Lawmakers in Washington are working toward an agreement to provide additional COVID-19 relief, but the package will likely be limited in scope and will not include any of the tax priorities recently under consideration.
The deal would provide an extra $300 billion in funding for Paycheck Protection Program (PPP) plus $60 billion for the Economic Injury Disaster Loan program. Leaders in Congress are also negotiating over increased funding for hospitals and COVID-19 testing.
The PPP was as part of the $2 trillion COVID-19 stimulus and relief bill enacted in late March and provides small businesses with loans that are eligible for forgiveness if they retain their employees. Congress initially allocated $349 billion for the program, but all of that has been disbursed through roughly a million loans since the program began accepting applications on April 3.
The urgency to prevent a lapse in funding has resulted in a number of more expansive, and potentially contentious tax proposals under consideration being shelved for the time being. House Democrats have been discussing priorities that include retroactively rolling back the $10,000 cap on the state and local tax deduction and expanding the recently enacted sick pay and paid family leave requirements to larger employers but will likely receive pushback. President Donald Trump has also floated cutting payroll taxes and removing the 50% cap on deducting meals and entertainment as a way to help the restaurant industry.
Congress is expected to move quickly on the funding bill, but the timing of additional legislation is uncertain. The House was set to return from its three-week recess on April 20 but has since pushed that back to May 4. Absent a remote-voting arrangement, Congress can only pass legislation without reconvening in-person by unanimous consent, which limits the scope of any bill significantly.
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