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COVID-19: Federal Update (7/6)

Quick Takes

— HOUSE APPROPRIATIONS SUBCOMMITTEES BEGIN MARKUP BLITZ. Appropriators will look to mark up each of the lower chamber's FY 2021 spending bills over the course of the next three days.

— PPP APPLICATION PROCESS OFFICIALLY REOPENED. President Trump signed a bill that would push the application deadline to mid August.

— TRUMP ADMINISTRATION MOVES AHEAD WITH PLAN TO OPEN NEW PANDEMIC OFFICE AS CORONAVIRUS CRISIS INTENSIFIES. Officials are reviewing a path forward to create a new coordinator for pandemics position.

— FDA ISSUES NEW EMERGENCY USE AUTHORIZATION FOR COMBINED COVID-19 DIAGNOSTIC TEST. The test can detect COVID-19, as well as multiple flu strains.

Capitol Hill Update

— HOUSE APPROPRIATIONS SUBCOMMITTEES BEGIN MARKUP BLITZ. While there will be no votes in Congress this week, House lawmakers are set to ramp up their fiscal year (FY) 2021 appropriations work. Appropriations Subcommittees will begin three days' worth of markups to consider all 12 spending bills, starting with the measures for State-Foreign Operations, Agriculture-FDA, and Military Construction-VA this evening. In the Senate, the appropriations process has been stymied due to partisan disagreements over COVID-19 and police reform amendments. A clear timetable for action has yet to emerge, but Senate appropriators are mulling over the possibility of skipping subcommittee markups altogether to expedite the process. On the floor, the upper chamber will resume legislative business on Monday, July 20, while the lower chamber will receive 72-hours’ notice of any scheduled votes.

— PPP APPLICATION PROCESS OFFICIALLY REOPENED. The Paycheck Protection Program (PPP) application process has officially been reopened thanks to swift action by Congress last week. House and Senate lawmakers were able to clinch unanimous consent agreements on a bill that 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. President Donald Trump signed the bill into law over the weekend, and lawmakers are already eyeing additional PPP reforms in the next round of COVID-19 relief legislation.

Washington Insider: What We’re Reading

The National Security Council hosted an interagency meeting Thursday to discuss the plans for the office, which will fall under the leadership of a new position: coordinator for pandemics, a senior administration official said. The goal of Thursday's meeting was to flush out the details and establish a proposal for President Donald Trump to approve -- but the push to start a new office has drawn criticism from health experts and former officials, some of whom question whether this new unit is being located at the State Department, and not the NSC, simply to differentiate from the Obama administration effort. Officials who had worked on that pandemic response team -- the directorate for global health and security and bio-defense -- lamented the Trump administration's move to gut the office, a stance the White House contests, arguing it reassigned staff and streamlined bureaucracy.

The IRS and taxpayers face a number of obstacles before crossing the finish line in this year's longer-than-usual tax filing season. The coronavirus prompted the IRS in March to extend the deadline for individuals to file their 2019 returns, and pay their 2019 taxes, from April 15 to July 15. In addition to processing returns during that time, the agency also had to implement COVID-19 relief measures passed by Congress in the spring.

The two energy companies behind plans to build a natural gas pipeline spanning from West Virginia to North Carolina announced Sunday that the project was canceled, citing ongoing legal battles over the pipeline's construction. In a statement, Dominion Energy and Duke Energy pointed to a recent court decision in Montana ending the Army Corps. of Engineers' authority to issue utility line permits across wetlands and bodies of water as a sign of the continued legal troubles the project faced before completion. The project was slated to be completed in 2021, and had won a permit battle at the Supreme Court earlier this year.

The Supreme Court on Monday upheld a decades-old federal regulation that prohibits robocalls to cell phones, and expanded the ban to include government debt-collection calls.

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 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. 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.

COVID-19 Legislative & Regulatory Trackers


— FDA ISSUES NEW EMERGENCY USE AUTHORIZATION FOR COMBINED COVID-19 DIAGNOSTIC TEST. The Food and Drug Administration (FDA) issued an emergency use authorization for a diagnostic test that can detect COVID-19 and and multiple strains of influenza.

— HHS TO HOLD WEBINAR ON MEDICAID/CHIP DISTRIBUTION FROM PROVIDER RELIEF FUND. HHS will hold a webinar for providers to learn more about the Medicaid and CHIP Distribution from the Provider Relief fund on July 8. Applications are due by July 20, 2020.


— 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.

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