Throughout 2020, news sources have speculated on what could happen if the election results in shifts within Congress or the Whitehouse. Those predictions depend on many factors and are difficult to truly prepare for. Instead, we’ve been closely monitoring the types of legislation that are likely to pass no matter who’s in office: bipartisan pieces that address urgent national needs.
Below, we dive into four pieces of legislation that are likely to pass in early 2021, regardless of election outcomes.
1. A new COVID-19 relief package
Politicians have taken heat from the American people for not passing a new COVID-19 relief package before the election. Republicans and Democrats differ significantly in the amount of relief a stimulus package would provide, but both parties understand there is a strong need for additional relief in the face of the continuing pandemic. While it’s unclear whether Congress will reach an agreement before January, it’s almost certain a stimulus package will be passed, especially if the economy maintains its current state.
2. Infrastructure legislation
Infrastructure is another area with clear bipartisan support but differing approaches.
It’s tricky to predict what would be included in an infrastructure bill, since Republicans tend to define infrastructure more narrowly as it relates to transportation (e.g., highways, airports, etc.), while Democrats tend to define infrastructure more broadly to also include childcare, schools, housing, broadband and green initiatives.
Yet both parties know the value of infrastructure spending, due to how it can stimulate the economy by creating jobs and incentivizing investment in economic development. These benefits make it extremely likely we will see infrastructure legislation passed in early 2021.
3. Tax proposals
Under the tax umbrella, we could see three key pieces of legislation.
The first is the expansion of the Employee Retention Credit, which the IRS defines as a tax credit that eligible employers can take against certain employment taxes equal to 50% of qualified wages paid to employees after March 12, 2020, and before January 1, 2021. There is strong pressure to keep Americans employed during the continuing pandemic, making an expansion of this tax credit likely.
If the economy stays in its current state or declines, we will probably also see another round of funding for the Paycheck Protection Program (PPP). After initial funds ran out, Congress passed the Paycheck Protection Program and Health Care Enhancement Act, approving $310 billion in additional funding for the program. PPP loans — which are forgivable if all requirements are met and which require at least 60% of the loan to be spent on payroll — provide strong incentive for employers to keep their employees. PPP loans have helped lighten the burden on social programs like welfare and unemployment, so further funding seems likely.
That said, we’ll also probably see an increase in unemployment benefits. The end of the $600 a week in federal unemployment (which was collected on top of state unemployment) in July has negatively impacted the 23 million Americans who continue to face unemployment as the pandemic stretches on, increasing the call for more unemployment benefits. The amount of the increase may differ depending on who drives the legislation, but increasing unemployment benefits has bipartisan support.
4. Incentivizing domestic manufacturing and research
Incentivizing businesses to conduct research and manufacturing domestically has been called a priority by both parties, making it likely we’ll see new or increased tax credits next year.
The COVID-19 pandemic has highlighted gaps in U.S. domestic production capabilities (especially when it comes to manufacturing medical supplies like ventilators, masks and COVID-19 testing kits). Both parties want manufacturers to bring more production and innovation efforts back to the U.S., and there are different ways to incentivize this, including increased tax credits and ensuring there is some sort of downside for businesses who choose not to bring production back to the U.S.
Staying up to date on COVID-19 relief, tax credits, infrastructure bill and more
As legislation develops over the coming months and into 2021, we will keep you informed and updated — including on how legislation could impact you and your business, and what actions you can take. Continue reading on in our related articles below: