Not too much has changed about the core provisions since I wrote on the subject last week, aside from the $300 unemployment boost being extended from ten weeks to eleven. But there are a couple of smaller items worth briefly noting.
First, there’s a fix for “surprise” medical billing, which is when you go to an in-network hospital, often in an emergency, but end up having some work done by an out-of-network doctor and getting slammed with an outrageous bill. As the New York Times puts it, “instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances.” When providers and insurers can’t agree, they’ll have to use an outside arbiter.
Great: Health providers shouldn’t be able to take advantage of people who didn’t have the chance to shop around and often weren’t even told a price before the work was done.
The compromise also allows businesses to fully deduct the costs of meals provided at company expense — the “three-martini-lunch” deduction. (For decades, the deduction has been limited to 50 percent of the amount spent.) This shouldn’t be too costly in the big scheme of things, but it’s not great tax policy, as Kyle Pomerleau of the American Enterprise Institute has explained:
Meals and entertainment can be an ordinary and necessary business expense. For example, it is typical for business owners to take prospective clients out to a meal or a baseball game to build relationships. However, it is hard to distinguish these expenses from the personal consumption of a business owner or their client. Business owners and their clients also like to dine out and go to baseball games on their own.
Current law deals with this ambiguity by placing limitations on the deductibility of business expenses. Under current law, only 50 percent of the cost of qualified business meals are deductible against taxable income. And since the passage of the 2017 tax act, entertainment expenses are no longer deductible. The Joint Committee on Taxation estimated that the changes passed as part of the 2017 tax act would raise approximately $2.2 billion per year.
A more permissive rule will make it easier to pass off personal consumption as a business expense.
The bill also provides some money for schools and vaccinations and extends the eviction moratorium.
As I wrote last week, this is not a perfect compromise — I especially dislike the “$600 checks for everyone!” provision — but it’s good enough.