Cost-of-Living Fairness Act

Bill Number

H.R. 5612

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-09-26: Referred to the House Committee on Oversight and Government Reform.

Last Updated

2025-11-18T17:57:50Z

AI-Generated Summary

Purpose

The "Cost-of-Living Fairness Act" (H.R. 5612) aims to make it easier for individuals and households to qualify for federal benefits or assistance by treating payments for essential insurance premiums as deductible expenses. This reduces the "countable" income used to determine eligibility, helping offset the financial burden of required insurances like auto, home, or flood coverage in everyday living costs.

Key Provisions

• Income Deduction Rule: Payments for "covered insurance policies" must be subtracted from an individual's income and resources when calculating eligibility (or the amount) for benefits under any federal program, or state/local programs funded partly or fully by federal money. This applies regardless of other laws.
• Definition of Covered Insurance Policies:
• Auto insurance for passenger vehicles (e.g., cars) registered in a state, covering the payer or their household member.
• Homeowner or renter insurance that protects against liability, death, health loss, or property damage (e.g., from fire or theft).
• Flood insurance for a primary home, including policies from the National Flood Insurance Program (a federal program), private flood insurers (as defined in federal law), or supplemental policies.
• Key Terms:
• "Insurer," "passenger motor vehicle," and "state" follow definitions from federal transportation law (49 U.S.C. § 32101), meaning standard insurance companies, non-commercial cars/trucks, and U.S. states or territories.
• The rule applies to benefits for the individual or their household members.

Significant Changes to Existing Law

• Overrides conflicting laws by mandating these insurance deductions in eligibility calculations, which may not have been allowed or considered before in many programs.
• Broadens the scope to all federal benefits programs (e.g., food assistance, housing aid, or health coverage) and federally funded state/local ones, potentially standardizing how "essential" expenses like insurance are treated across the board.
• Introduces specific inclusion of flood insurance types, expanding protections for those in flood-prone areas beyond just general property insurance.

Potential Impacts

• On Citizens: Low- and moderate-income individuals or families could qualify for more benefits or higher amounts, as insurance costs (often mandatory, like auto or flood coverage) lower their effective income. This might reduce financial strain from rising living costs but could encourage more insurance purchases to maximize aid.
• On Government Agencies: Federal, state, and local agencies administering benefits (e.g., those handling SNAP for food stamps or Medicaid for health care) may see increased enrollment and payouts, raising program costs. Administrative changes would be needed to verify and deduct these payments.
• On International Relations: No direct impact, as the bill focuses on domestic U.S. insurance and benefit programs.

Main Stakeholders Affected

• Individuals and Households: Especially low-income renters, homeowners, or drivers who pay for required insurances; they stand to gain easier access to aid.
• Benefit Program Administrators: Federal agencies (e.g., USDA for food aid, HUD for housing) and state/local governments relying on federal funds, who must adjust eligibility processes.
• Insurers: Auto, property, and flood insurance providers may indirectly benefit from higher demand if deductions incentivize policy purchases, though they are not directly regulated here.

Notable Legal, Constitutional, or Political Implications

• Legal: The "notwithstanding any other provision of law" clause gives it strong overriding power, potentially leading to court challenges if it conflicts with specific program rules (e.g., in welfare or disaster aid laws). It promotes uniformity in how income is calculated but requires clear implementation guidelines to avoid disputes over what counts as a "payment."
• Constitutional: Aligns with Congress's authority under the Spending Clause (Article I, Section 8) to set conditions for federal funds, without raising federalism issues since it applies to federally supported programs.
• Political: As a bill introduced by Democratic representatives focusing on equity, it highlights debates on cost-of-living adjustments for essential expenses, potentially influencing future welfare reforms amid inflation concerns. Referred to the House Committee on Oversight and Government Reform, it could spark discussions on program efficiency versus accessibility.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Tlaib, Rashida [D-MI-12]

Cosponsors (12)

Rep. DeLauro, Rosa L. [D-CT-3], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Jackson, Jonathan L. [D-IL-1], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. McIver, LaMonica [D-NJ-10], Rep. Thanedar, Shri [D-MI-13], Rep. Escobar, Veronica [D-TX-16], Rep. Watson Coleman, Bonnie [D-NJ-12], Rep. Ramirez, Delia C. [D-IL-3], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Rep. Horsford, Steven [D-NV-4]

Recent Actions

• 2025-09-26: Referred to the House Committee on Oversight and Government Reform.
• 2025-09-26: Introduced in House
• 2025-09-26: Introduced in House

Bill Versions

• Cost-of-Living Fairness Act — issued 2025-09-26 — PDF (3 pages)