washington in 2021: democrats control white house ......white house & congress georgia elections...

1 Washington in 2021

Washington in 2021:Democrats ControlWhite House & CongressGeorgia elections cement Democratic control

7 January 2021

OverviewDemocrats Jon Ossoff and Raphael Warnock won theGeorgia runoff elections, giving Democrats control ofthe Senate beginning later this month. With the partiessplit 50-50 in the Senate, Vice President-elect KamalaHarris will break ties, allowing major priorities likestimulus, climate change, and health care, potentiallypaid for with tax increases, to be brought up andpassed in the House and Senate. The party ratio in thechamber was going to be narrow under either Georgiarunoff scenario, requiring bipartisan cooperation formuch to get done, but Senate control affordsDemocrats additional options like budget reconciliation.

With such a narrow margin, Democrats face the choicesof: 1) negotiating with Senate Republicans to achievethe 60-vote margin necessary to move most legislationthrough the Senate; 2) using the budget reconciliationprocess that allows certain legislation to pass with 51votes, rather than the 60-vote filibuster threshold; or3) changing rules regarding the filibuster. Regardlessof how legislation is processed, moderate senators likeJoe Manchin (D-WV) and Susan Collins (R-ME) will playa huge role in deal-making.

Democrats have potentially two opportunities toemploy budget reconciliation if instructions can beapproved in the FY2021 and FY2022 budgetresolutions — only one reconciliation bill is allowed foreach resolution. House Speaker Nancy Pelosi (D-CA)has said a first reconciliation bill will combine pandemicrelief with Affordable Care Act (ACA) improvements.

What priorities or combinations would be the target ofa second reconciliation bill is unclear. However, eachbill is limited in that it must not increase the deficitoutside the 10-year budget window. How much of anyof the first reconciliation bill would be paid for isunknown now, as is how President-elect Biden willproceed with his intention to raise the statutorycorporate income tax rate to pay for changes that canbenefit middle-income Americans on “day one” of hispresidency.

Year-end 2020 legislation (Pub. Law No. 116-260)omitted state and local funding and liabilityprotections, and included smaller direct payments andunemployment add-ons than some wanted. Bothparties expect additional virus-related legislation, andBiden has said “Congress will need to immediately getto work on support for our COVID-19 plan.”

Beyond full-chamber leadership, Democratic controlalso means chairmanships of committees, which willdetermine what bills and issues are considered. Thelast 50-50 split was after George W. Bush was electedpresident in 2000 and required Senate leaders tonegotiate an agreement on committee ratios andprocedures. A similar process is expected this time, butthe negotiations could take some time.

Must-pass legislation in 2021 will need to address:• The federal debt limit reinstated on August 1, 2021.• Expiration of government funding, and highway

authorization & funding on September 30, 2021.

Washington Council Ernst & Younghttps://www.ey.com/en_us/tax/washington-council-ernst-young

0 100 200 3000 20 40 60

Senate: 50 Democrats, 50 Republicans House: 222 Democrats, 211 Republicans, 2 open

* Two open seats attributable to an undecided race in New Yorkand the passing of Rep.-elect Rep. Luke Letlow (R-LA).

DR

DRO


Expected Senate leadership

Agriculture Democrats Republicans

Chairman Debbie Stabenow (D-MI) Ranking Member John Boozman (R-AR)

Expected Senate committee leaders include

Leadership Democrats Republicans

Majority Leader Chuck Schumer (D-NY) Minority Leader Mitch McConnell (R-KY)

Majority Whip Dick Durbin (D-IL) Minority Whip John Thune (R-SD)

Appropriations Democrats Republicans

Chairman Patrick Leahy (D-VT) Ranking Member Richard Shelby (R-AL)

Banking Democrats Republicans

Chairman Sherrod Brown (D-OH) Ranking Member Pat Toomey (R-PA)

Budget Democrats Republicans

Chairman Bernie Sanders (I-VT) Lindsey Graham (R-SC)

Commerce, Science& Transportation

Democrats Republicans

Chairman Maria Cantwell (D-WA) Ranking Member Roger Wicker (R-MS)

Energy & NaturalResources


Chairman Joe Manchin (D-WV) Ranking Member John Barrasso (R-WY)

Environment & PublicWorks


Chairman Thomas Carper (D-DE) Ranking Member Shelley Moore Capito(R-WV)

Finance Democrats Republicans

Chairman Ron Wyden (D-OR) Ranking Member Mike Crapo (R-ID)

Foreign Relations Democrats Republicans

Chairman Robert Menendez (D-NJ) Ranking Member Jim Risch (R-ID)

Health, Education, Labor& Pensions (HELP)


Chairman Patty Murray (D-WA) Ranking Member Richard Burr (R-NC)or Rand Paul (R-KY)

Judiciary Democrats Republicans

Chairman Dick Durbin (D-IL) Ranking Member Chuck Grassley (R-IA)

Small Business Democrats Republicans

Chairman Ben Cardin (D-MD) Ranking Member Rand Paul (R-KY)or Tim Scott (R-SC)

Homeland Security& Governmental Affairs


Chairman Gary Peters (D-MI) Ranking Member Rob Portman (R-OH)


House leadership

Agriculture Democrats Republicans

Chairman David Scott (D-GA) Ranking Member Glenn Thompson (R-PA)

House committee leaders include

Leadership Democrats Republicans

Speaker Nancy Pelosi (D-CA) Minority Leader Kevin McCarthy (R-CA)

Majority Leader Steny Hoyer (D-MD) Minority Whip Steve Scalise (R-LA)

Budget Democrats Republicans

Chairman John Yarmuth (D-KY) Ranking Member Jason Smith (R-MO)

Education & Labor Democrats Republicans

Chairman Bobby Scott (D-VA) Ranking Member Virginia Foxx (R-NC)

Energy & Commerce Democrats Republicans

Chairman Frank Pallone (D-NJ) Ranking Member Cathy McMorris Rodgers(R-WA)

Financial Services Democrats Republicans

Chairman Maxine Waters (D-CA) Ranking Member Patrick McHenry (R-NC)

Appropriations Democrats Republicans

Chairman Rosa DeLauro (D-CT) Ranking Member Kay Granger (R-TX)

Ways & Means Democrats Republicans

Chairman Richard Neal (D-MA) Ranking Member Kevin Brady (R-TX)

Judiciary Democrats Republicans

Chairman Jerry Nadler (D-NY) Ranking Member Jim Jordan (R-OH)

Natural Resources Democrats Republicans

Chairman Raul Grijalva (D-AZ) Ranking Member Bruce Westerman (R-AR)

Oversight & Reform Democrats Republicans

Chairman Carolyn Maloney (D-NY) Ranking Member James Comer (R-KY)

Rules Democrats Republicans

Chairman Jim McGovern (D-MA) Ranking Member Tom Cole (R-OK)

Homeland Security Democrats Republicans

Chairman Bennie Thompson (D-MS) Ranking Member John Katko (R-NY)

Joint EconomicCommittee


Chairman Don Beyer (D-VA) Ranking Member Sen. Mike Lee (R-UT)or Sen. Tom Cotton (R-AR)


Policy overviewDemocrats will have potentially two opportunities toemploy budget reconciliation next year if instructionscan be approved in the FY2021 and FY2022 budgetresolutions – only one reconciliation bill is allowed foreach resolution. What priorities or combinations will bethe target of reconciliation is unclear, as is how Bidenwill employ the suggested rule from his campaign thatshort-term stimulus will not require tax increases tooffset revenue. Beyond stimulus, the Biden/Democraticpolicy agenda has tax increases as a common thread:plans on health care, climate change, education,housing and other areas envision tax changes likerolling back parts of the Tax Cuts and Jobs Act (TCJA)and otherwise turning tax rate dials, and those hikescould be used to fit a bill within whatever revenueconstraints Democrats decide. The political calculus ofhow bills move, including through reconciliation or not,will involve assessing the difficulty of winning supportfrom some Republicans and not losing moderateSenate Democrats.

Reconciliation is generally easier to do when raisingtaxes than cutting taxes since reconciliation originallywas designed as a deficit reduction measure, and thereis no worry about 10-year sunsets or fitting thecontents of the bill within a revenue constraint. If abudget agreed to by the House and Senate has“instructions” to provide for items like infrastructureinvestment or health care changes, and spendingtargets to the appropriate committees of jurisdiction,items being discussed by Biden would likely be able tobe considered under the procedurally advantageousreconciliation process. Two major limits on areconciliation bill are that the policy provision musthave a budget impact or be material to the spending ortax provisions and that it does not increase the deficitbeyond the budget window.

If a determination is made that major Democraticpriorities like climate change seem likely to bump upagainst reconciliation rules and are more conducive tobeing enacted outside of the reconciliation process,that likely will require filibuster repeal. Democrats aresplit on this issue but former President Obama andformer Senate Democratic leader Harry Reid, who bothsaw their ability to move policy changes hobbled by thefilibuster, are among significant Democratic forcespushing for the change. Democrats might need toutilize both options through budget and filibusterchanges to pursue their broad agenda.

Use of budget reconciliation requires two steps:– Both the House and Senate must pass the same

concurrent Budget Resolution (requiring only a simple

majority in the Senate) that contains reconciliationinstructions to committees of jurisdiction to changethe spending or revenue numbers;

– Reconciliation bills that adhere to the reconciliationinstructions from the budget resolution would then,like other legislation, be passed by both chambers ofCongress and signed into law by the President.

While only a simple majority is required for passage inthe Senate, 60 votes are required to waive a point oforder against potential violations of the so-called “Byrdrule,” which among other things prohibits the inclusionof provisions that increase the budget deficit for theperiod outside the budget window. There are six testsfor matters to be considered extraneous:

It is the Byrd Rule prohibition against provisions thathave no revenue effect that could trip up stimuluslegislation or high-profile Democratic priorities likeclimate change. During the ACA repeal debate, non-revenue aspects like eliminating essential healthbenefits and permitting insurers to sell policies acrossstate lines were found to violate the rule. During theTCJA, the budget impact of a policy to expand 529savings accounts to home-school expenses waschallenged by Democrats and found to be incidental tothe non-budgetary policy around education.

In the climate change context, reconciliation is seen aslikely precluding performance standards like those onfuel economy or building standards. However, many ofthe goals of climate change policy could be, with somecreativity, designed with a revenue impact. ManyHEROES Act provisions have a revenue impact.

Byrd rule deems extraneous proposals that:– Do not produce a change in outlays or revenues;– Produce changes in outlays or revenue that are

merely incidental to the non-budgetary componentsof the provision;

– Are outside the jurisdiction of the committee thatsubmitted the title or provision for inclusion in thereconciliation measure;

– Increase outlays or decrease revenue if theprovision’s title, as a whole, fails to achieve thereporting committee’s reconciliation instructions;

– Increase net outlays or decrease revenue during afiscal year after the years covered by thereconciliation bill unless the provision’s title, as awhole, remains budget neutral; or

– Contain recommendations regarding Social Security.


TaxPresident-elect Biden’s proposed tax increases areintended to be enacted as revenue sources for majorpriorities like climate change, health care, educationand housing. A first bill sought by Biden andcongressional Democrats is likely to be pandemic reliefand health care changes. How much of that bill will bepaid for is unknown now, as is how Biden will proceedwith his intention to raise the statutory corporateincome tax rate to pay for changes that can benefitmiddle-income Americans on “day one” of hispresidency. “If you raise the corporate taxes back to28%, which is a fair tax, you’d raise [$1.3 trillion] bythat one act…“ he said Oct. 15. Some Biden advisorsand congressional Democrats have indicated the typesof tax increases supported by Biden during the campaignwould not be included as part of initial stimuluslegislation, but instead would be used to offset the costof changes in permanent policies. That could meansuch tax increases might not take effect on January 1,2021, but could be delayed, maybe until 2022.

Economic proposals outlined thus far include a $700billion plan to aid US businesses through procurementand R&D investment and a $2 trillion plan to createjobs by building a modern infrastructure and a cleanenergy future. Both are intended to be paid for with taxincreases. Biden has also proposed improvements to USmanufacturing through a 10% “Made in America” TaxCredit for investment in revitalizing factories andreshoring jobs, which has been paired with a 10%“offshoring” surtax on a US company’s overseasproduction profits from sales back to the US — suchincome would be taxed at 30.8%.

Also intended to combat offshoring are changes to theglobal intangible low-taxed income (GILTI) rules, withmany Democrats arguing they do not have enoughteeth to prevent US companies from taking undueadvantage of other international tax changes includedin the TCJA that partially eliminated US tax on foreign-source earnings. Biden has proposed combining the28% corporate tax rate with a 21% tax rate on GILTI —seeming to concede that GILTI should be taxed at arate lower than the corporate tax rate — and proposingto apply GILTI on a jurisdictional basis, rather than anaggregate basis as it currently applies, plus repealingthe GILTI relief for foreign profits relating to qualifiedtangible property. Democrats supporting such a movewill find good company with the OECD’s efforts todevelop model minimum tax legislation under Pillar 2 ofthe Base Erosion and Profit Shifting 2.0 project thatalso appears likely to include a per-jurisdictionapproach. All these ideas seem to be aligned with

congressional Democrats’ stated desire to removeincentives for companies to shift US jobs and physicaloperations overseas. However, inconsistencies with theOECD approach are also clear. For example, Biden’sproposal to dramatically increase the GILTI tax rateruns counter to the OECD minimum tax model, whichlikely will include a minimum tax threshold closer to12.5%. Another key question is whether Biden andcongressional Democrats will simply push to tinker withGILTI, or whether additional changes to the TCJA’sinternational tax reforms may be considered.

Beyond international tax, Biden’s priorities align withthe longtime Democratic priority of making wealthyindividuals and corporations “pay their fair share,” apush that has increased, not abated, since enactmentof the TCJA with solely Republican support.

Biden has called for a “minimum corporate tax” of 15%applying to book income for companies with net incomegreater than $100 million, which is seen as addressingconcerns that some major corporations pay no taxes.

Individual provisions include returning the top incometax rate to 39.6% and repeal of lower rates on capitalgains and dividends for those with incomes over $1million. Estate tax rules would be returned to the 2009regime of a $3.5 million exemption and 45% rate.

Biden has stated that tax increases won’t affectfamilies earning less than $400,000 annually. He hasalso reportedly proposed phasing out above a$400,000 income threshold the Section 199A qualifiedbusiness income deduction available to individuals,including many owners of sole proprietorships,partnerships and S corporations, and capping the valueof itemized deductions at 28%.

Not all of Biden’s proposals are tax increases. He hasalso, in some of the same plans that call for taxprovisions as revenue offsets, proposed to extend,revive or create tax incentives, including credits forfirst-time homebuyers and renters, as well as for thecare of children and the elderly.

President-elect Biden will likely lay out his tax proposalsin an FY2022 budget, which will likely be outlined a fewmonths into his presidency and detailed more fully inthe spring. Biden has patterned much of his tax agendaon Obama administration proposals, and could similarlyinclude significant lists of tax increases in Treasury“green books.” Even if the proposals have no hope ofadvancement, they could illustrate how money could beredistributed toward middle-class priorities.


Business tax proposals Clim

ate/

Infr

a-st

ruct

ure

Hea

lthca

re

Educ

atio

n

Mad

e in

USA

, R&D

Child

,el

der

care

Hou

sing

Corporaterate 28%

Otherbusinesschanges

End subsidies for fossil fuelsRepeal CARES Act excess business losses provisionNo ad deduction for Rx companiesFinancial fee on certain liabilities of firms with morethan $50b in assets

Intl’ tax

21% GILTI rate, per-country basis, no GILTI relief forforeign profits relating to qualified tangible propertyTighter anti-inversion rules

10% offshoring penalty

Minimum tax 15% minimum tax on book income >$100m

Real estate End use of like-kind exchanges, use of realestate losses to reduce tax liability

Individual tax proposals

Top incometax rate

39.6%; 199A deduction phased out for incomesabove $400,000

Capitalgains

Repeal lower tax rate for capital gains forhouseholds earning >$1m

Itemizeddeductions

Pease limitation reinstated over $400,000;28% cap for “wealthiest“

Estate tax$3.5m exemption, 45% rate (2009 regime)

End estate tax stepped-up basis

SocialSecurity

Increase payroll tax withholding for annual incomesmore than $400k

Highlights of Biden tax increase proposalsand plans they would pay for

Biden and congressional Democrats are generallyideologically aligned, having argued for years againstoffshoring and in favor of making the wealthy andcorporations pay their fair share. The leaders ofcongressional tax-writing committees, Rep. Neal andSenator Wyden, have long aspired to act on the bread-and-butter proposal to increase infrastructureinvestment, and Speaker Pelosi has drawn comparisonsbetween Biden’s plan and the House infrastructure bill.They would be expected to largely let theAdministration drive the tax agenda, at least at first.Whether in coronavirus relief or another context,Democrats are also likely to act on their long-held goalof expanding low-income tax credits like the EarnedIncome Tax Credit and Child Tax Credit. The HEROESAct was characterized as a Democratic wish list, so itwill be looked upon as representing where Democratswant to go when in charge in Washington.

However, the influence of the progressive flank of theparty will be felt, along with that of moderate senatorslike Manchin and Kyrsten Sinema (D-AZ), whose voteswill be crucial even under reconciliation.

There are also revenue proposals beyond what Bidenhas embraced, including a financial transactions tax onstock, bond and derivative transactions. SenatorWyden has also proposed a plan to impose a mark-to-market approach requiring capital gains to be taxedannually at ordinary income levels for wealthytaxpayers. “Anti-deferral [mark-to-market] accountingrules” would only apply to individuals with more than$1 million in annual income or $10 million in assets.Applicable taxpayers would be required to pay annualtaxes on unrealized gains and take a deduction forunrealized losses on liquid assets, such as stock, whilefor illiquid assets a look-back charge would be imposedon gains realized upon the sale of these assets.

The TCJA started out as a tax cut but now presents awaterfall of potential tax increases related to interestdeductibility, R&D amortization and bonusdepreciation. Democrats may be reluctant to supportchanges to the law they unanimously voted against.However, potential compromise tax legislation couldtake the form of Republicans negotiating to keep or fixsome of their priorities from the TCJA in exchange forDemocratic priorities, such as expansion of low-incomecredits.

R&Dexpensing

Interestdeduction

based on EBITDA100% expensing GILTI deductionat 50%

FDII deduction at37.5%

BEAT rate:10%/11% for

banks/dealers2020 50%2021 30%2022 EBIT

2023Phased down in

20% steps202420252026 37.5% 21.875% 12.5%/13.5%

Select changes scheduled under TCJA


HealthHealth care is consistently ranked as a top electionconcern for voters and was even more so this year asthe 2020 election was dominated by a global healthcare pandemic that has threatened not only oureconomy, but also stressed our health care system.According to Pew Research Center, 82% of registeredBiden/Lean Biden voters said health care is “veryimportant” to their 2020 vote, and the electorate willexpect movement out of a Biden administration on thecoronavirus and beyond.

Delivering on many campaign promises, however,necessitates congressional action. Despite having aDemocratic-controlled Senate, movement hinges ongetting both wings of the party on board with legislationand a decision to either remove the filibuster or try topass a health care bill through the more limited processof budget reconciliation. Due to the difficulty andpolitical capital expended to advance such a fight,bigger reform may be delayed; however, that calculuswould change if the Supreme Court rules this spring infavor of Republican states aiming to strike down theACA. Other changes in health care policy could focus onbipartisan areas of consensus due to limitationsimposed by partisanship, procedure and pandemicbudget constraints. This means potentially picking upwhere committees left off in negotiations around drugpricing – the big area of bipartisan focus last Congressbeyond surprise billing, which was addressed in theyear-end package – and focusing on other areas ofbipartisan consensus including rural health,telemedicine, maternal mortality, health equity, mentalhealth and opioid use disorders.

Biden is also likely to use executive action to unwindvarious Trump regulations and guidance that underminethe ACA, reverse the rollback of dozens of Obama-erapublic health rules, and freeze Trump rules that havenot yet taken effect. Biden has nominated CaliforniaAttorney General and former House member XavierBecerra to helm his health department, who hasemerged as the nation’s defender of the ACA, leadingmore than a dozen other Democratic attorneys generalin supporting the law at the Supreme Court. Becerra hasalso been outspoken on issues including women’s healthand addressing health disparities, has gone after hospitalconsolidation, and joined other attorneys general inholding drug companies accountable for their role in theopioid crisis and providing discounts under the 340Bprogram. After confirmation, Becerra will lead the Bidenteam in regulatory change to pursue his health careagenda regardless of congressional movement.

Biden administration priorities

Coronavirus response. Amid the global pandemic, Bidenhas said he would give the federal government primaryresponsibility for the response to the coronavirus,putting scientists and public health leaders “front andcenter” in communication with the American people andproviding “clear, consistent, evidence-based nationalguidance.” In December, he announced a 100-day planto manage the pandemic, including distributing 100million vaccine shots and signing an executive orderrequiring people to wear masks on interstatetransportation and in federal buildings. Among otheritems, Biden supports increased investment in testingand tracing, utilizing the Defense Production Act toramp up production of personal protective equipment(PPE), providing vaccines and treatment at no cost topatients, and restoring the White House pandemic officewhile re-embracing international engagement effortsand funding for the World Health Organization (WHO).

Strengthening the ACA. The cornerstone of the Bidenhealth care platform is the creation of a new publichealth insurance option, similar to Medicare, in whichthe federal government would set providerreimbursements and premium rates. Costs would varyon a sliding scale based on income and automaticallyenroll at zero cost those in the Medicaid expansionpopulation in states that have not expanded. Biden alsosupports other changes to strengthen the ACA includingexpanding eligibility for financial assistance and makingpremium tax credits more generous by eliminating the400% cap on tax credit eligibility; lowering the limit onthe cost of coverage from 9.86% of income to 8.5%; andreducing out-of-pocket cost sharing for enrollees bysetting the benchmark plan at the gold level. Bidenwould also restore funding to consumer outreach andassistance programs, which were cut by the Trumpadministration, and unwind various Trump-eraregulations and guidance that undermine the ACA, suchas those expanding access to short-term limitedduration plans and supporting Medicaid workrequirements and block grants.

Expanding Medicare, Medicaid and long-term care. Inaddition to automatically enrolling into the public optionadults who would be eligible for Medicaid if their statehad expanded, Biden would allow states that haveexpanded Medicaid to move enrollees into the publicoption as long as they continue their current share ofthe costs (“maintenance-of-effort” payments). Bidenalso supports increased federal Medicaid funding forhome- and community-based services.


Regarding Medicare, Biden favors expanding Medicareeligibility to age 60 and adding vision, hearing anddental benefits. He also favors tax credits for informalcaregivers and seniors who purchase private long-termcare insurance and improving nursing home staffingand quality standards.

Reducing drug prices. Biden supports legislationapproved by the Democratic-led House ofRepresentatives last year giving Medicare the power tonegotiate “abusively priced” prescription drugs withmanufacturers, capped at a level associated withOrganization for Economic Cooperation andDevelopment (OECD) prices, which would be leveragedfor Medicare and the public option but also available toprivate payers. Biden also supports proposals to limitprice increases for all brand, biotech, and highly pricedgenerics to the general inflation rate, in addition tolimiting the prices of new specialty drugs with little tono competition by establishing an independent reviewboard to recommend a price through externalreference pricing. Like President Trump, Biden alsosupports proposals to allow for safe drug importation,to cap out-of-pocket costs in Medicare Part D, toeliminate the tax break for pharmaceutical companyadvertising expenses, and various bipartisan proposalsaimed at improving the supply of quality generics bycracking down on anti-competitive efforts that delayentry. Biden’s promise to freeze Trump administrationproposed rules could also delay recently finalized drugpricing rules, including one to end drug rebates due totheir sizable economic impact.

Mental health and the opioid crisis. Biden aims toredouble his efforts to implement the federal mentalhealth parity law in addition to improving access tomental health care and eliminating stigma aroundmental health, which he championed as vice president.Included in this are plans to implement suicideprevention strategies for veterans and the LGBTQcommunity, double the number of mental healthprofessionals in schools and encourage youth to pursuehealth care jobs. Biden has a five-point plan to addressthe opioid crisis that includes increased access toservices, reducing unnecessary opioid prescriptionsand holding pharma accountable for their role in thecrisis. Biden would direct the US Justice Department tomake addressing bad actors a top investigative priorityand the Drug Enforcement Administration (DEA) to stepup efforts to identify suspicious shipments and protectstruggling communities.

Reducing disparities in care. Biden’s platform includesplans to reduce disparities in care and increase accessto all regardless of gender, race, income, sexualorientation or Zip code. This includes expanding accessto contraception and protecting the right to anabortion through restored federal funding for PlannedParenthood and a reversal of the Mexico City Policy(also referred to as the “global gag rule”). Biden alsosupports a national strategy to address maternalmortality, health care protections for the LGBTQcommunity, and a doubling of America’s investment incommunity health centers to serve underservedpopulations. Biden also supports an updated nationalHIV/AIDS strategy and restored global funding throughPEPFAR and the Global Fund. Regarding immigrant

health care, Biden would reverse the Trumpadministration’s “public charge” policy (which has beenblocked in the courts), expand ACA coverage to includeDeferred Action for Childhood Arrivals (DACA)recipients, remove the waiting period in Medicaid andthe Children’s Health Insurance Program (CHIP) forlawfully present immigrants, and allow undocumentedimmigrants to purchase unsubsidized coverage in theACA marketplace.

Value-based care, price transparency andinteroperability. Biden has not publicly said muchabout these three issues, seen as focus areas for theTrump Administration, however they are generallybipartisan in nature and will continue to be a focus bothin the administration and in Congress. Biden will likelyleverage the CMS Innovation Center (CMMI) to continuethe push from Medicare fee-for-service to value-basedcare, begun in earnest under the Obamaadministration, which could focus on increasing accessto primary care among other items. There is also noindication he will unravel Trump-era final rules thathave pushed providers, insurers and health IT towardgreater price transparency and interoperability in aneffort to get data into the hands of consumers.

Surprise billing. Biden supports prohibiting health careproviders from charging out-of-network rates insituations when patients have no control over who theycan see, like in the case of emergency hospitalizations.While this was addressed in the 2020 year-endpackage, Biden’s Health and Human Services (HHS)Department will be in charge of crafting the regulationsthat will provide additional specifics around theindependent dispute resolution (IDR) process that willdetermine out-of-network rates to be paid by healthplans if parties are unable to reach agreement, alongwith other details regarding the bill’s reportingrequirements, transparency components and patientprotections.

Market concentration. Biden says his administrationwill aggressively use its antitrust authority to addressmarket concentration across the health care systemthat has driven up prices for consumers. This will likelybe a focus area for HHS Secretary-designate Becerra,considering he brought a high-profile antitrust caseagainst nonprofit health care giant Sutter Health asCalifornia Attorney General and drafted an antitrust billthat would have given the attorney general power toreview private equity- or hedge fund-led mergers oracquisitions of a health care system or hospital.

Congressional action

Pandemic relief will continue to be the top health carepriority for Democrats in Congress, likely aiming toadvance priorities that were not included in the year-end relief package. The House-passed HEROES Act is aplausible starting point, which in addition to funding forproviders, testing and tracing – some of which wasincluded in the year-end package – also includedincreased Medicaid and Medicare payments, an ACAspecial enrollment period, and a variety of other healthcare and a variety of economic measures and individualand business supports.


Beyond bipartisan areas of consensus, what gets donein a Democratic-controlled Congress could depend onthe future of the filibuster and whether SenateDemocrats choose to remove it or try to pass a healthcare bill through the more limited process of budgetreconciliation. This, however, could prove challenginggiven statements from Democrats in Republican states,including Joe Manchin (WV) and Jon Tester (MT), whohave pledged to keep the 60-vote requirement forlegislation.

Democrats will also have to determine whether theyfocus on a bigger bill package, which might include apublic option, or smaller improvements to the ACA andhealth care markets. Similar to 2016, when SenateRepublicans failed to advance an ACA repeal-and-replace bill, there is divergence across the party on thebest market intervention and it may be difficult to geteveryone on board with a single piece of legislation.Due to the difficulty and political capital expended toadvance such a fight, bigger reform may be delayed;however, the calculus would certainly change if theSupreme Court rules in favor of Republican statesaiming to strike down the ACA due to the allegedunconstitutionality of its individual mandate, althoughthis seems unlikely following oral arguments late lastyear.

New Senate leadership priorities

New Democratic leadership will take the reins of thetwo key health care committees in the Senate – theSenate Finance and Health, Education, Labor andPensions (HELP) Committees. Sen. Ron Wyden (D-OR)is expected to helm the Finance Committee and hassaid he wants to focus on pandemic relief andaddressing systemic racism in the nation’s health caresystem, including developing maternal mortalitylegislation and advancing other equity concerns.

Wyden will also likely want to pick up where he left offin terms of drug pricing legislation, which hecosponsored with current committee ChairmanGrassley, who is set to vacate his spot as the topRepublican on the committee. While Republicansvehemently oppose the House-passed Democratic billthat would allow Medicare to negotiate drug prices, theFinance bill features instead provisions to rein in priceincreases through measures including mandatedmanufacturer rebates for prices rising faster thaninflation in Medicare Part B and D, price reporting fordrug cost increases, and Medicare Part D redesign.While Wyden and Grassley were unable to get enoughsupport from Senate Republicans to advance thelegislation, a new Democratic majority would likely beable to push through something similar, barringdemands from the left wing of the party to includeMedicare negotiation or other more progressivemeasures. Such a bill would also likely have significantcost savings, something that will be highly sought aftergiven the difficult budget environment, but it may stilllack sufficient Republican votes to pass easily throughthe Senate. Sen. Mike Crapo (R-IA), who is likely tosucceed Grassley as the top Republican on thecommittee, put forward a Republican alternative to thebipartisan Grassley-Wyden bill that is less aggressiveand leaves the inflationary rebate piece that Democrats

insist must be included as a key mechanism for curbingprices.

Sen. Patty Murray (D-WA) is expected to take control ofthe HELP Committee, the principal health care panel inthe Senate. She would likely also be focused onpandemic relief in addition to protecting and expandingon the ACA following the systematic dismantlingapproach of the Trump Administration. Murray wouldalso have a new negotiating partner on the committee,as Sen. Lamar Alexander (R-TN) retired, with RichardBurr (R-NC) having the right of first refusal followed byRand Paul (R-KY). Following the inclusion of thecommittee’s top priority – surprise billing – in the 2020year-end package, the committee will be freed up tofocus on other priorities, including traditionallybipartisan health care packages like prescription andmedical device user fees (PDUFA and MDUFA) alongwith those addressing issues such as opioids andmental health.

Other areas of bipartisan consensus

In addition to the bipartisan priorities of lowering drugprices, health equity, mental health and opioid usedisorders, another likely focus area is on issuesplaguing rural and underserved communities, many ofwhich are struggling with hospital closures and havingdifficulty with provider recruitment and retention. Abipartisan task force stood up this summer by theHouse Ways & Means Committee aims to explore policysolutions for rural and underserved communities.

Telehealth is also an area ripe for bipartisancompromise following the need for an expansionthroughout the coronavirus pandemic, with thepotential to make permanent some of the newflexibilities after the COVID-19 public emergency isover. A robust package featuring various Medicare andMedicaid issues is also overdue. All of these areas,however, are likely to be costly and could serve as aroadblock to significant change.

State and legal action

States will continue to be active in health care, withmany advancing legislation at the state level thataddresses issues Congress has been unable to advance,such as drug pricing, transparency and data sharing.States will also continue to submit 1115 Medicaiddemonstration and 1332 state innovation waivers,although those proposing policies such as Medicaidwork requirements are expected to be a nonstarterwith the Biden administration.

How far states can go will also in part hinge on thecourts, which to date have blocked certain statemovements including Medicaid work requirements. TheSupreme Court also recently upheld an Arkansas lawthat regulates pharmacy benefit managers (PBMs),finding that their state law requiring PBMs to reimburseprescription drugs at a rate equal or higher than thepharmacy’s wholesale acquisition cost is not preemptedby the Employee Retirement Income Security Act(ERISA). This and other cases in the pipeline for thisspring have the potential to impact states’ ability toregulate their own health care markets.


Financial ServicesIn financial services, Biden’s win and victories byDemocrats in the Senate and House will bring agoverning partnership between the White House andCongress that could produce a number of progressivepolicy victories. While the narrow 50-50 Senatemajority will likely restrict the scope of what Democratscan achieve, the Biden White House could press for“public option” approaches not just for healthinsurance, but also consumer bank accounts and creditreporting, ideas that will be welcomed by Democraticcommittee chairs. The political alignment will also likelymean greater scrutiny of big banks and “shadowbanking” risks; an emphasis on affordable housingissues, racial diversity and student debt; and a newlyenergized Consumer Financial Protection Bureau (CFPB).Biden and congressional Democrats will also renew theObama-era effort to impose a fiduciary duty onsecurities brokers and advisers to retirement plans, andresume their scrutiny of private equity firms. Finally, theeventual shift to Democratic-appointed regulators willhave consequences for the pending rewrite of a key1970s anti-redlining law for banks, and could shift theSEC back toward “rules-based” enforcement.

Biden administration priorities. As a senator from thebanking-friendly state of Delaware for many years,Biden was a reliable defender of the state’s bankinglaws and the credit card industry, and squared offagainst the future Sen. Elizabeth Warren (D-MA) overthe 2005 rewrite of bankruptcy law that banks hadsought for years. That posture will probably become arelic of history, however, as Biden’s White House seemslikely to work hand-in-glove with the two liberalchairmen of the House and Senate bankingcommittees. Biden’s campaign signed on to a numberof consumer-friendly ideas negotiated by the Biden-Sanders unity task force. These include a proposal toreplace the three credit reporting bureaus (Equifax,Experian and TransUnion) with one federal creditreporting registry, housed in the CFPB, over a period ofyears. Biden could support the more incrementalapproach of simply offering the new agency as analternative to the three bureaus, while requiringfederally backed mortgages and student loans to use it.Sen. Sherrod Brown (D-OH), the incoming chairman ofthe Senate Banking Committee, has signaled his interestin the issue, tellingPolitico on Oct. 28, “The nextCongress must enact bold, comprehensive legislation toreform a credit reporting industry that has failed workingfamilies and that perpetuates systemic racism andeconomic inequality. And that includes taking up Joe

Biden’s proposal for a public credit registry.”

Biden has also endorsed allowing the US Postal Serviceto offer checking and savings accounts, remittanceservices and small-dollar loans in an effort to reach theunbanked, though the administration could soothealarm in the industry by taking the more modestapproach of allowing for-profit banks to offer a rosterof consumer-friendly products at post offices. Biden’scampaign also supported an idea by Sen. Brown tohave the Federal Reserve be involved in creating“FedAccount” consumer bank accounts with no balancerequirements or fees, which could encourage savingsby low-income households while allowing accountholders to receive federal stimulus payments. But thatidea will meet some resistance from the BankingCcommittee’s incoming ranking member, Pat Toomey(R-PA), who told American Banker after the Novemberelection, “The idea that we should have thegovernment go into the banking business, that does notstrike me as a good idea.” Toomey instead suggestedreaching the unbanked through financial innovationsand lighter regulation of community banks. Biden’scampaign has also said he will encourage banks to offersmall-dollar loans as a way of eroding the businessmodel of high-interest payday loan vendors.

Notably, Biden and Sanders also agreed that aDemocratic government should consider restoringGlass-Steagall firewalls between retail banking andriskier investment banking that were taken down by the1999 Gramm-Leach-Bliley Act. While that idea is catnipto Sen. Brown and other critics of large banks, givenother priorities it seems improbable that Biden, Brownand returning House Financial Services CommitteeChairman Maxine Waters (D-CA) would devote themonths necessary to the divisive task of reinstatingGlass-Steagall, though other changes in the financialsystem are being contemplated by former CFTC chairGary Gensler and KeyBank NA executive Don Graves,whom Biden named to the transition team after theNovember election. Other priorities enumerated by theBiden-Sanders agreement could get a push from thenew administration, such as proposals to allow studentdebt to be discharged in bankruptcy; to immediatelyforgive $10,000 of student debt per person per yearfor up to five years (originally offered by Sen. Warren);to crack down on “predatory” for-profit colleges; and totarget “usurious” credit card rates and strengthenoversight of credit cards and consumer lendinggenerally.


Senate Banking Committee. With Democratsreclaiming the Senate majority, Sen. Brown will be thenew chairman of the Banking Committee, providing aprominent perch for the unabashedly populist, pro-consumer, pro-union senator who has lashed“megabanks” mercilessly for their business practicesover the years. At a final hearing of banking regulatorson November 10, Brown said, “We have to break up thebiggest banks, and give that power to everyone elsewho has been denied a voice in our economy. Ourfinancial system should be a public good.”

Brown told The Hill in September that as chairman,after addressing pandemic relief he would focus onhousing issues, something the committee did not spendmuch time on under previous Chairman Mike Crapo (R-ID). Brown could also be expected to try to strengthencapital rules for big banks and press for regulators totoughen stress tests and “living will” resolution plansfor those banks. He shares Chairman Waters’ interestin targeting systemic racism in U.S. institutions andlikely will push for the Fed to be more pro-active inmeasuring and addressing such inequalities, as well aspressing financial firms and public companies generallyto formally disclose their efforts to promote diversityamong both senior executives and rank-and-fileworkers. Brown has also complained that the SEC stillhas not completed Dodd-Frank rules under whichcompanies could claw back incentive compensationpaid to executives whose firms had to correct materialerrors in their financial statements.

Brown could also seek to reinvigorate other Dodd-Frankachievements, by expanding the CFPB’s authority topolice financial products or restoring the FinancialStability Oversight Council’s power to designatespecific companies as systemically importantinstitutions (SIFIs). The FSOC voted to give up thatauthority in December 2019 after a presidentialexecutive order and a rulemaking guided by outgoingTreasury Secretary Mnuchin, who has chaired the council.Brown’s interest in post-crisis financial stability issues hasalso been seen in his focus on “shadow banking” risksposed by overnight repo markets and money marketfunds, both of which proved unstable in the marketturmoil that accompanied the early days of thepandemic. Brown also is likely to focus the committeeon problems associated with private equity firms, asthe House Financial Services Committee did last year.

Many of these initiatives would prove poisonous toRepublicans on the Banking Committee, however, suchas incoming Ranking Member Toomey, and the panelhas had a tradition of not spending time marking upparty-line bills that would inevitably face a filibuster onthe Senate floor. All that could change if SenateDemocrats moved to eliminate the legislative filibuster,though with a narrow 50-50 split in the Senate thatscenario is likely a long shot.

House Financial Services Committee. Maxine Waters(D-CA) returns as the chairman of the House FinancialServices Committee, which was a prolific generator ofHouse floor legislation in the last Congress, most ofwhich was ignored by then-Senate Banking CommitteeChairman Crapo and the Senate’s GOP leadership.Waters will have a more receptive partner in Sen.Brown, and both can be expected to work cooperatively

with Biden’s White House and Treasury Department toadvance a number of shared progressive priorities.

Waters can be guaranteed to maintain a focus onhousing issues and oversight of the Department ofHousing and Urban Development (HUD) and FederalHousing Authority (FHA), including a bill she sponsoredin 2019 with Vice President-elect Kamala Harris tospend more than $100 billion on affordable housing.Like Sen. Brown, Waters was an intense critic of theOffice of the Comptroller of the Currency’s May 2020update of the Community Reinvestment Act, a 1977law that requires banks to invest in underservedneighborhoods, calling it overly reliant on expendituresfor CRA credit instead of input from local communities.No other regulators signed on to the OCC’s regime, soWaters will maintain close oversight of the FederalReserve’s own CRA overhaul expected next year. At afinal November 12 hearing of banking regulators at hercommittee, Waters specifically cited the OCC’s CRArule, Federal Reserve actions that have weakened theDodd-Frank Volcker Rule, and “a number of troublingrulemakings to weaken capital and other prudentialrequirements for the nation’s largest banks… I amputting our witnesses on notice that I will be workingwith the Biden administration to roll back these rules.”

Waters and other senior committee Democrats thoughttheir approach of summoning bank and tech-companyCEOs for hearings over the last two years was asuccess, and more of those can be expected. Watershas also been a harsh critic of the SEC’s newRegulation Best Interest, saying it fails to hold brokersto a fiduciary standard when they recommend productsto clients, and will also press for a Biden-appointed Laborsecretary to revisit the DOL’s fiduciary rule for advisersto retirement plans. The Obama-era 2016 fiduciary rulewas overturned by a federal court; the DOL is in theprocess of completing a new, weaker version, but theBiden-Sanders task force endorsed “taking immediateaction to reverse the Trump administration’sregulations allowing financial advisers to prioritize theirself-interest over their clients’ well-being.”

The SAFE Banking Act, which provides a safe harborfor banking by cannabis businesses in states wheresuch sales are legal, also passed the House in May(attracting support from half the GOP caucus) and willbe reintroduced in the committee next year. In adeparture from the posture of Sen. Crapo, Sen.Toomey has expressed support for this effort, tellingAmerican Banker on November 18, “I am open toworking with my colleagues on how we could enablebusinesses that are operating legally in their respectivestates to be able to have ordinary banking services. Ithink that’s something we should work on.” In general,Waters can be expected to be pulled further left by thegroup of high-profile 2018 freshman Democrats whoare returning to the committee, including AlexandriaOcasio-Cortez (D-NY), Ayanna Pressley (D-MA),Rashida Tlaib (D-MI) and Katie Porter (D-CA).

Waters is also committed to improving diversity amongregulators, telling them at the November 12 hearing,“Financial regulation and the approach to diversity andinclusion in this country are going to change for thebetter… Under President Biden’s leadership, ourfinancial regulators will and must be diverse.


We are emerging from the dark days of the Trumpadministration into the dawn of a new progressiveAmerica, where pro-consumer and pro-investor policieswill always be first on the agenda.”

Financial Regulators

At the November 10 regulators hearing, Sen. Brownsaid, “The ‘Wall Street First’ attitude of the Trumpadministration is over… President-elect Biden will havethe opportunity to install watchdogs at these agencieswho will put working families and their communitiesfirst, and we’ll give Americans confidence that theirgovernment is on their side.” Treasury Secretary-designate Janet Yellen will provide a familiar,consensus-building presence as the new administrationfocuses on pandemic relief and other urgent issues, butthey will have to deal with a number of Trumpappointees with unexpired terms at the Fed, FDIC andelsewhere.

Federal Reserve. At the Fed, Chairman JeromePowell’s term doesn’t expire until Feb. 2022. Whileappointed by President Trump, Powell has not provedto be an ideological chair, and his aggressive postureagainst the pandemic has won him high marks.Renominating Powell could be a way for Biden to signalmoderation and continuity, though a number of othernames will be in the mix when Powell’s term is up, suchas Fed governor Lael Brainard, Sen. Warren, SarahBloom Raskin, Roger Ferguson and others. The term ofRandal Quarles, the Fed’s vice chair of supervision whohas presided over the weakening of certain Dodd-Frankrules for banks, expires in October 2021, and Biden isunlikely to renominate him.

Securities and Exchange Commission. The term offormer SEC Chairman Jay Clayton, who departed theagency in December, featured a number of party-linevotes on rules, including a 3-1 vote in 2019 forRegulation Best Interest, Clayton’s attempt to navigatea standard of care for securities brokers. Democratssaid that effort failed to fulfill the Dodd-Frank Act’s callfor a uniform standard for brokers and financialadvisers. They would welcome a chairman moredevoted to rules-based enforcement over “principles-based.” The Democratic House and Senate could alsouse the Congressional Review Act to overturn anumber of rules that have passed the Commissionsince June, including: 1) amendments to Regulation S-K that eased rules governing how public companiesmust describe risk factors in their financial statements;2) changes to the SEC’s whistleblower program; 3) arule change on “proxy access” that made it moredifficult for shareholders to bring up items for a vote atmeetings; and 4) a loosening of conflict-of-interestrules for independent auditors.

CFPB. At the CFPB, Director Kathy Kraninger’s termdoesn’t expire until Dec. 2023, but given the SupremeCourt’s June 2020 ruling requiring the Bureau’s directorto serve at the pleasure of the president, Kraninger canbe expected to offer her resignation. Rep. Porter has

been mentioned as a possible candidate to lead theCFPB, which under Democratic leadership could resumegreater scrutiny of student loan servicers, mortgageservicers, credit card issuers, bank overdraft fees,installment lenders, debt collectors and credit reportingagencies. The CFPB is also likely to be much more activein rulemaking than under Kraninger’s tenure.

Among other regulators, Biden will get to appoint anew Comptroller of the Currency, the large-bankregulator, as Brian Brooks is currently serving in anunconfirmed acting capacity after the abrupt departureof Joseph Otting in May 2020. (At the eleventh hour,the Trump administration nominated Brooks to serveas the Senate-confirmed Comptroller, but the BankingCommittee never acted on his nomination.) At theFDIC, Chairman Jelena McWilliams’ term isn’t up untilJune 2023; she cannot be removed by Biden and herspokesman has said McWilliams “intends to fulfill” herfull term, but she could find herself outvoted 3-2 byDemocratic board members as current members arereplaced.

At the Federal Housing Finance Agency (FHFA), theGSE regulator, Director Marc Calabria is near thebeginning of a five-year term that doesn’t expire untilApril 2024, but the same Supreme Court ruling onCFPB (Seila Law vs. CFPB) could allow the newpresident to remove him too. The FHFA director’sstatus is also the target of a separate case theSupreme Court will hear this term. In the absence oflegislation establishing a new system for housingfinance, Democrats don’t like Calabria’s plan togradually recapitalize Fannie Mae and Freddie Mac andrelease them from conservatorship, and will press forsomeone with more progressive credentials.

Regulator Term expires

Federal Reserve Board ChairmanJerome Powell February 2022

Fed Vice Chair of Supervision RandalQuarles October 2021

Acting Comptroller of the CurrencyBrian Brooks Acting capacity

FDIC Chairman Jelena McWilliams June 2023

Acting SEC Chairman Elad Roisman Acting capacity

CFPB Director Kathy Kraninger December2023

Federal Housing Finance AgencyDirector Marc Calabria April 2024

National Credit Union AdministrationChairman Rodney Hood August 2023

Financial Regulators’ Terms


RetirementBiden’s win and the election of Democratic majorities inthe House and Senate mean that Democrats will havethe opportunity to pursue their priorities in the area ofretirement and pensions policy. The power given theSenate’s minority to block any bill with less than 60votes in support remains an obstacle, which themajority could surmount by using the budget-reconciliation mechanism or simply fashioning bills thatcould attract enough bipartisan support to deliver 60votes on the Senate side.Biden’s priorities. Biden will come to office havingproposed retirement initiatives during the campaign,though he can be expected to work collaboratively inthis area with key policymakers such as returning HouseWays and Means Chairman Richard Neal (D-MA) andSens. Ben Cardin (D-MD) and Rob Portman (R-OH). Biden has criticized the current set of retirementtax incentives for providing a much stronger tax breakfor upper-income individuals, and has proposed to“equalize” the system by replacing the currentdeduction with a flat dollar tax credit. That proposalhas struggled to find broad support in either house ofCongress, and the administration would likely need toexpend considerable political capital for it to gaintraction in either chamber.Biden has also proposed allowing caregivers who don’treceive wages for their work to make “catch-up”contributions to a qualified retirement savings accounteven if they have no earned income, as is currentlyrequired. The proposal tracks HR 3078, a bipartisanHouse bill offered by Reps. Harley Rouda (D-CA) andJackie Walorski (R-IN). Biden has also supportedexpanding employer-sponsored plans by automaticallyenrolling employees in IRAs, similar to ideas longchampioned by Chairman Neal and the Obamaadministration, and he has proposed shoring up theSocial Security Trust Fund by removing the current$137,700 cap on FICA payroll taxes.

House Committees. At the Ways and MeansCommittee, Chairman Neal has a long record of stronginterest in legislation to expand and promote retirementsavings and retirement security. He is likely to workclosely with Speaker Pelosi and Education & LaborCommittee Chairman Bobby Scott (D-VA) early in the117th Congress to advance pension reforms aimed atshoring up the troubled multiemployer pension fundingsystem, as the House has proposed in last year’s

HEROES legislation. Neal is also expected to seek toadvance the Auto-IRA/Auto-401k proposal that he haslong championed. Those two initiatives promise arobust debate on retirement savings policy early in2021. Scott is also likely to take the lead on Houseaction regarding the continuing battle over investmentadvice standards. At the House Financial ServicesCommittee, Chairman Maxine Waters (D-CA) will leadefforts to examine and potentially revise the Securitiesand Exchange Commission’s Regulation Best Interest.

In addition to those two major initiatives, Neal workedclosely with Ranking Member Kevin Brady (R-TX) on anew bipartisan retirement policy bill in the lastCongress. The Securing a Strong Retirement Act (HR8696), a follow-on to the SECURE Act that was enactedin December 2019, was introduced on October 27 lastyear and is certain to be high on Neal’s priority list thisyear. Key provisions of the bill seek to expandretirement savings coverage and allow Americans tosave more and earlier for their retirement. The bill alsomakes changes to the Multiple Employer Plan (MEP)provisions that were the centerpiece of SECURE, andwould increase the age at which individuals must takerequired minimum distributions from 72, as provided inSECURE, to 75. The bill exempts those with less than$100,000 in retirement savings from having to takeminimum distributions.

Senate committees. With the Senate in Democratichands, incoming Finance Committee Chairman Wydenwill play a key role in moving any retirement legislationthat includes a tax component. In 2019, Wydenproposed raising taxes on capital gains to the samerates as ordinary income, a change that he estimatedwould raise $1.5 trillion to $2 trillion over a decade,which would be used to shore up the Social SecurityTrust Fund. The proposal would exempt the first $3million of a taxpayer’s savings in tax-preferredretirement accounts such as IRAs, 401k plans and403(b) plans, and none of the gains in those accountswould be subject to the annual tax. When the SECUREAct was released in 2019, Wyden called the bill “animportant step forward, but we need to do much moreto help workers save for retirement.”

Finance Committee members Sens. Cardin and Portmanhave a history of working together on bipartisanpension-related legislation, and that partnership could


prove fruitful again in the next Congress. TheSECURE Act included 20 proposals taken froma similar Portman-Cardin bill in the Senate.They joined in sponsoring S. 1431, TheRetirement Security and Savings Act,legislation that shares a great many prioritiesand individual provisions with the Neal-Bradylegislation. The overlap between theNeal/Brady and Cardin/Portman bills couldprovide the basis for legislative progress onretirement priorities.At the Senate HELP Committee, whosejurisdiction includes pensions policy, likelyincoming Chairman Patty Murray (D-WA) lastyear introduced the Information Needed forFinancial Options Risk Mitigation (INFORM) Act,which would require pension plan sponsors toprovide plan participants and retirees withinformation when offering lump-sum

buyouts. The bill was a response to the TrumpAdministration's 2019 move to allow employersto offload pension liabilities throughbuyouts. Murray is also at work on legislationthat would address concerns from the financialservices industry and consumer organizationsregarding the Trump Department of Labor’sregulatory proposal regarding the acceptabilityof environmental, social, and governmentalinvestment options in qualified plans.Similar to the situation in the House relating togoverning the provision of investment advice toretirement accountholders, Sen. Murray hasexpressed interest in amending ERISA toestablish new standards. Murray also has beenthe leader on legislation to address themultiemployer defined benefit plan fundingcrisis.

EY | Assurance | Tax | Strategy and Transactions | Consulting

About EYEY is a global leader in assurance, tax, Strategy and Transactions, Consultingservices. The insights and quality services we deliver help build trust andconfidence in the capital markets and in economies the world over. We developoutstanding leaders who team to deliver on our promises to all of ourstakeholders. In so doing, we play a critical role in building a better workingworld for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of themember firms of Ernst & Young Global Limited, each of which is a separatelegal entity. Ernst & Young Global Limited, a UK company limited by guarantee,does not provide services to clients. Information about how EY collects anduses personal data and a description of the rights individuals have under dataprotection legislation are available via ey.com/privacy. For more informationabout our organization, please visit ey.com.

Ernst & Young LLP is a client-serving member firm of Ernst & Young GlobalLimited operating in the US.

© 2021 Ernst & Young LLP.All Rights Reserved.

This material has been prepared for general informational purposes only and is not intended to be reliedupon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

ey.com

washington in 2021: democrats control white house ......white house & congress georgia elections...

Documents