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COVID-19: Federal Update (6/22)

Updated: Jul 16

Quick Takes

— LAWMAKERS QUEUE UP POLICE REFORM PROPOSALS. The Democratic and Republican visions for comprehensive police reform will come to the House and Senate floors this week.

— HOUSE GEARS UP FOR JULY LEGISLATIVE BLITZ. House lawmakers have queued up votes on several key legislative items over the course of the next two weeks.

— STIMULUS OPTIONS CREATE ELECTION-SEASON QUANDARY FOR SENATE REPUBLICANS. The prospect of more aid has started to alienate conservative supporters wary of large-scale spending.

— SBA, TREASURY REACH AGREEMENT ON PPP TRANSPARENCY. The names of businesses who received loans ranging from $150,000 to $10 million will be disclosed publicly by the federal government.


2020 Election State of Play

TRUMP VS. BIDEN. Current polling projects a close, hard fought race for the White House in 2020. Recently, Vice President Biden has shown a consistent lead in national polls, as well as a slight edge in key swing state polls such as Michigan, Wisconsin, Pennsylvania, and Florida, The Democratic nominee is also demonstrating strong poll numbers in traditionally red states such as Arizona, Georgia, and Texas. It’s still very early, but these indicators tell us to expect a close race.

  • RCP Aggregate: Biden +9.5 percent (source)

  • 538 Aggregate: Biden +9.2 percent (source)

  • PredictIt Market: Biden (57¢) Trump (43¢) (source)

  • Gallup POTUS Approval (6/4): 39 percent (source)

What policies has Vice President Biden championed his 2020 presidential bid? Check out Thorn Run Partner's analysis of the Democratic nominee's health and economic policy platforms.


Capitol Hill Update

— LAWMAKERS QUEUE UP POLICE REFORM PROPOSALS. House and Senate lawmakers are set to consider the Democratic and Republican visions for comprehensive police reform. After clearing The Justice in Policing Act out of the House Judiciary Committee last week, the lower chamber is eyeing a vote on the Democrats' bill when lawmakers convene for votes on Thursday and Friday. Senate Republicans, meanwhile, plan to consider their Just and Unifying Solutions to Invigorate Communities Everywhere (JUSTICE) Act. While lawmakers have expressed a sense of urgency with respect to clinching meaningful reform, it remains to be seen whether lawmakers can reach a bipartisan deal. For more on the state of play with respect to these Congressional police reform efforts, click here to read TRP's comprehensive memo.

— HOUSE SET TO VOTE ON CREDIT REFORM BILL. On the floor this week, a bill sponsored by Reps. Josh Gottheimer (D-NJ) and Tom Reed (R-NY) that seeks to reform the Fair Credit Reporting Act (FCRA) to promote "fair and accurate" credit reporting is set to be brought up for a vote. Specifically, the Protecting Your Credit Score would: (1) create an online portal that provides consumers with access to free credit reports and scores; (2) give the Consumer Financial Protection Bureau (CFPB) with statutory authority to supervise credit reporting agencies; and (3) mandate that credit reporting agencies provide information to consumers surrounding the procurement of a credit report, among other things. While the bill is expected to pass the lower chamber at some point next week, it faces an uncertain path in the GOP-controlled Senate.

— LOWER CHAMBER EYES JULY LEGISLATIVE BLITZ. In addition to the Democrats' police reform package and credit reform legislation, House lawmakers have queued up votes on several key legislative items over the course of the next two weeks. This includes: (1) legislation that seeks to stabilize the Affordable Care Act (ACA); (2) the Senate-passed public lands measure; and (3) a comprehensive package of infrastructure legislation. Following the July 4 district work period, the House is also eyeing action on the fiscal year (FY) 2021 National Defense Authorization Act (NDAA) and appropriations bills.


Washington Insider: What We’re Reading


The Wall Street Journal: Stimulus Options Create Election-Season Quandary for Senate Republicans ($)

The choice before Senate Republicans pondering the need for additional economic stimulus couldn’t be more fraught. Joining Democrats and the White House to pass another bill could help speed a rebound from recession in an election year that is shaping up to be challenging for the party. But the prospect of more aid has started to alienate conservative supporters wary of large-scale spending. That has pushed some Republican senators to hope that the economy recovers without more fiscal support, even as Covid-19 cases are rising in some states.

The New York Times: Vast Federal Aid Has Capped Rise in Poverty, Studies Find ($)

An unprecedented expansion of federal aid has prevented the rise in poverty that experts predicted this year when the coronavirus sent unemployment to the highest level since the Great Depression, two new studies suggest. The assistance could even cause official measures of poverty to fall.

The Hill: Green Groups Challenge Trump Water Rollback

A coalition of environmental groups sued the Trump administration on Monday, challenging a rollback of protections for the nation’s waterways originally put in place under the Obama administration. The Navigable Waters Protection Rule finalized by the Environmental Protection Agency (EPA) in January limits federal protections for smaller bodies of water, a move critics say risks contamination of larger ones used for drinking water.

The Hill: Recession Likely to Hinder Rebounding Emissions Levels

The recession caused by the coronavirus could have a bigger impact on emissions than the earlier stay-at-home orders tied to the pandemic, experts say. Researchers found that emissions dropped by as much as 17 percent worldwide at the beginning of the COVID-19 outbreak as travel plans and daily commutes to work and school came to a halt. But experts say that decline is likely to rebound to pre-coronavirus levels, unless a protracted recession takes hold.


COVID-19: What We’re Hearing


APPROPRIATIONS UPDATE. As the COVID-19 pandemic continues to upend the Congressional schedule, lawmakers are adjusting their expectations for consideration of fiscal year (FY) 2021 spending bills.

  • House. Chairwoman Nita Lowey (D-NY) officially announced the House Appropriations Subcommittee markup schedule for the week of Jul. 6.

  • Jul. 6: State & Foreign Operations, Agriculture, Military Construction-VA

  • Jul. 7: Homeland Security, Interior-Environment, Legislative Branch, Energy-Water, Labor-HHS-Education

  • Jul. 8: Commerce-Science-Justice, Transportation-Housing and Urban Development, Financial Services and General Government, Defense.

  • Senate. Chairman Richard Shelby (R-AL) is delaying the forthcoming markups ahead of the July 4 recess amid partisan disagreements over COVID-19 relief and police reform amendments that Democrats want to offer.

  • When the Appropriations Committee begins its markup process, appropriators will look to skip subcommittee markups for seven out of the FY 2021 spending bills, going straight to full committee markups instead. Senators on the panel are also expected to vote on the 302(b) funding allocations for each of the 12 bills ahead of the forthcoming markups.

— 'CARES 2.0' STATE OF PLAY. While Senate Majority Leader Mitch McConnell (R-KY) has indicated that Congress will likely need to pass another round of COVID-19 relief legislation, Republicans are pushing for a more narrowly-targeted relief package following better-than-expected jobs numbers for the month of May. Conversely, Congressional Democrats are remaining steadfast on their push for another robust stimulus package. As the public health emergency continues to unfold, lawmakers are mulling over several policy options for the next round of legislation, including:

  • Liability. Leader McConnell and Sen. John Cornyn (R-TX) are working on legislation that would limit the liabilities of health care workers, business owners, and employees from lawsuits pertaining to the COVID-19 outbreak. Leader McConnell emphasized that any future COVID-19 relief efforts must include these protections in order for the Senate to consider additional relief legislation.

  • House Democratic leadership appears open to negotiating a deal on liability protections. House Majority Leader Steny Hoyer (D-MD) emphasized that these protections must not undermine the health and rights of workers, but indicated that the issue is open for further discussion and negotiation.

  • Unemployment Reform. Senate Republicans are spearheading efforts on reforming the enhanced unemployment benefits so that generous payments approved in the CARES Act don’t become an obstacle to rehiring workers.

  • A key option on the table includes enhancing a tax credit that would give employers a tax break for keeping workers on the payroll.

  • State and Local Governments. Funding for state and local governments is a key pillar of the Democrats' next stimulus bill. While there is bipartisan agreement that more needs to be done to help stymie economic hardships for these entities, allocating additional funding has become a divisive issue within the Republican conference.

  • It appears likely that some Senate Republicans — particularly those who are up for re-election — would coalesce behind a bipartisan proposal that would provide additional funding and flexibility to address needs at the state and local level.

  • PPP. Following Congressional passage of the Paycheck Protection Program Flexibility Act, Lawmakers are eyeing further reforms to the PPP.

  • Prior to Senate passage of H.R. 7010, Sens. Ron Johnson (R-WI) and Mike Lee (R-UT) — who had expressed concerns and opposition to the House-passed bill secured a letter from key Small Business Committee members in both chambers clarifying that the intent of the legislation is not to reauthorize the program through the end of the year without additional reforms.

  • Small Business Committee Chairman Marco Rubio (R-FL) and Sen. Susan Collins (R-ME) have also indicated they are working on a technical change to the legislation that would ensure businesses can have their loans forgiven in some form regardless of whether they reach the 60 percent threshold.

  • Additionally, there has been a bipartisan push in Congress to expand PPP eligibility to 501(c)6 organizations and other currently ineligible nonprofits in the next round of COVID-19 relief legislation.

  • Surprise Billing. Reports out of the Trump administration suggest that the White House will push for action on surprise medical bills ahead of the next round of relief legislation.

  • During the CARES Act negotiations, Chairman Frank Pallone (D-NJ) and Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) were actively trying to tack their surprise billing legislation onto the package.

  • Budget Reform. A bipartisan group of House lawmakers penned a letter to Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) calling for provisions that address the federal debt and trust funds for Medicare and Social Security to be included in the next round of COVID-19 relief legislation.


COVID-19 Legislative & Regulatory Trackers


NEW TODAY…

— SBA, TREASURY REACH AGREEMENT ON PPP TRANSPARENCY. The Small Business Administration (SBA) and Treasury Department reached an agreement with Congress to disclose information regarding recipients of the Paycheck Protection Program (PPP). The names of businesses who received loans ranging from $150,000 to $10 million will be disclosed publicly by the federal government.

— SBA LAUNCHES TOOL TO CONNECT BUSINESSES WITH CDFIS AND SMALL ASSET LENDERS. SBA launched an online tool for small businesses and non-profits to be matched with Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), Farm Credit System lenders, Microlenders, as well as traditional smaller asset size lenders in the Paycheck Protection Program (PPP).

— CMS ANNOUNCES MEMBERSHIP OF INDEPENDENT CORONAVIRUS COMMISSION ON SAFETY AND QUALITY IN NURSING HOMES. The Centers for Medicare and Medicaid Services (CMS) announced the membership of the Independent Coronavirus Commission on Safety and Quality in Nursing Homes.

  • The Commission will conduct an assessment of the response to the COVID-19 pandemic in nursing homes and make recommendations on actions and best practices for immediate and future actions.

— HHS TO HOLD WEBINARS ON PROVIDER RELIEF FUND. The Department of Health and Human Services (HHS) will hold two webcasts this week for providers to learn more about the application process for the $15 billion Medicaid and CHIP targeted allotment.


RECENT DEVELOPMENTS…

— IRS ISSUES GUIDANCE ON CARES TELEHEALTH AND VIRTUAL CARE FLEXIBILITIES. The IRS recently outlined flexibilities and issued guidance addressing the CARES safe harbor provision allowing high deductible health plans (HDHPs) with health savings accounts (HSAs) to cover telehealth and remote care before a patient reaches their deductible. The temporary flexibility applies to services provided on or after Jan. 1, 2020, for plan years beginning on or before Dec. 31, 2021.

— SBA, TREASURY ANNOUNCE NEW AND REVISED FORGIVENESS APPLICATION FOR PPP. The SBA and Treasury Department posted a revised Paycheck Protection Program (PPP) forgiveness application as mandated by the PPP Flexibility Act.

  • SBA also published a new "EZ version" of the forgiveness application that applies to borrowers that: (1) are self-employed and have no employees; or (2) did not reduce the salaries or wages of their employees by more than 25 percent, nor the number of hours for their employees; or (3) experienced reductions in business activity as a result of of the pandemic, and did not reduce the salaries or wages of their employees by more than 25 percent.

— HOUSE CORONAVIRUS TASK FORCE LAUNCHES INVESTIGATION INTO COVID-19 DEATHS IN NURSING HOMES. The House Select Subcommittee on the Coronavirus Crisis officially launched an investigation into COVID-19 deaths in nursing homes. Click here to read the letter to the CMS.

— SEC ISSUES NEW WAIVER FOR MUNICIPAL ADVISERS. The Securities and Exchange Commission (SEC) published a temporary waiver for municipal advisers that will allow them to solicit banks and credit unions for direct placements of securities through the end of the year, citing economic disruption from the COVID-19 public health emergency.

— SBA REOPENS EIDL AND EIDL ADVANCE PROGRAM. The SBA announced that it has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19.

— FEDERAL RESERVE TO EXPAND MAIN STREET LENDING PROGRAM TO NONPROFITS. The Federal Reserve announced it will be seeking feedback on a proposal to expand the Main Street Lending Program for nonprofit organizations.

  • The proposal would make loans available to 501(c)(3) and 501(c)(19) organizations with 50 to 15,000 employees, but 501(c)(6)s and nonprofits with endowments larger than $3 billion would not be eligible under the program.

— FED SET TO BEGIN PURCHASING CORPORATE DEBT. In a move aimed at slashing borrowing costs and stymieing COVID-related economic hardships, the Federal Reserve announced plans to begin purchasing debt from corporations.

— FDA ENDS EMERGENCY USE FOR ANTI-MALARIA MEDICINES. The Food and Drug Administration (FDA) withdrew its emergency use authorizations for hydroxychloroquine and chloroquine as COVID-19 treatment options. In a separate warning, the agency cautioned that the use of the anti-malaria medications could blunt the effectiveness of the antiviral remdesivir.

— SBA, TREASURY ISSUE NEW GUIDANCE ON PPP FLEXIBILITY. Following the enactment of the Paycheck Protection Program Flexibility Act, the SBA and Treasury Department issued revised guidance for the PPP. Click to view the updated interim final rule, borrower application, and lender application.

— FED OPENS MAIN STREET LENDING PROGRAM FOR LENDER REGISTRATION. The Federal Reserve officially opened lender registration for its Main Street Lending Program. Click here to access the necessary registration documents.

— HHS ANNOUNCES $25 BILLION IN RELIEF FUNDING FOR MEDICAID PROVIDERS, SAFETY NET HOSPITALS. HHS announced the allocation of $25 billion from the Provider Relief Fund, including $15 billion for Medicaid and CHIP providers, as well as $10 billion for safety net hospitals. TRP's comprehensive analysis of the COVID-19 provider relief fund can be read here.

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