It is expected that the House of Representatives will vote on the HEROES Act tomorrow, and it’s expected that it will pass the House of Representatives as the House is Democrat-controlled, and the HEROES Act basically has anything a Democrat could want in a relief package right now, including almost one trillion dollars in state and local funding.
But as you know, any bill has to not only be passed by the House of Representatives, but also the Senate, which is currently Republican-controlled, and also signed by the president, who is obviously a Republican.
And Republican senator Lindsey Graham two days ago said the HEROES Act will be “dead on arrival” in the Senate.
Donald Trump said the same thing yesterday.
But Republican Representative Pete King of New York, who is in the House of Representatives, said he will vote yes on the HEROES Act.
Now, Representative King voting yes on the HEROES Act isn’t going to change anything legislatively; King is in the House, and the HEROES Act will pass the House regardless of his vote because it’s Democrat-controlled.
But why he will vote yes on the HEROES Act is very, very interesting, and I wouldn’t be surprised if more GOP Congresspeople feel the same way that he does, they may not break with the party line here as he will, but they might be feeling this way.
Now, Pete King is from New York’s 2nd congressional district, which covers a portion of the South Shore of Long Island and includes Nassau County.
And this is a swing district, its people voted for Trump in 2016, but he was the first Republican that this district voter for since 1992, so that’s interesting.
And just to give some context, Nassau County has a population of approximately 1.4 million people, and it has reported more COVID-19 deaths than the county where I live, Los Angeles County, has reported, with its population of over 10 million.
So this county, where Representative King is from, has been extremely hard-hit by the virus, and this is why he is voting in favor of the HEROES Act because the HEROES Act includes almost one trillion dollars in state and local funding.
And a portion of this almost trillion dollars of funding, there’s a portion of the funding that goes to states equally, and there’s a portion that goes based on population, and there’s a portion that goes based on how hard a state has been hit by coronavirus.
Representative King said, “New York is going to die, my county, Nassau County, Suffolk County is also in my district. Not only are they running up tremendous cost, their revenue losses are unbelievable.”
So while Pete might not be in favor of all of the, let’s face it, fat in the bill, he’s voting in the way that he feels is best for the people who voted for him to represent them.
He is saying, as a Republican, mind you, that my district, my state needs federal money because it has been wrecked by COVID-19, so that is why he is voting in favor of the HEROES Act.
Here’s more of what King said: “To me, it’s a matter of survival, and I know maybe people are concerned about primaries or what party leadership is going to say, but the reality is, you’re elected to Congress to represent your district.”
He said his district and New York itself have “gotten screwed for so many years, so whenever I get a chance to even the score, I do it.”
Also influencing his decision, King said, is the elimination of the $10,000 cap on the state and local tax itemized deduction.
You’ll recall that the Tax Cuts & Jobs Act, passed in late 2017, set a $10,000 limit on how much state and local taxes you can deduct as an itemized deduction on Schedule A, if your standard deduction which was increased by the Tax Cuts & Jobs Act is more than your itemized deductions anyway, you don’t care, but if your itemized deductions are greater, you care.
Previously, before 2018 when the Tax Cuts & Jobs Act largely became effective, so in 2017, if you paid during the year, for example, $8,000 in state income taxes and $5,000 in property taxes, you could claim an itemized deduction of the sum of $13,000.
Starting with tax year 2018, thanks to the Tax Cuts & Jobs Act, you could now only claim an itemized deduction for those particular items of $10,000.
Who did this tax law change hit the worst?
Those in high income-tax states, they pay a lot of state income tax, and New York is the definition of a high-income tax state.
Also obviously affected by this are states with high property values and relatively high effective property tax rates, and New York is up there too when it comes to property taxes, it’s not as crazy as its neighbor New Jersey, but New York property owners still pay a lot of property taxes because its effective property tax rate is rather high and because property values are high there as well.
And the tax act came along and said, you can’t deduct all that anymore, only up to $10,000.
Obviously this really affects those in states like New York, where Representative King is from.
HEROES Act seeks to eliminate that $10,000 cap so individuals who itemize deductions, like high-income New Yorkers in big houses on Long Island, can now deduct all those taxes as an itemized deduction.
Representative King said that factor is influencing his decision as well.
Now, King said that he realizes that the bill is dead on arrival in the Senate, but said he’s hopeful that Republicans will view it as a starting point for negotiations, just like I told you yesterday, Republicans aren’t opposed to another relief bill, they’re just opposed to another relief bill right this second and another relief bill that includes things like $50 billion for environmental justice grants.
I’ll leave you with this last thing that Pete King said: “I think the Speaker is piling it in there to keep our left-wing base happy — I’m against all that, but if that’s the price I have to pay to get funding to keep New York and Nassau County and Suffolk County and New York City alive, then I’ll do that. And a lot of it is going to come out in the Senate.”
So we know that at least one Republican supports this thing, but he’s a Republican from a blue state.
Do Senators from red states that would proportionately get a lot less of the state and local funding in this bill really care?
And of course, just from an elections standpoint, does Trump care?
Solid blue states like New York, which hasn’t voted for a Republican since Ronald Reagan, aren’t voting for the Donald anyway.