CBO Says Bill Would Trigger Spending Cuts: Stimulus Update
(Bloomberg) -- The Congressional Budget Office said the $1.9 trillion stimulus package would trigger automatic spending cuts on Medicare and other programs unless Congress acts to head off the reductions, as it’s done before.
Legislators are separately awaiting a ruling by the Senate parliamentarian on a key component of the bill -- President Joe Biden’s proposed hike in the minimum wage to $15 an hour. House Speaker Nancy Pelosi said a decision on whether the measure qualifies for inclusion in the budget procedure that Democrats are using could come at any time.
The House Rules Committee plans to complete the chamber’s work on the Covid-19 aid legislation on Friday, clearing the way for a floor vote as soon as that same day. Focus then shifts to the Senate, with congressional leaders pledging to send the bill to the White House by March 14.
CBO Says Stimulus Would Trigger Automatic Spending Cuts
The Congressional Budget Office said the $1.9 trillion stimulus package would trigger automatic spending cuts on Medicare and other programs in the next fiscal year unless Congress acts to head off the reductions, as it’s done before including for the 2017 tax-cut law.
The Pay-As-You-Go Act, which passed in 2010 with Democratic votes and is known as “paygo” for short, would require a $36 billion cut to Medicare next year -- and tens of billions from assorted other accounts, the nonpartisan agency said Thursday in a letter to House Republican Leader Kevin McCarthy.
Democrats have several other opportunities later this year to try to head off the cuts, however, but doing so will require 60 votes unless Democrats can find a workaround. -- Steven Dennis
Democrats Aim to Make Expanded Child Tax Credit Permanent (2:10 p.m.)
Senate Democrats will begin efforts to make the expanded child credit included in Biden’s Covid-19 relief plan permanent after Congress enacts the aid bill in coming weeks.
“As soon as we pass the Recovery Act, we will fight to make it permanent,” Senator Sherrod Brown, an Ohio Democrat, said of the enlarged tax credit. The Biden administration has been “beyond cooperative” on working to strengthen the credit, he said.
The stimulus bill would greatly expand the child tax credit, which is currently $2,000 per child. Parents of children five and under would get $3,600 a year and those with children age six to 17 would get $3,000 under the legislation. The payments would also be sent monthly, so that families could use the money to cover expenses throughout the year.
Senator Michael Bennet, a Colorado Democrat, said he is “confident” that Congress will approve a permanent version of the expanded child tax credit.
It’s unclear how or when such a bill would pass. Some Republicans, including Senator Mitt Romney of Utah and Marco Rubio of Florida, support bolstering tax incentives for children, though it’s not clear that at least 10 GOP members would join with Democrats on a bill.
A one-year expansion would cost more than $109.5 billion, according to an estimate from the non-partisan Joint Committee on Taxation. A permanent expanded child tax credit could cost many multiples of that.
Schumer Says Jobless Claims Show Need for Relief Bill (11:11 a.m.)
Senate Majority Leader Chuck Schumer said Thursday’s jobless-claims data, which showed 730,000 Americans filed for unemployment insurance in the latest week, illustrate the need for Biden’s Covid-19 relief plan. While the figure was down more than expected from the previous week, Schumer highlighted that it remains above the worst reading during the 2007-09 recession.
“We cannot take our foot off the gas,” Schumer said on the Senate floor Thursday. “The American people should expect nothing less.”
Democrats want to work with Republicans, and included Senate amendments that had bipartisan vote during the debate over the budget-resolution that enabled going ahead with the the relief legislation, Schumer said. “But at the end of the day, we cannot let obstructionism stop us,” he said in committing to go ahead with the bill without GOP votes.
“The Senate will soon take action on our plan to solve this crisis,” one with strong public backing, he said.
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