House Approval of Tax Legislation and Senate Challenges Ahead

On Wednesday evening the House of Representatives overwhelmingly passed favorable tax legislation (H.R. 7024) which retroactively extends key tax benefits important to ABMA members. The vote was 357-70, with 188 Democrats and 169 Republicans voting in favor. Heading into the vote, leadership in the House was hoping for broad bipartisan support to generate momentum in the upper chamber and that objective was achieved. One concession that was made by House leadership was allowing legislation to modify the $10,000 cap on the state and local tax (SALT) deduction to have a vote on the House floor next week. Several New York State moderate Republicans made SALT relief a high priority and threatened to kill the bill procedurally if they were not allowed a vote on a standalone SALT bill.

As we have noted, the sledding becomes more difficult in the Senate. Senate Republicans, including the Ranking Member of the Senate Finance Committee—Mike Crapo (R-ID)—want the bill to go through “regular order” and be marked up in the Finance Committee (instead of proceeding straight to the Senate floor) so that Members may offer amendments. There is GOP angst in the upper chamber around the Child Tax Credit and the “pay for”—Congressional parlance for existing funds that may be reprogrammed to offset the budget impact. Regarding the latter, the bill is “paid for” by ending new filings for funds under the Employee Retention Tax Credit, which was stood up during the pandemic to help employers and employees. The program has also served as a platform for fraud, with hordes of phone solicitors encouraging small businesses to apply for funds. The bill attempts to crack down on this fraud. Republicans are also concerned about changes to the Child Tax Credit that may relax work requirements.

The bottom line is that more work clearly needs to be done and ABMA will be working our Senate champions hard in the coming weeks. On Wednesday, we met with Senators Ron Johnson (R-WI) and Thom Tillis (R-NC)—both of whom sit on the Finance Committee—to express our support and urge expeditious action. Senator Tillis believes that the ERTC pay for is artificial and more of an accounting gimmick. He would like to have an opportunity to offer amendments if a markup is scheduled. We also met with Senator J.D. Vance (R-OH) who admitted that there are challenges in the Senate, but he was sanguine about the bill’s prospects and told us that the Senate would pass a bill.

In terms of timing, the Senate is in session this week, but then recesses for the next two weeks. This means that action on a bill will not happen until early March. As always, we will keep you apprised of developments.

Career and Technical Education (CTE)

On February 1, co-chairs of the Congressional Career and Technical Education Caucus (Representatives GT Thompson (R-PA) and Suzanne Bonamici (D-OR) introduced a resolution designating February as National CTE Month. The press release may be found here. The House Education and Workforce Committee held a hearing last month where witnesses lamented the fact that our society, in general, continues to embrace a “four-year college for all” mentality while employers are starved for workers with mechanical skills. This resolution is just another way of highlighting the CTE education track as a pathway toward good-paying, rewarding jobs.

Farm Bill Reauthorization: Enhancing Workforce Development Provisions

ABMA is hearing that provisions to address workforce issues may be folded into Farm Bill reauthorization legislation that is now taking shape. We understand that House Agriculture Committee Chairman Rep. GT Thompson (R-PA) intends to modify the existing Rural Innovation Stronger Economy (RISE) grant program to make its workforce development provisions more meaningful. RISE grant funds currently can be used to:

• Build or support a business incubator facility
• Provide worker training to assist in the creation of new jobs
• Train the existing workforce with skills for higher-paying jobs, and
• Develop a base of skilled workers and improve their opportunities to obtain high-wage jobs in new or existing local industries.

We do not have specifics yet on what modifications are being contemplated, but we will be reaching out to committee staff to better understand the Chairman’s intentions.