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COVID-19: Federal Update (7/20)

Quick Takes

— LAWMAKERS CLOSE OUT JULY WITH FLURRY OF LEGISLATIVE ACTIVITY. House and Senate lawmakers will kick off this two-week stretch with consideration of their respective versions of the NDAA.

— 'CARES 2.0' NEGOTIATIONS SET TO BEGIN IN EARNEST AS OFFICIALS LOOK FOR DEAL. Officials are set to begin negotiations on another round of COVID-19 relief legislation as Senate Republicans ready their opening offer proposal for introduction later in the week.

— GOP LEADERS HEAD TO WHITE HOUSE AS VIRUS CRISIS DEEPENS. Top Republicans in Congress are expected to meet Monday with President Donald Trump at the White House on the next COVID-19 aid package as the crisis many hoped would have improved has dramatically worsened.

— HHS ANNOUNCES DISTRIBUTION OF $10B FOR HIGHLY IMPACTED HOSPITALS. Click here to read TRP's updated provider relief fund memo.

Capitol Hill Update

— LAWMAKERS CLOSE OUT JULY WITH FLURRY OF LEGISLATIVE ACTIVITY. House and Senate lawmakers will return to action today to begin a two-week legislative blitz to close out the month of July before leaving for the August district work period. On the floor, each chamber will pick up consideration of their respective versions of the National Defense Authorization Act (NDAA) to kick off this stretch of legislative activity. Both chambers are expected to pass the annual defense spending bill prior to the end of the week, and will move onto a Conference Committee to iron out a final deal, where they will need to resolve several key differences related to changing the name of military bases named after Confederate leaders, the transfer of excess military equipment to law enforcement agencies, and limiting Executive Branch war power authority, among other things. In addition to the NDAA, House lawmakers will take up the chamber's first "minibus" package for fiscal year (FY) 2021 — which includes Agriculture-FDA, State-Foreign Operations, Military Construction-VA, and Interior-Environment spending bills.

— 'CARES 2.0' NEGOTIATIONS BEGIN IN EARNEST AS OFFICIALS LOOK FOR DEAL. Officials are set to begin negotiations on another round of COVID-19 relief legislation as Senate Republicans ready their opening offer proposal for introduction later in the week. Majority Leader Mitch McConnell's (R-KY) forthcoming proposal is expected to focus on health care, jobs, reopening schools and universities, and liability protections. While lawmakers on both sides of the aisle have expressed a willingness to get something done on the next relief package, 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 COVID-19 bill.

COVID-19 Relief Legislation: Potential Areas of Agreement

— SENATE GOP OUTLINES LIABILITY PROPOSAL. In a draft summary of the liability section obtained by TRP, the Senate GOP's proposal would insulate health care, education, government, and business entities from lawsuits retroactive to December 2019 through 2024 unless there is proof of "gross negligence and intentional misconduct." For personal liability and medical cases, the plan would require a "clear-and-convincing-evidence burden of proof," would place a cap threshold on damages, and would heighten pleading standards. It would also limit liability for new products, such as types of PPE, if they meet established Food and Drug Administration (FDA) standards. While these policies are subject to future negotiation and change, Leader McConnell has continuously emphasized that any future COVID-19 relief efforts must include these protections in order for the Senate to consider additional relief legislation.

Washington Insider: What We're Reading

Top Republicans in Congress are expected to meet Monday with President Donald Trump at the White House on the next COVID-19 aid package as the crisis many hoped would have improved has dramatically worsened, just as emergency relief is expiring. New divisions between the Senate GOP majority and the White House posed fresh challenges. Senate Majority Leader Mitch McConnell was prepared to roll out the $1 trillion package in a matter of days. But the administration panned more virus testing money and interjected other priorities that could complicate quick passage.

Some 25 million Americans are set to lose $600 a week each in federal unemployment benefits at the end of the month, one of the thorniest issues Congress faces when it returns to Washington this week to consider another coronavirus relief bill. Many people view the payments as a lifeline, and analysts say the $15 billion a week in federal spending has provided vital support to an economy staggering from the effects of the pandemic. But critics say the money, paid on top of regular state jobless benefits, discourages some Americans from returning to work as businesses try to reopen, holding back the recovery.

A federal judge on Friday upheld a California program that caps carbon emissions from the transportation sector after the Trump administration sued the state over it. The Justice Department last year challenged the cap-and-trade program, which aims to improve air quality and allows companies in the state to trade emissions credits with others in Quebec. The federal government argued that California exceeded the role of the states and intruded on the federal government’s foreign policy authority, particularly its withdrawal from the Paris Agreement.

The U.S. is facing significant long-term economic damage from the coronavirus as lawmakers spar over boosted unemployment benefits amid stubbornly high weekly jobless claims. More than 1 million Americans have filed new claims for unemployment benefits each week for the past four months. Those figures provide a grim backdrop to the fight unfolding in Washington over whether to extend enhanced unemployment insurance for millions of job-seekers.

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. Click here to view TRP's newest slide deck on the 2020 election outlook.

· RCP Aggregate: Biden +8.6 percent (source)

· 538 Aggregate: Biden +8.8 percent (source)

· PredictIt Market: Biden (62¢) Trump (39¢) (source)

· Gallup POTUS Approval (6/30): 38 percent (source)

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

—SENATE OUTLOOK. The Senate currently features a 53-47 Republican majority. With 23 out of the 35 seats up this cycle held by Republicans, Democrats are statistically well-positioned to narrow or even flip the Senate GOP Majority. According to current political forecasts, the seat most likely to flip this fall is Alabama’s, held by Sen. Doug Jones (D-AL). If that happens, Democrats need to win four GOP-held Senate seats to reach a 50-50 tie, in which case control would rest with the president’s party. As of today, there is a widespread consensus that there are four races that may effectively decide the majority: Arizona, Colorado, Maine, and North Carolina are the seats that Democrats see as their best chance of flipping. However, Democrats are also eyeing seats in Georgia, Iowa, Montana, Texas, and Kansas as potential long-shot flips.

HOUSE OUTLOOK. Democrats are currently favored to keep their House majority, and have maintained a consistent lead in generic ballot polling since 2018, according to polls aggregated by RCP and 538. While Republicans could end up flipping some of the 30 Democratic districts that voted for President Trump in 2016, redistricting in North Carolina — as well as the retirements of Republican lawmakers in tossup districts in Texas, Georgia, and Iowa — leaves the GOP with a slim margin of error in their push to trim or flip the House Democratic majority.

· 538 Aggregate: Democrats +8.3 percent (source)

· RCP Aggregate: Democrats +8.5 percent (source)

Which lawmakers will not be returning for the next Congress? Stay informed and get ahead of the game on the changing landscape in Washington with the TRP Congressional Casualty List.

COVID-19: What We're Hearing

— 'CARES 2.0' STATE OF PLAY. Lawmakers are mulling over several policy options for the next round of legislation, including:

  • Education. Reports suggest that the GOP's bill will also contain $50-$100 billion in education funding, and could either be attached with conditions or incentives for schools to develop concrete reopening plans in the fall.

  • Health Care Priorities. One of the key areas of bipartisan agreement among the negotiating parties is the need to address existing and emerging health care needs as a result of the pandemic, as well as shoring up the nation's testing regime. These priorities are expected to be reflected in the Senate GOP's forthcoming proposal, and are also reflected in the House-passed HEROES Act.

    • 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. However, the administration has reportedly pushed back on additional funding for testing, tracing, and Centers for Disease Control and Prevention (CDC).

  • Payroll Tax Cut. The Trump administration emphasized that the next COVID-19 relief bill must include a payroll tax cut in order for it to earn the president's signature. While this has been a priority for President Trump throughout the pandemic response efforts. the proposal has received a chilly reception from Members on both sides of the aisle and is not likely to be included in a final deal.

  • Unemployment Reform. Congressional Republicans have spearheaded 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.

  • Stimulus Payments. President Trump stated recently that he is open 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 DISTRIBUTION OF $10B FOR HIGHLY IMPACTED HOSPITALS. On Friday, the Department of Health and Human Services (HHS) announced that it would distribute $10B to hospitals in COVID-19 hotspots beginning this week. Click here to read TRP's updated provider relief fund memo.

  • This distribution, which was first announced June 8, is based on data that HHS collected from hospitals in June detailing COVID-19 admissions through June 10. In addition, the agency extended the deadline for Medicaid and CHIP providers to apply for relief funds from June 20 to August 3.

— FDA APPROVES FIRST GROUP COVID-19 TEST. The Food and Drug Administration (FDA) issued an emergency use authorization for pooled COVID-19 testing. The Quest Diagnostic test is the first COVID-19 diagnostic test to be authorized for use with pooled samples.


— FED EXPANDS MAIN STREET LENDING PROGRAM TO INCLUDE NONPROFITS. The Federal Reserve announced that it will expend its Main Street Lending Program to provide greater access to credit for nonprofit organizations such as educational institutions, hospitals, and social service organizations.

— CFPB PUBLISHES REPORT ON COVID-RELATED CONSUMER COMPLAINTS. The Consumer Financial Protection Bureau (CFPB) published an analysis of the more than 8,000 complaints it received from January through May that specifically pertain to the COVID-19 pandemic.

— FED EXTENDS PPP-RELATED RULE CHANGE. The Federal Reserve announced an extension of a rule change aimed at bolstering the effectiveness of the Small Business Administration's (SBA) Paycheck Protection Program (PPP). The extension will temporarily modify the Board's rules so that certain bank directors and shareholders can apply to their banks for PPP loans for their small businesses.

— CMS PUBLISHES OVERVIEW OF TELEHEALTH UTILIZATION. In a blog post in the Journal Health Affairs, CMS Administrator Verma provides an overview of CMS’ analysis of telehealth utilization among Medicare beneficiaries during the pandemic.

— HHS CHANGES PROCESS FOR HOSPITALS TO REPORT COVID-19 DATA. The Department of Health and Human Services (HHS) announced changes to its process for collecting daily COVID-19-related data from hospitals, starting today. HHS plans to use this data to inform decisions at the federal level, such as allocation of supplies, treatments, and other resources.

— TRP SPECIAL REPORT: THE PROVIDER RELIEF FUND AND ITS DISTRIBUTIONS. On Jul. 10, 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 updated analysis on the provider relief fund and its distributions.

CMS EXTENDS COMPLIANCE DEADLINE FOR MEDICAID HCBS SETTINGS RULE. The Centers for Medicare & Medicaid Services (CMS) announced it was extending the deadline to March 17, 2023, for ensuring compliance with the Home and Community-Based Settings Regulation, in response to the COVID-19 pandemic.

— CMS ALLOCATES ADDITIONAL RESOURCES FOR NURSING HOMES. 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 PLANS TO DISTRIBUTE RAPID POC TESTING EQUIPMENT TO NURSING HOMES.HHS announced a large-scale procurement of U.S. Food and Drug Administration (FDA) -authorized rapid point-of-care diagnostic test instruments and tests to be distributed to nursing homes in COVID-19 hotspot geographic areas.

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