COVID-19: Federal Update (7/1)
USMCA Goes Into Effect
Today the United States-Mexico-Canada Agreement goes into effect. This is an incredibly important piece of legislation for our region. The North Texas Commission worked hard on this to ensure that more than 200,000 North Texas jobs that rely on trade with Canada and Mexico were protected. As there is still much work to be done as federal agencies implement this legislation, we will continue to make the roll-out of this agreement a top priority.
— SENATE PASSES BILL EXTENDING PPP APPLICATION DEADLINE. Senators were able to clinch the unanimous consent agreement that would reopen the PPP application process.
— MCCONNELL: 'JOBS, KIDS, HEALTH CARE' WILL BE PRIORITIZED IN NEXT ROUND OF COVID-19 RELIEF. The Majority Leader is eyeing action on the next round of relief legislation some time toward the end of this month into early August.
— USMCA FORMALLY TAKES EFFECT BUT NORTH AMERICAN TRADE TENSIONS REMAIN. The culmination of years of negotiations won’t necessarily mean the end of trade tensions among the three North American nations.
— OMB PUBLISHES SPRING UNIFIED REGULATORY AGENDA FOLLOWING PANDEMIC DELAY. Click here to read TRP's analysis on forthcoming rules from the Department of Health and Human Services (HHS).
Capitol Hill Update
— SENATE PASSES BILL EXTENDING PPP APPLICATION DEADLINE. In a surprise move late yesterday, Senators passed a bill that would push the application deadline for the Paycheck Protection Program (PPP) to Aug. 8. The deadline to apply for PPP funding was yesterday, but Senators were able to clinch a unanimous consent agreement that would reopen the application process for the roughly $134 billion remaining in the signature small business rescue program. The bill now heads to the House, where lawmakers will need to either take it up under suspension of the rules or try to pass by voice vote in order to place the bill on President Donald Trump's desk. As of now, it is not clear what path the lower chamber will take prior to adjourning for the July 4 district work period.
— HOUSE WRAPS UP WORK ON $1.5T INFRASTRUCTURE PACKAGE. House lawmakers will convene for legislative business today to finish consideration of a 10-year, $1.5 trillion package of infrastructure legislation (text; summary; fact sheet) prior to adjourning for the July 4 district work period. The wide-ranging, ambitious package would allocate funding to address several key areas including surface transportation, schools and child care facilities, hospital and health care infrastructure, drinking water, housing, broadband, and green energy. It would also look to promote and expand bond financing tools to help state and local governments raise money to address their own projects. The legislation is likely to pass the lower chamber along party lines today but is considered dead on arrival in the GOP-controlled Senate after the White House issued a veto threat earlier this week. However, with the current surface transportation law set to expire on Sept. 30, officials will likely look to reach a compromise that reflects bipartisan priorities in the House and Senate surface transportation reauthorization measures.
— SENATE RESUMES NDAA AMENDMENT DEBATE. The Senate has convened this morning to resume consideration of amendments to the upper chamber's FY 2021 NDAA (text; summary; report; tables). A timeline for final passage of the $740 billion measure remains unclear as of now, as debate on certain amendments— particularly related to renaming bases that honor Confederate military leaders — could push the vote later into the month. President Trump threatened to veto the legislation if it included this particular amendment, setting up a potential standoff between the executive and legislative branches on the annual defense spending bill. Meanwhile, House lawmakers on the Armed Services Committee will meet to markup the lower chamber's version of the NDAA today.
Washington Insider: What We’re Reading
The U.S.-Mexico-Canada Agreement kicks in Wednesday, but the culmination of years of negotiations won’t necessarily mean the end of trade tensions among the three North American nations. Even as the deal formally takes effect, contentious issues that prolonged the negotiations are re-emerging as sore spots—including U.S. tariffs on metals, Mexico’s labor standards, Canada’s protection of its dairy market and new rules on automotive production.
The Environmental Protection Agency (EPA) will rescind its controversial policy allowing companies to skip monitoring their pollution by the end of the summer, the agency wrote in a letter to lawmakers. The policy, unveiled in a March 26 memo in an effort to help companies reduce regulatory burdens during the coronavirus, alerted companies they would not face penalties for failing to monitor their pollution emissions as required under a host of environmental laws. EPA said it would terminate the policy August 31, bringing to a close a directive that was previously listed as temporary but with no set end date.
The government is offering to lend up to $600 billion to help small and midsize businesses weather the coronavirus-induced recession, but so far interest has been sparse. Under the Main Street Lending Program, commercial banks lend to companies and then sell all but a small portion of each loan to the Federal Reserve. The Treasury Department stands ready to cover the Fed’s losses if companies fail to repay. The central concern: Companies in dire need of cash aren’t likely to be approved, while more creditworthy borrowers are likely to find similar or better terms on their own.
The Federal Communications Commission (FCC) on Tuesday formally designated Chinese telecommunications groups Huawei and ZTE as national security threats, blocking them from accessing FCC funds. The move was the formalization of a unanimous decision by the FCC in November to ban U.S. telecom groups from using the FCC’s $8.3 billion Universal Service Fund to purchase equipment from companies deemed threats. Both Huawei and ZTE were identified as national security threats in November, with the FCC’s Public Safety and Homeland Security Bureau formalizing this process Tuesday.
COVID-19: What We’re Hearing
— 'CARES 2.0' STATE OF PLAY. At his weekly press conference yesterday, Senate Majority Leader Mitch McConnell (R-KY) indicated that GOP lawmakers have started to formulate priorities for the next round of COVID-19 relief legislation. Leader McConnell noted that "kids, jobs, and health care" are the three primary areas of focus for Senate Republicans as they begin to formulate a package, saying that the upper chamber could take up a package between Jul. 20-Aug. 8. Meanwhile, Treasury Secretary Steven Mnuchin stated at a House Financial Services hearing yesterday that Congress should pass economic stimulus legislation that focuses on industries that have been particularly hard hit. As the public health emergency continues to unfold, lawmakers are mulling over several policy options for the next round of legislation, including:
PPP. Following Congressional passage of the Paycheck Protection Program Flexibility Act, Lawmakers are eyeing further reforms to the PPP.
Small Business Committee Chairman Marco Rubio (R-FL) is drafting additional PPP legislation that would create new programs to expand the use of the remaining funds within the program, including a $25 billion set-aside for businesses with fewer than 10 employees.
Ranking Member Ben Cardin (D-MD) and Sen. Jeanne Shaheen (D-NH) have introduced a bill that would extend the PPP application deadline by six months and authorize new lending for businesses with fewer than 100 employees.
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.
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.
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.
— 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.
COVID-19 Legislative & Regulatory Trackers
— OMB PUBLISHES SPRING UNIFIED REGULATORY AGENDA FOLLOWING PANDEMIC DELAY. The Office of Management and Budget (OMB) released its Spring 2020 Unified Agenda of Regulatory and Deregulatory Actions (Unified Agenda) (OMB Page, HHS Agenda) yesterday following a lengthy delay due to the COVID-19 pandemic. Click here to read TRP's analysis on forthcoming rules from the Department of Health and Human Services (HHS).
— FDA RELEASES GUIDANCE ON COVID-19 VACCINE AUTHORIZATIONS. The Food and Drug Administration (FDA) issued new guidance describing its expectations for potential COVID-19 vaccines that would be necessary to meet to receive approval. The agency describes acceptable primary and secondary endpoints for clinical trials, encourages standardization across clinical trials, and sets 50 percent efficacy as a primary endpoint. Efficacy may mean either preventing infection or preventing symptoms.
In addition, FDA raises the possibility of using so-called “challenge trials,” or deliberately exposing human subjects to infection, if it is not possible to demonstrate effectiveness through clinical disease endpoint efficacy studies. This guidance comes as stakeholders raise concerns about whether the public will trust a vaccine that has been rapidly developed to combat COVID-19.
— CMS UPDATES MEDICAID FAQS. The Centers for Medicare and Medicaid Services (CMS) published a document addressing COVID-related questions from states and Medicaid stakeholders. The new frequently asked questions cover a broad range of topics, including financing changes and rate adjustments impacting providers, the optional COVID-19 testing group, and coverage of COVID-19 drugs and services among others.
— TRP SPECIAL REPORT: COVID-19 EMERGENCY DECLARATIONS AND HEALTH POLICY. TRP's newest Special Report describes how emergencies are declared, how they end, the health-related flexibilities that were enabled by the declarations, and what will happen when the emergencies expire.
—TREASURY UPDATES CORONAVIRUS RELIEF FUND FAQS. The Treasury Department recently updated its list of frequently asked questions for the state, local, and tribal Coronavirus Relief Fund. New information includes non-federal match requirements under the Stafford Act, nonprofit eligibility, and flexibility on covering costs of public health and public safety employees.
— HHS SECURES NEW SUPPLY OF KEY COVID-19 TREATMENT. HHS announced an agreement to secure more than 500,000 doses of the antiviral Remdesivir for U.S. hospitals from Gilead Sciences through September.
— FEDERAL RESERVE PUBLISHES STRESS TEST, COVID-19 SENSITIVITY RESULTS. The Federal Reserve published results of its stress tests for 2020 and additional sensitivity analyses that the Board conducted in light of the COVID-19 pandemic.
— CMS ISSUES SPECIAL TRENDS REPORT ON HEALTHCARE.GOV SIGNUPS DURING COVID-19. CMS published a special trends report outlining the number of individuals who signed up for coverage on HealthCare.gov through a special enrollment period (SEP) during the pandemic.
— CMS TO END BLANKET WAIVER REQUIRING NURSING HOMES TO SUBMIT STAFFING DATA. CMS announced plans to end the emergency blanket waiver requiring all nursing homes to resume submitting staffing data through the Payroll-Based Journal (PBJ) system by August 14, 2020.
— HHS LAUNCHES PROGRAM AIMED AT FIGHTING COVID-19 IN MINORITY, RURAL COMMUNITIES. HHS announced a new three-year, $40 million program with the Morehouse School of Medicine to deliver COVID-19 information to minority and rural communities in an effort to combat the pandemic in these areas.
— CFPB ISSUES INTERIM FINAL RULE ON LOSS MITIGATION OPTIONS FOR HOMEOWNERS. The Consumer Financial Protection Bureau (CFPB) issued an interim final rule that will allow borrowers who have experienced financial hardships due to COVID-19 to delay payments even if they have only a limited amount of information on the homeowner.
— NEW FED EXAMINER GUIDANCE SEEKS TO PROMOTE FLEXIBILITY. The Federal Reserve issued new examiner guidance that seeks to promote consistency and flexibility in the supervision and examination of financial institutions that have been affected by the COVID-19 pandemic.
— CMS RELEASES COVID-19 DATA, ISSUES CALL TO ACTION ON VALUE-BASED CARE. CMS released new data on the COVID-19 outbreak that highlights racial and socioeconomic divides among Medicare beneficiaries who were infected. As a result of this data, the agency is calling for a renewed national commitment to value-based care.
— 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).
— 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.