To: Members of the House Financial Services Committee
From: National Taxpayers Union
Date: February 10, 2021
Subject: Taxpayer considerations and amendment proposals for the Committee’s reconciliation bill
Introduction and Key Taxpayer Considerations for the Reconciliation Bill
National Taxpayers Union (NTU) is the nation’s oldest taxpayer advocacy organization. As the House Financial Services Committee marks up its reconciliation bill, NTU believes this bill contains provisions that would deeply impact taxpayers and the federal budget. While we have supported previous bipartisan efforts to provide economic relief to the American people, including the COVID-19 Emergency Relief Act of 2020, we are concerned that current stimulus efforts aren’t targeted, potentially wasteful, and in some cases unnecessary. We wish to share some of our topline considerations for taxpayers regarding this bill. They are:
Another round of significant funding for one specific industry;
Billions of dollars in duplicative spending;
Rental assistance that is not targeted enough; and
A potential slush fund for homeowners.
Additionally, this legislation totals a $50 billion topline cost that appears to have no significant offsets; this is deeply concerning given the nation’s current deficit and debt situations and given the trillions of dollars already appropriated to combatting the public health and economic impacts of COVID-19;
Notwithstanding the concerns outlined above, there are provisions in this legislation worth supporting, either on their own or with modifications. They are: enhanced funding for Personal Protective Equipment, and means testing for rental assistance and homeowners assistance to keep people sheltered during this public health emergency.
Amendments That Could Improve the Committee’s Reconciliation Bill
Though we believe that several proposals in this reconciliation bill should not be advanced by the Committee under any circumstances, we hope to offer constructive amendment ideas that would, on net, improve the bill. They are:
Subtitle A - Defense Production Act of 1950
Recommended Changes
Reduce or eliminate $10 billion in DPA spending. In our view, it makes little practical sense to invoke the Defense Production Act in order to produce COVID-19 vaccines at this time. As it stands, most pharmaceutical companies which have FDA approval for COVID-19 vaccines are working at maximum capacity to ensure it is available en masse to the public. As more vaccines become approved and efficiencies increase, most Americans will be able to get their shot even before this provision increases production. Additionally, the federal government has already spent billions of dollars for the development and infrastructure to administer vaccines. Furthermore, budget reconciliation bills considered by other committees allocate tens of billions more to deliver a shot into the arm of every American - making this provision unneeded and wasteful. Making the funds under this subtitle available until 2025 is also unadvisable.
Subtitle B - Housing Provisions
This section appropriates more than $19 billion to assist renters and homeowners. While we understand the need to help many Americans, the current legislation does an inadequate job of targeting funds to those most in need and provides for assistance beyond the expected duration of the pandemic.
Recommended changes
Page 11, Line 2: Change “15 percent” to “10 percent.” This section prohibits more than fifteen percent of funds from being spent on administrative expenses. By adjusting this cap downwards to ten percent, it would match the language contained in the bipartisan December 2020 COVID relief legislation.
Page 14, Line 23 - Page 15, Line 19: Include language that prioritizes households that earn up to 50 percent of the median area income for the provision of assistance related to rent and utilities.
Page 14, Line 23 - Page 15, Line 19: Include language that requires documentation of financial hardship to ensure funds go to those most in need.
Page 16, Line 16-17: Change the date from September 30th, 2030 to September 30th, 2022 to ensure these funds go to those who are actually impacted by the pandemic.
Repeal Section 4205. This section has little to do with providing relief to those struggling with the economic downturn.
Page 32, Line 25: Change the date from September 30th, 2025 to September 30th 2022 to ensure these funds go to those who are actually impacted by the pandemic.
Page 37, Line 6, change “60 percent” to “100 percent” to restrict eligibility to only those homeowners who are at or below median income levels
Subtitle D - Airlines
Recommended changes
Repeal 1 Subtitle D: Since the CARES Act was signed into law, the federal government has provided $65 billion in payments to the American airline industry ($25 billion in loans and $25 billion in grants contained in the CARES Act, and $15 billion in the December 2020 relief bill). While the airline industry has been impacted more than other industries, there are better options for taxpayers than more direct aid to one part of the travel sector versus others. Instead of another $15 billion, Congress should extend the suspension of aviation fuel, and passenger ticket taxes through the end of the current fiscal year to boost airline profits and encourage passengers to fly.
NTU’s Thinking on the Combined Reconciliation Package
As the authorizing committees in Congress work on separate reconciliation bills, NTU wishes to inform Members and their staff that we have several significant concerns with the current framework of the overall, combined reconciliation effort. This proposed legislation would add $1.9 trillion the national debt without meaningful offsets and includes several major initiatives that do not adhere to the narrow, targeted approach NTU has advocated for since the summer. Additional proposals may do active harm to the country’s economic recovery efforts in the years ahead.
If the combined reconciliation bill came to the House or Senate floor today without significant improvements, we would advise Members to vote “NO” on the legislation. The bill would be heavily weighted in NTU’s annual rating of Congress.
Contact Information
Should you have any questions about the recommendations in this memo, please do not hesitate to reach out to Thomas Aiello and Thomas.Aiello@ntu.org