4 overlooked elements of the latest COVID stimulus package

A minimum wage increase isn’t the only element of the COVID-19 relief bill that arguably doesn’t belong there.

Senate parliamentarian Elizabeth MacDonough ruled Thursday that including the wage increase in the bill would violate Senate rules on legislation for budget reconciliation. The House version of the bill still includes the increase, which the Senate will presumably remove. While the senators are at it, they may want to consider excising a few other provisions of the bill that aren’t getting much publicity and that the nonpartisan Committee for a Responsible Federal Budget says “were all developed long before the COVID crisis and not in response to it.” The CRFB says they’re “unrelated to the COVID pandemic and economic crisis” and don’t belong in the bill.

That doesn’t mean these stealth provisions would necessarily be bad law. Most have been under consideration for years, and some have bipartisan support. But as part of the relief bill, they wouldn’t receive the full substantive debate they deserve, and they would escape Congress’s normal pay-as-you-go rules, which require that costs be offset by new revenue increases or spending cuts.

Questionable elements of the relief bill the House will likely send to the Senate:

Changing the way U.S. multinational companies allocate their interest costs. Huh? Understanding this one requires a full-semester course in corporate finance and tax policy, and it has been under consideration for 17 years. Suffice to say, it’s irrelevant to COVID-19.

Bailing out multi-employer pension plans. These plans cover workers who all belong to one labor union and work for multiple employers. Scores of such plans are headed toward insolvency in coming decades, a slow-motion crisis that has been building for years. The problem definitely merits congressional attention, but it has nothing to do with COVID.

Expanding the Child Tax Credit, the Child Care Tax Credit, and the Earned Income Tax Credit. Some of these changes would extend for a year only, so at least this provision is partially pandemic-targeted. But altering important antipoverty programs deserves Congress’s full attention, especially since some Republicans, led by Sen. Mitt Romney of Utah, agree that payments to low-income families should be increased substantially. Considering this group of programs on its own is an opportunity for highly significant long-term bipartisan action on a major issue.

Increasing Affordable Care Act subsidies. This provision would extend for just two years, so it’s pandemic-relevant, but in this case that’s a problem. The change would eliminate a “subsidy cliff” that suddenly doubles insurance premiums for some people when their incomes cross a threshold (four times the poverty level). The cliff has long needed fixing, but the fix ought to be permanent; people want to know whether they can count on this major change or if they need to brace for a return of the cliff.

The CRFB estimates that removing these elements from the relief bill would reduce its cost by more than $200 billion, around 11% of its projected $1.9 trillion cost. Recent research suggests the current bill may provide much more relief than needed. The CRFB concludes that removing these “unrelated policies” from the bill would help to “dramatically improve the composition of the package and ensure sufficient COVID relief.”

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