Slate - thoughts on this? "Democrats Are Waltzing Toward an Easily Avoidable Political Disaster..."
Democrats Are Waltzing Toward an Easily Avoidable Political Disaster With Their COVID Bill"
BY JORDAN WEISSMANN
FEB 22, 20214:44 PM
At the moment, Democrats in Washington appear to be in danger of sleepwalking their way toward a major policy and public relations debacle. The problem? With tax season underway, millions of Americans who lost their jobs thanks to the coronavirus crisis might soon discover that they unexpectedly owe thousands of dollars to the IRS. Lawmakers could prevent this wave of surprise tax bills by adding a fix to the $1.9 trillion coronavirus relief package that’s currently moving through Congress. But so far, efforts to do so seem to be stalling out. A senior Democratic aide told me that, as of now, he thought the chances legislators would act were “slim to none,” and described the failure as “political malpractice.”
While unemployment benefits have long been considered taxable income, recipients are often unaware of that fact until it’s time to file. Under normal circumstances, this is not necessarily a disaster, since people tend to stay on unemployment for relatively short stints of time. But the past year has been different. A historic number of households fell back on unemployment insurance to survive the pandemic, and some have collected well over $10,000 or even $20,000 in aid thanks to the enhanced benefits Congress enacted.
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Again, some Democrats are trying to head off this issue before it potentially explodes by including a fix in the $1.9 trillion COVID relief bill currently making its way through Congress. Senate Majority Whip Dick Durbin and Iowa Rep. Cindy Axne, for instance, introduced legislation that would forgive taxes on up to $10,200 in unemployment benefits. But the House Ways and Means Committee chose not to include the provision. And it’s unclear, at best, whether the idea will make it into the Senate version. “While there is support for tax forgiveness, there are many priorities members are fighting for,” another Democratic aide told me. “Conversations are ongoing.”
Why wouldn’t Democrats just fix this? Part of the answer has to do with the arcane rules governing budget reconciliation, the procedure Democrats are using to skirt the filibuster and pass their COVID bill with just 50 votes in the Senate. Under the process, each committee is assigned a section of the legislation, along with a ceiling on what they are allowed to spend. If the Senate wanted to add a UI tax fix, the chamber’s Finance Committee would have to cut something else from its section of the bill, since the issue would fall under its jurisdiction. And finding things to cut is tricky.
snip - read the rest.
(This is new to me...seems like something that should be addressed. Joe is off to a great start - this is a super important bill - hoping it is as good as it can be).
= new reply since forum marked as read
