Armanino Blog

House Passes HEROES Act, Steep Challenges Expected in Senate

May 17, 2020

On May 15 the House passed, with some Democratic dissent, the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.

The HEROES Act returns certain elements taken away by the 2017 Tax Cuts and Jobs Act (TCJA) and adjusts for elements within the CARES Act. Highlights include $1 trillion in state and local funding, direct payments, unemployment insurance, money for COVID-19 testing, and tax, health and retirement provisions. Republicans are largely opposed, and the bill faces a steep challenge in the Senate.

House Speaker Nancy Pelosi (D-CA) believes that the HEROES Act is a starting point for bipartisan negotiations. Senate Majority Leader Mitch McConnell (R-KY) has stated that another bill is likely necessary but said the HEROES Act in its current form is "dead on arrival."

Many Republicans say that they do not see the immediate need for another bill, as the impact of the first few bills is not yet known. House Democrats say the bill is needed now because of the immense impact of the COVID-19 crisis, with more than 36 million unemployed Americans seeking relief. With partisanship at an all-time high and election season quickly approaching, skeptics are playing dice as to the outcome.

Speaker Pelosi described the HEROES Act as addressing three main concerns:

  • Open the economy with testing, tracing, treatment and isolation that health experts call for, plus assistance to hospitals.
  • Provide benefits for health care workers, first responders, police, fire, emergency services, sanitation, food workers, teachers and transportation workers.
  • Put money in the pockets of the American people with direct payments to families, unemployment insurance, the child tax credit, the earned income tax credit and the employment retention tax credit.

Summary of the HEROES Act

Highlights of the bill include:

  • Provides FY2020 emergency supplemental appropriations to federal agencies
  • Allows for payments and other assistance to state, local, tribal and territorial governments
  • Adds additional direct payments of up to $1,200 per individual
  • Eliminates for 2020 and 2021 the state and local tax deduction limitation, previously capped at $10,000
  • Expands the earned income tax credit and the child tax credit
  • Increases several "above the line" deductions for certain qualified employees
  • Expands paid sick days, family and medical leave, unemployment compensation, nutrition and food assistance programs, housing assistance, and payments to farmers
  • Modifies and expands the Paycheck Protection Program, which provides loans and grants to small businesses and nonprofit organizations
  • Establishes a fund to award grants for employers to provide pandemic premium pay for essential workers
  • Expands several tax credits and deductions
  • Provides funding and establishes requirements for COVID-19 testing and contact tracing
  • Eliminates cost-sharing for COVID-19 treatments
  • Extends and expands the moratorium on certain evictions and foreclosures
  • Requires employers to develop and implement infectious disease exposure control plans

The HEROES Act also modifies or expands a wide range of other programs and policies, including those regarding Medicare and Medicaid, health insurance, broadband service, medical product supplies, immigration, student loans and financial aid, the federal workforce, prisons, veterans benefits, consumer protection requirements, the U.S. Postal Service, federal elections, aviation and railroad workers, and pension and retirement plans.

President Trump, meanwhile, doesn't support the current HEROES Act and has stood by his earlier statements of middle-class tax relief, fewer regulations and a pro-growth plan. The White House released a statement saying the House "is more concerned with delivering on longstanding partisan and ideological wish lists than with enhancing the ability of our Nation to deal with the public health and economic challenges we face.

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