggest costs of the bill are the small business sections. In some cases, “small business” is defined as fewer than 500 employees. The GOP-favored Paycheck Protection Program gets $284 billion for forgivable loans to businesses. In total, business provisions account for $325 billion — once the $20 billion in Economic Injury Disaster Loans, $15 billion for live entertainment venues and movie theaters, and several billion for other Small Business Administration programs are included in the total. 

Vaccine, Testing, Health Care Providers ($69 Billion) 

Nearly $70 billion will go to fighting the coronavirus. There is $22 billion for testing and tracing, $20 billion for vaccine procurement, and $9 billion for vaccine distribution.  

Schools ($82 Billion) 

Schools are another big winners in the relief plan, with K-12 schools, colleges and universities securing $82 billion. More than $54 billion of that will go to public schools, and more than $20 billion will go to public and private colleges. 

Rental Assistance ($25 Billion) 

The legislation provides money for a first-ever federal rental assistance program; funds to be distributed by state and local governments to help people who have fallen behind on their rent and may be facing eviction. 

Food / Farm Aid ($26 Billion) 

The legislation increases food stamp benefits by 15% and provides funding to food banks, Meals on Wheels and other food aid. It also provides an equal amount ($13 billion) in aid to farmers and ranchers. 

Child Care ($10 Billion) 

Provides $10 billion to the Child Care Development Block Grant to help families with childcare costs and help providers cover increased operating costs. 

Postal Service ($10 Billion) 

Forgives a $10 billion loan to the Postal Service provided in earlier relief legislation. 

Tax "Extenders" 

Extends a variety of expiring tax breaks. Renewable energy sources would see tax breaks extended, as would people making charitable contributions. Business meals would be 100% deductible through 2022. 

After months of stalemate, the key to reaching a deal was what was left out — most notably liability protection for business and funding for states and cities.  

Democrats wanted aid for those governments that have seen their revenue dramatically fall because of the pandemic, but Republicans negotiated a compromise in which Democrats would leave out $160 billion in state and local aid in exchange for Republicans dropping their so-called liability shield. 

The liability shield would have protected businesses from lawsuits related to coronavirus exposure, but the language Senate Majority Leader Mitch McConnell (R-KY) pushed for would have also affected unrelated medical malpractice suits and superseded bedrock labor laws that protect workers from wage theft and discrimination.  

Ultimately, Democrats agreed to hold back on state and local funding so that Republicans would drop the liability provisions, though Democrats and progressives are already calling for renewed negotiations over state funding once President-elect Joe Biden takes office. 

Democrats did manage to extend the deadline by a full year for states and cities to use the funding Congress granted to them in previous Cares Act aid. Funding for state and local governments was set to expire by the end of the year and would have had to have been returned to the federal government if left unspent.  

The House adjourned until Christmas Eve when it will meet in pro forma session. The House will meet again Monday, December 28, if necessary, should President Trump veto the Defense Authorization Act, which passed both the House and Senate by an overwhelming, veto-proof margin. Trump has threatened to veto the bill because it would require the renaming of the 10 Army Bases currently named for Confederate officers. Whether he will follow through is unclear. During his four years as president, Trump has never lost a veto fight.   

The new 117th Congress will be sworn in on Sunday, January 3 as required by the Constitution.