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COVID-19: Federal Update (7/14)

Quick Takes

— HOUSE LEADERSHIP UNVEILS END-OF-JULY SCHEDULE. Action on Appropriations, NDAA, and WRDA headline the lower chamber's agenda for the next two weeks.

— TRUMP TEAM EYES SCHOOL FUNDS BOOST IN NEXT VIRUS AID BILL. White House officials are advocating for a massive federal expenditure to make campuses safe as Congress compiles the next COVID-19 relief bill.

— GOP LAWMAKERS DELIBERATING COMPROMISE ON ENHANCED UNEMPLOYMENT BENEFITS. Lowering the $600 unemployment bonus to $200-$400 is under consideration.

Capitol Hill Update

— HOUSE LEADERSHIP UNVEILS END-OF-JULY SCHEDULE. House Democratic leadership outlined a two-week stretch of floor action to close out July ahead of the August District Work Period. In a "Dear Colleague" letter to Members yesterday, Majority Leader Steny Hoyer (D-MD) announced that the lower chamber will take up the House's version of the fiscal year (FY) 2021 National Defense Authorization Act (text; report; amendments) next Monday and Tuesday, as well as its first "minibus" package for FY 2021 — which will include the Agriculture-FDA, State-Foreign Operations, Military Construction-VA, and Interior-Environment spending bills. Leader Hoyer noted that he expects the House to continue its work on appropriations during the following week of Jul. 27 after the first package of bills clears the chamber. Lawmakers are also expected to take up: (1) a bill that would reauthorize the Water Resources Development Act (WRDA) (text; summary); (2) the Senate-passed Great American Outdoors Act; and (3) a pair of child-care related measures (H.R. 7027; H.R. 7327).

— APPROPRIATORS READY NEXT BATCH OF SPENDING BILLS. Members on the House Appropriations Committee are set to resume their full committee markups of fiscal year (FY) 2021 spending bills. After clearing the funding measures for Energy-Water Development (report) and Labor-HHS-Education (report) yesterday, the Committee is set to consider the Defense (report), Commerce-Justice-Science (CJS) (report), and Transportation-HUD (report) today. To close out the work week, appropriators will consider the bills for Homeland Security (report) and Financial Services and General Government (FSGG) (report) tomorrow.

Washington Insider: What We’re Reading

President Donald Trump’s push to reopen schools is being complicated by a split within his ranks over how to do it, with some advisers advocating for a massive federal expenditure to make campuses safe as Congress compiles the next COVID-19 relief bill. Senate Majority Leader Mitch McConnell, R-Ky., said Monday that schooling will be a priority in the coming package. Senate Democrats have proposed a $430 billion education stabilization plan. But the Republican leader has not said how much Congress is willing to spend, wary of high-dollar outlays that will run into resistance from GOP senators.

The Environmental Protection Agency (EPA) on Monday did not propose more ambitious standards for reducing smog despite pressure from environmental groups and even some courts that had urged the agency to set more restrictive regulations on the pollutant. The Monday proposal would retain the 70 part per billion (ppb) standard for ozone, commonly referred to as smog, set under the Obama administration. That standard has faced numerous lawsuits from environmental and health groups.

Rep. John Katko (R-N.Y.) on Monday introduced three pieces of legislation designed to improve cybersecurity at the national level, particularly within the Department of Homeland Security (DHS). The proposed bills would help bolster leadership at DHS's Cybersecurity and Infrastructure Security Agency (CISA), one of the key federal agencies involved in addressing cybersecurity threats. The CISA Director and Assistant Directors Act would elevate the position of CISA director and give the job a five-year term, along with reclassifying assistant director positions.

The United States budget deficit grew to a record $864 billion for June as the federal government pumped huge sums of money into the economy to prop up workers and businesses affected by the coronavirus, the Treasury Department said on Monday, an amount that is expected to grow as a surge in cases portends prolonged economic pain. The budget deficit, which had already reached almost $1 trillion in 2019, ballooned to nearly $3 trillion in the first nine months of the 2020 fiscal year and is expected to keep growing. The federal government, which has been shoveling cash out the door to fund unemployment benefits, small-business loans and direct financial support to families, is on pace to borrow more money, as a share of the economy, than it has at any time since World War II.

COVID-19: What We’re Hearing

— 'CARES 2.0' STATE OF PLAY. Senate Majority Leader Mitch McConnell (R-KY) provided more details on the GOP priorities for the next round of COVID-19 relief legislation in a sign that another bill could be on the horizon toward the end of this month. Leader McConnell stated that he will be unveiling legislation in the forthcoming weeks that prioritizes health care, jobs, reopening schools and universities, and liability protections. Treasury Secretary Steven Mnuchin noted last week that he expects negotiations between Senate Republicans, House Democrats, and the White House to begin in earnest when the upper chamber returns from its July 4 district work period the week of Jul. 20. However, it remains to be seen whether the parties can clinch a bipartisan agreement given the deep policy divides over the size and scope of the next round of relief. 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 stated that the GOP's liability provision would insulate stakeholders from lawsuits retroactive to Dec. 2019 through 2024, unless these entities are "grossly negligent or intentionally engaged in harmful behavior. He has continuously 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. Congressional Republicans have 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. Democrats, on the other hand, have emphasized that the enhanced unemployment insurance benefits must be a part of the next round of relief legislation.

    • Senate Republicans have expressed openness to lowering the unemployment boost from $600 to the $200-$400 range. Another compromise option could be enhancing a tax credit that would give employers a tax break for keeping workers on the payroll.

  • Health Care Priorities. Reports out of the Trump administration suggest that the White House is prioritizing action on surprise medical billing in the next round of relief legislation. It is also looking to address price transparency for pharmaceuticals, as well as an adjustment in the reimbursement rate for telemedicine.

    • 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.

  • Stimulus Payments. In a recent interview, President Trump expressed openness to another round of direct economic impact payments, saying that he wants “larger numbers than the Democrats” have offered. Leader McConnell has also expressed openness for another round of stimulus payments that would be targeted toward individuals making $40,000 a year or less.

  • PPP. The Paycheck Protection Program (PPP) application process has officially been reopened thanks to swift action by Congress. House and Senate lawmakers were able to clinch unanimous consent agreements on a bill that would reopen the application process for the roughly $134 billion remaining in the signature small business rescue program, pushing the application deadline from June 30 to August 18. lawmakers are already eyeing additional PPP reforms in the next round of COVID-19 relief legislation.

    • 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.

  • 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.

  • 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


— HHS ANNOUNCES NEW PROVIDER FUNDING ALLOCATION. The Department of Health and Human Services (HHS) announced $4 billion in additional COVID-19 relief funding for providers that serve a high number of Medicaid patients and provide large amounts of uncompensated care, including to rural populations. Click here to read TRP's analysis of this new funding tranche.

— CMS ALLOCATES ADDITIONAL RESOURCES FOR NURSING HOMES. The Centers for Medicare and Medicaid Services (CMS) announced plans to provide additional resources to nursing homes COVID-19 hotspots.

  • Specifically, the agency plans to deploy Quality Improvement Organizations (QIOs) across the country to provide immediate assistance to nursing homes in the hotspot areas as identified by the White House Coronavirus Task Force.

— HHS, HRSA AWARD NEW FUNDING FOR HEALTH CENTERS. HHS and the Health Resources and Services Administration (HRSA) awarded $21 million to support health centers' COVID-19 response efforts.

  • This includes $17 million to support 78 Health Center Program look-alikes (LALs) with funding to expand capacity for COVID-19 testing.

— TREASURY UPDATES CORONAVIRUS RELIEF FUND FAQS. The Treasury Department updated its list of frequently asked questions on the state, local, and tribal Coronavirus Relief Fund.

— NIH LAUNCHES NEW COVID-19 CLINICAL TRIALS NETWORK. The National Institutes of Health (NIH) has launched a new clinical trials network to test COVID-19 vaccines and other prevention tools.

— HRSA POSTS FACT SHEET ON PROVIDER RELIEF FUND FOR MEDICAID AND CHIP PROVIDERS. HRSA has published a new fact sheet for Medicaid and CHIP providers on the Provider Relief Fund.

— SBA, TREASURY OFFICIALLY DISCLOSE PPP RECIPIENTS. The Small Business Administration (SBA) and Treasury Department have officially disclosed the names of more than 650,000 recipients of the Paycheck Protection Program (PPP). Click here to access the database.

— TRUMP ADMINISTRATION ANNOUNCES NEW 'OPERATION WARP SPEED' INITIATIVES. HHS and Department of Defense announced two new investments into COVID-19 vaccines and treatments as a part of the Trump administration's "Operation Warp Speed" initiative. This includes a $450 million contract with Regeneron Pharmaceuticals to manufacture an investigational anti-viral antibody treatment, as well as a $1.6 billion deal with Novavax to ramp up production of a potential vaccine.

—TRP SPECIAL REPORT: THE VIABILITY OF DRUG PRICING REFORMS DURING THE COVID-19 PANDEMIC. TRP's newest Special Report examines recent legislation tackling drug pricing reform or price controls for COVID-19 therapies and vaccines, provides a state-of-play on the larger debate on the Hill and within the administration, and explores perspectives on ensuring the affordability of coronavirus-targeted products from the biopharmaceutical industry and health stakeholders.

— TRP SPECIAL REPORT: COVID-19 EMERGENCY DECLARATIONS AND HEALTH POLICY. TRP has published a Special Report describing 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.

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