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The House of Representatives this afternoon passed the Senate-amended version of H.R. 1651, the “COVID-19 Bankruptcy Relief Extension Act of 2021.” The legislation will extend personal and small business bankruptcy relief provisions that were part of last year's CARES Act through March 2022. Some of the key provisions of last year's relief packages were the increased debt limit to $7.5 million for small business debtors electing to file under subchapter V and allowing individuals to seek COVID-19–related hardship modifications, among other changes. The legislation was amended and passed unanimous consent by the Senate on Wednesday night to only include the CARES Act bankruptcy provisions. The amendment struck section 2(c) from the bill, which was the section extending the bankruptcy provisions of December's “Consolidated Appropriations Act of 2021” (CAA) that are due to sunset on December 27. While the COVID-19 Bankruptcy Relief Extension Act originally proposed the CAA provisions to expire at the same time as the CARES bankruptcy provisions on March 27, 2022, the amendment means that the CAA provisions will still expire in eight months. H.R. 1651 now heads to President Biden’s desk for signature.

Senate Judiciary Chair Dick Durbin (D-Ill.) and Ranking Member Chuck Grassley (R-Iowa) introduced S. 473 on February 25 to extend the bankruptcy provision sunsets, and House Judiciary Committee Chairman Jerry Nadler, D-N.Y., introduced H.R. 1651, the House companion, on March 8. ABI on March 5 sent a letter to Senate Judiciary Committee leadership supporting S. 473, the "COVID-19 Bankruptcy Relief Extension Act," to extend, for another year, bankruptcy-relief provisions due to sunset in the 2020 CARES Act and December 2020 omnibus appropriations bill. “There is no doubt that the COVID-19 pandemic and its aftermath will continue to put significant strain on U.S. small businesses in the near future and perhaps for years to come,” ABI Executive Director Amy Quackenboss wrote in the letter to Sens. Durbin and Grassley. “By extending the increased debt limit of the SBRA, the COVID-19 Bankruptcy Relief Extension Act offers much-needed relief to a growing number of U.S. small businesses who find themselves in need of reorganizing in order to stay in business.” Click here to read ABI’s letter.

Democrats in Congress began building the policy case for sharp corporate-tax increases, arguing that Republicans went too far with their 2017 tax cuts. Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, said he and Sens. Sherrod Brown (D-Ohio) and Mark Warner (D-Va.) will soon release a more detailed framework for how multinational corporations should be taxed, the Wall Street Journal reported. Sen. Bernie Sanders of Vermont, the Budget Committee chairman, released a plan Thursday that would raise $1 trillion over a decade. Sen. Elizabeth Warren (D-Mass.) said she is writing legislation to impose a minimum tax on profitable companies. Versions of some of those ideas are expected to appear in the tax-and-spending agenda that President Biden will unveil next week, and Congress is poised to act on them this year to help pay for infrastructure spending. In all, Democrats are planning significant reversals of the 2017 tax law signed by then-President Donald Trump, though they aren’t calling for returning to the previous status quo. They are particularly eyeing features of the law that they say give companies incentives to move activity outside the U.S. There are countervailing incentives in the law, and it is far from clear that companies have actually moved production outside the U.S. for tax reasons in the past three years. Some companies have brought intellectual property to the U.S., and corporate choices often have nontax purposes.

Treasury Secretary Janet Yellen said yesterday that the U.S. economy remains in crisis from the pandemic even as she defended developing plans for future tax increases to pay for new public investments, Reuters reported. Yellen spoke at a hearing of the House Financial Services Committee that was ostensibly to discuss the country’s recovery from the coronavirus-triggered recession, but turned instead into a skirmish over priorities far beyond it. Republican members of the committee challenged Yellen and Fed Chair Jerome Powell on issues like plans to build climate change into financial regulation, and specifically quizzed Yellen on how the United States can simultaneously be in crisis and healthy enough to consider raising taxes. The immediate hole remains deep, Yellen said, with “a huge problem of joblessness” following the loss of employment due to the pandemic. “But once the economy is strong again President Biden is likely to propose that we engage in long-term plans to address longstanding investment shortfalls...in infrastructure, investment to address climate risk, investments in people, R&D, manufacturing,” she said. “It is necessary to pay for them.” One possibility is boosting the corporate tax rate back to 28% and fixing a “global race to the bottom” in what companies pay. On the broad economic environment, Powell downplayed concerns of some lawmakers about the possibility of coming inflation as the Fed’s loose monetary policy coincides with an economic reopening expected to spark the strongest growth since the 1980s. “We do expect inflation will move up over the course of the year,” but it will be “neither particularly large nor persistent,” Powell said in testimony after some members said they were concerned about rising prices.

As Congress considers extending the government’s flagship small business coronavirus-aid plan, some of the smallest businesses want government officials to make some recent changes in the program retroactive, the Wall Street Journal reported. The new rules allow sole proprietors, independent contractors and the self-employed to use gross income rather than net profit when determining the size of their forgivable loan. The tweak followed complaints that the program had disproportionately benefited larger businesses, leaving behind sole proprietors and many minority-owned businesses. Bharat Ramamurti, deputy director at the National Economic Council, said he was sympathetic to borrowers unable to benefit from the changes. The Biden administration wanted to move quickly on its loan calculation modification and “retroactivity is a separate legal question,” he said. “It didn’t make sense to hold off on allowing all these other businesses to take advantage of [the new rules] if we could at least make the change prospectively for tens of thousands of them,” he said, adding that the best solution would be for Congress to make the changes retroactive. Roughly 164,000 loans have been submitted using the new formula, the Small Business Administration said. Another 136,000 small-business owners who might have benefited from the change received PPP loans this year based on the older, less generous formula, according to figures provided by the SBA.

Congressional Democrats are seeking to prevent members of the Sackler family who own OxyContin maker Purdue Pharma LP from using the drug company’s bankruptcy to get legal releases freeing them from government lawsuits over the opioid painkiller, WSJ Pro Bankruptcy reported. Rep. Carolyn B. Maloney (D-N.Y.), chairwoman of the House Committee on Oversight and Reform, and senior committee member Rep. Mark DeSaulnier (D-Calif.) introduced a bill on Friday specifying that bankruptcy judges cannot release legal claims brought by states, tribes, municipalities or the U.S. government against a bankrupt company’s owners, like the Sacklers, or its directors, officers or other third parties with ties to a chapter 11 case. The legislative proposal comes after the Sacklers offered to pay $4.28 billion over the next decade in exchange for legal releases that would resolve lawsuits accusing Purdue of helping fuel the opioid epidemic. The settlement offer is part of a larger multibillion-dollar reorganization plan designed to get Purdue out of chapter 11. Attorneys general from 24 states plus Washington, D.C., have come out against Purdue’s plan and have demanded greater transparency and more upfront money from the Sacklers.