NAICU Washington Update

Standoff on COVID Relief Continues as Congress Returns

September 11, 2020

September is usually a frantically busy time for Congress, especially in an election year, when the clock is ticking to finalize government funding before the fiscal year ends on September 30, and wrap up pending legislation before going home to campaign. This year, however, is different because of the continuing standoff over additional supplemental funding relief to address the coronavirus pandemic.
The failed attempt to negotiate a relief deal in August left House Democrats holding their ground on a $2.2 trillion total for the next spending package, Senate Republicans holding their ground on a much smaller proposal, and the White House threatening executive action if Congress cannot come to an agreement.
There was hope that the inevitable need for an appropriations deal on FY 2021 funding or a continuing resolution (CR) to keep the government open would break the standoff on COVID relief funding and provide a vehicle for passage. But that possibility has faded with reports of Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin informally agreeing to a “clean CR.” This means legislation to avoid a government shutdown has a high chance of passing, without extraneous provisions, and separate from negotiations on pandemic relief.
Another attempt to move negotiations on pandemic relief failed this week, as Senate Majority Leader Mitch McConnell (R-KY) brought up yet another version of a relief bill for a cloture vote. This procedural vote to continue consideration of a “skinnier” relief bill failed (52-47) to garner the 60 votes needed. Republicans saw this bill as a vehicle to bring their priorities to the table for bipartisan negotiations, while Democrats saw the bill as woefully inadequate to address the economic and societal needs of the pandemic.
Despite the politics, the details of the Senate Republican bill are important. While pared down to $500 billion, the Republican bill maintains the $105 billion for education, of which $29 billion is for higher education. The bill also includes limited liability protection for colleges and universities, along with businesses.  Both provisions are important to private, nonprofit colleges and universities.
In addition, while the CARES Act created a new above-the-line deduction for charitable contributions of $300 for 2020, the Senate GOP bill would increase that deduction to $600 for individuals and $1,200 for joint returns.  The bill would also allow students at public and private K-12 schools access to 529 savings plan funds to cover items such as books and online materials not provided by the school.  Parents who homeschool their children would also be able access to 529 funds under the GOP proposal.  The provision would only be in effect for two years.
With seven weeks until the general election, and little time scheduled for Congress to be in session, it is increasingly uncertain if a package for additional coronavirus relief can be accomplished before November 3.

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