COVID-19: Federal Update (7/2)
— CONGRESS MOVES TO REOPEN PPP APPLICATION PROCESS. The Paycheck Protection Program (PPP) application process is on the verge of being reopened thanks to swift action by Congress over the course of the past two days.
— U.S. JOBLESS RATE FELL TO 11.1 % IN JUNE. The jobless rate fell to 11.1% in June as the U.S. regained 4.8 million jobs, but a recent coronavirus spike could hamper the labor market’s recovery.
— TRUMP SIGNALS OPENNESS TO ANOTHER ROUND OF STIMULUS PAYMENTS. The president said he wants “larger numbers than the Democrats” have offered in an interview yesterday.
— FDIC, FEDERAL RESERVE TO REQUIRE COVID-RELATED ADDS TO BANK LIVING WILLS. Large financial institutions will need to provide details on how they’ve incorporated lessons from the COVID-19 pandemic into their plan for unwinding in the event of bankruptcy.
Capitol Hill Update
— CONGRESS MOVES TO REOPEN PPP APPLICATION PROCESS. The Paycheck Protection Program (PPP) application process is on the verge of being reopened thanks to swift action by Congress over the course of the past two days. Following passage (233-188) of the House Democrats' $1.5T infrastructure package, the lower chamber cleared a bill that would push the application deadline for the Paycheck Protection Program (PPP) to Aug. 8 by voice vote yesterday. The deadline to apply for PPP funding was Jun. 30, but House and Senate lawmakers were able to clinch a unanimous consent agreements that would reopen the application process for the roughly $134 billion remaining in the signature small business rescue program. The measure is now on President Donald Trump's desk awaiting signature.
— SENATE RESUMES NDAA DEBATE; FINAL VOTE EXPECTED AFTER JULY 4. Senators will convene today to resume consideration of the upper chamber's FY 2021 NDAA (text; summary; report; tables). Final passage of the $740 billion measure is likely to occur when the Senate returns from its July 4 break, as Senators are continuing to deliberate a path forward on additional amendments and full consideration of the underlying bill. Meanwhile, House lawmakers on the Armed Services Committee approved the lower chamber's version of the NDAA during their marathon markup yesterday.
Washington Insider: What We’re Reading
The Wall Street Journal: U.S. Jobless Rate Fell to 11.1% in June ($)
The jobless rate fell to 11.1% in June as the U.S. regained 4.8 million jobs, but a recent coronavirus spike could hamper the labor market’s recovery. Job growth in June followed May’s payroll gain of 2.7 million and showed Americans are slowly getting back to work. But the U.S. labor market is operating with millions fewer jobs than in February, the month before the coronavirus pandemic struck the U.S. economy.
Politico: Big Tech CEOs Agree to Testify for House Antitrust Probe
The CEOs of tech giants Amazon, Apple, Google and Facebook have agreed to testify before the House Judiciary Committee as part of its investigation into possible anti-competitive conduct in the online marketplace, a panel spokesperson confirmed to POLITICO on Wednesday. The news sets up a must-watch hearing that will give lawmakers the chance to grill four of the technology industry's wealthiest, most powerful moguls on allegations that their companies have stifled competition, to the detriment of their users and American society.
The Hill: New Report Underscores Racial Prejudices in Superfund Sites
A new report by the Shriver Center on Poverty Law highlights the disproportionate manner in which Superfund sites – home to the country’s most hazardous waste – affect low-income people of color in the U.S. The report, released Tuesday, underscores what the Environmental Protection Agency and the Department of Housing and Urban Development signaled in 2017: 70 percent of the country’s Superfund sites listed on the National Priorities List are located within a mile of government-assisted housing. As a result, over 1,000 federally assisted housing buildings, an estimated 77,000 people, live within a mile of a Superfund site.
The Hill: Economists Warn New COVID-19 Surge May Kneecap Recovery
The June jobs report may be the last piece of good news for the economy this summer as surging coronavirus cases threaten to dampen the burgeoning recovery. Two consecutive months of employment growth following the loss of 21 million jobs would be a welcome sign for the U.S. as it navigates the worst downturn since the Great Depression. But economists warn that the June report may paint a misleading picture of a fragile economy as surging COVID-19 cases cut into the ground gained since the depression started in February.
COVID-19: What We’re Hearing
— 'CARES 2.0' STATE OF PLAY. At his weekly press conference, 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:
Stimulus Payments. In an interview yesterday, President Trump expressed openness to another round of direct economic impact payments, saying that he wants “larger numbers than the Democrats” have offered. While the President and Congressional Democrats largely agree on the need for another round of stimulus checks, it remains to be seen whether GOP lawmakers coalesce around this given the improving jobs numbers for the months of May and June.
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 next week.
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
— FDIC, FEDERAL RESERVE TO REQUIRE COVID-RELATED ADDS TO BANK LIVING WILLS. The Federal Deposit Insurance Corporation (FDIC) and Federal Reserve announced new requirements for large financial institutions to provide details on how they’ve incorporated lessons from the COVID-19 pandemic into their plan for unwinding in the event of bankruptcy.
— 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) this week 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.
— FED ISSUES NEW TERM SHEET FOR PMCCF. The Federal Reserve issued a new term sheet outlining pricing information for the Primary Market Corporate Credit Facility.
— 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.