Despite the lack of a comprehensive infrastructure bill, the House and Senate have continued to be active in holding hearings addressing the future of Amtrak and commuter rails, transportation network companies, technology strategies to address congestion, aviation safety and how to rebuild infrastructure in America. With 2020 being an election year, most are pessimistic about any legislation moving through Congress. However, the NETT Council within DOT continues to become more active, releasing a request for comments on shaping the regulatory framework for transportation innovations such as the hyperloop. Comments are due January 10, 2020. Also, the NETT Council received $2 million in the omnibus under the THUD section (Transportation and Housing and Urban Development Departments). The total funding was $86.2 billion for the THUD programs and services. This is up from $71.1 billion in FY2019 and $75.8 billion in the House FY2020 version and $74.3 billion in the Senate FY2020 version of the bill.
The Department of Agriculture is considering eliminating the Supplemental Nutrition Assistance Program (SNAP) benefits for 3.1 million people. Ohio Democrats Marcia Fudge, Tim Ryan and Sherrod Brown were vocally opposing this proposed change this week. They and many Democrats argue this rule change would kick seniors, children, working families and the disabled off SNAP and ignores the stated will of Congress because similar proposals were rejected in congressional debates over the 2014 and 2018 farm bills.
The Senate confirmed Steve Dickson, a former Delta Air Lines executive, to lead the Federal Aviation Administration (FAA) on a 52-40 vote. A Senate committee earlier advanced Dickson’s nomination on party-line vote after Democrats cited concerns on the nominee’s failure to disclose involvement in a whistleblower lawsuit. The Senate will need to take up a legislative waiver later this week to allow both Dickson and acting administrator Dan Elwell to lead the agency together.
Democrats’ Tax Credit and Extender Package
House Democrats are advancing their first substantial tax package since taking control of the House. At a June 20 markup, the Ways and Means Committee approved bills to aid lower-income workers, repeal an unpopular provision in the 2017 tax overhaul, renew expired tax breaks, and provide relief to disaster victims.
The measures omit a corporate income tax rate increase Democrats have considered. The 2017 tax law (Public Law 115-97) set the rate at 21%. The package’s price tag tops $100 billion, but Ways and Means Chairman Richard Neal (D-MA) said he’s committed to finding more offsets.
Worker and Family Benefits
H.R. 3300 from Chairman Neal would expand the earned income, child, and child and dependent care tax credits, and direct payments for them to U.S. territories.
The measure would make several changes to the earned income tax credit. It would:
• Lower the minimum age to claim the credit for childless individuals to 19, instead of 25, and raise the limit to age 66, instead of 65. The maximum childless credit would be $1,464, instead of $529, according to a summary from House Ways and Means Committee Democrats. Changes would be in effect for 2019 and 2020.
• Allow individuals with children who don’t have the identification required by the credit, such as a valid Social Security number, to claim the childless credit.
• Treat individuals who are married but separated as unmarried when claiming the credit. Individuals couldn’t file joint returns and would have to meet other requirements.
• Modify the treatment of investment income when determining credit eligibility.
• Make payments to U.S. territories for a portion of the cost of their earned income tax credits.
The measure would make the full amount of the child tax credit —as much as $2,000 per child — refundable for 2019 and 2020. Currently as much as $1,400, indexed for inflation, is refundable, meaning it can be claimed on a return even if it exceeds tax liability. Refundability wouldn’t be based on the current formula that incorporates individuals’ earned income or Social Security tax payments. The credit income limit of $200,000 for individuals or $400,000 for joint filers would remain.
Retirement Savings Overhaul
Individuals would have more flexibility to save for retirement and unrelated businesses could offer joint retirement plans under H.R. 1994, the Setting Every Community Up for Retirement Enhancement Act. The measure, introduced by Chairman Richard Neal (D-MA) would allow individuals to temporarily withdraw money from their retirement accounts following a birth or adoption, and would modify contribution limits and mandatory minimum distribution requirements for older Americans. It would also allow 529 education savings accounts to be used for apprenticeship fees and student loans. Most provisions would apply to plan years beginning after Dec. 31, 2019. The rule for floor debate would automatically modify the bill with a manager’s amendment from House Ways and Means Chairman Richard Neal (D-MA).
Relative to the committee-approved bill, Neal’s amendment:
• Adds provisions to address an unintended effect of the 2017 tax overhaul (Public Law 115-97) that resulted in a tax increase on military survivor benefits and certain other income received by children.
• Removes provisions that would have allowed 529 education savings accounts to be used for homeschooling and more elementary and secondary school expenses.
• Increases penalties for failing to file retirement plan information.
Senator Sanders’ Plan toTax Stock, Bond and Derivatives Trades
Democratic presidential candidate BernieSanders (I-VT) plans to introduce legislation that would impose a tax ontrades of all stocks, bonds and derivatives in the U.S., a move he says wouldhelp curb Wall Street speculation and help finance his campaign promise toprovide tuition-free college and cut student debt. Sanders has been promoting afinancial transactions tax since his run for the Democratic nomination in 2016.The plan he’s offering would apply a 0.5% tax rate for stock trades, a 0.1%rate for bond trades, and 0.005% for derivatives transactions.