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COVID-19: Federal Update (8/18)


Quick Takes

— SENATE GOP POISED TO RELEASE 'SKINNY' COVID-19 RELIEF BILL. Senate Republicans are preparing to introduce a slimmed-down version of their HEALS Act legislation as pressure continues to mount on getting some form of COVID-19 relief legislation passed.

—POSTMASTER GENERAL DEJOY TO TESTIFY BEFORE SENATE PANEL FRIDAY. Mr. DeJoy is scheduled to testify before the Republican-led Senate Homeland Security and Governmental Affairs Committee.

— MNUCHIN SAYS HOPES PELOSI INTERESTED IN COVID-19 TALKS AMID POSTAL EFFORTS. President Donald Trump wants to move forward with more economic aid amid the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin said on Tuesday.

— 2020 DEMOCRATIC CONVENTION HEADS INTO SECOND DAY. Click here for details on today's events.


— UPDATED ANALYSIS OF THE PROVIDER RELIEF FUND. Click here to read TRP’s analysis of the distributions.


Capitol Hill Update

— SENATE GOP POISED TO RELEASE 'SKINNY' COVID-19 RELIEF BILL.Senate Republicans are preparing to introduce a slimmed-down version of their HEALS Act legislation as pressure continues to mount on getting a COVID-19 relief measure passed. The new GOP pandemic relief bill — which could get tacked onto a forthcoming stopgap funding measure at the end of September — is expected to include: (1) language on liability protections; (2) $10 billion for the U.S. Postal Service (USPS); (3) an extension of the pandemic unemployment insurance program at $300 per week through Dec. 27; and (4) funding for the Paycheck Protection Program (PPP), education, and testing. The bill comes as House lawmakers prepare to convene for a rare Saturday session to consider a bill that would provide $25 billion to USPS, while also prohibiting the Postal Service from implementing any changes to operations or level of service it had in place on Jan. 1, 2020. Reports out of Capitol Hill suggest that House Democratic leadership could also call up additional pandemic-related measures this weekend.


Washington Insider: What We're Reading

The Wall Street Journal: Postmaster General DeJoy to Testify Before Senate Panel Friday ($)

Postmaster General Louis DeJoy will appear before a Senate panel Friday as mail-delays and cost-cutting measures at the U.S. Postal Service have set off fears on Capitol Hill that the changes could affect the tally of an election expected to feature elevated levels of mail-in balloting. Mr. DeJoy is scheduled to testify before the Republican-led Senate Homeland Security and Governmental Affairs Committee, according to spokespeople for the panel. He is also set to appear before the House Oversight Committee, which is controlled by Democrats, next week.

Reuters: Mnuchin Says Hopes Pelosi Interested in COVID-19 Talks Amid Postal Efforts

President Donald Trump wants to move forward with more economic aid amid the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin said on Tuesday, adding that he hopes House Speaker Nancy Pelosi is open to further talks as lawmakers prepare to take up funding of the U.S. Postal Service. “Hopefully since Speaker Pelosi is coming back to look at postal, hopefully she’ll be more interested in sitting down,” Mnuchin told CNBC in an interview. Asked about the possibility of a narrower COVID-19 aid deal, Mnuchin said there was a need to help smaller businesses, adding: “The president would like us to move forward with this.”


The Hill: China: US Undermining Global Trade With Sanctions Against Huawei

China said Tuesday the Trump administration is undermining global trade with sanctions against telecommunications company Huawei. The Chinese foreign ministry reportedly demanded that U.S. officials “stop suppressing Chinese companies” in comments one day after the Commerce Department's Bureau of Industry and Security announced further steps to push against Huawei and blacklisted 38 Huawei affiliate groups. 


Associated Press: US Approves Oil, Gas Leasing Plan for Alaska Wildlife Refuge

The Trump administration gave final approval Monday for a contentious oil and gas leasing plan on the coastal plain of Alaska’s Arctic National Wildlife Refuge, where critics worry about the industry’s impact on polar bears, caribou and other wildlife. The next step, barring lawsuits, will be the actual sale of leases. Development — should it occur — is still years away.


2020 Elections State of Play

— 2020 DEMOCRATIC CONVENTION HEADS INTO SECOND DAY. The 2020 Democratic National Convention will resume later today and continue until Thursday, Aug. 20. Of note in today's program are meetings of the Democratic rural, seniors, small business, disability, and environment and climate crisis councils, followed by keynote speeches from Dr. Jill Biden, former President Bill Clinton, and former Secretary of State John Kerry. Click here for details on today's events.

— BIDEN TAPS HARRIS FOR 2020 RUNNING MATE. Former Vice President and 2020 Democratic Presidential nominee Joe Biden announced that he chose Sen. Kamala Harris (D-CA) to be his running mate this fall. The junior senator from California and former 2020 presidential candidate was long viewed as the front-runner to be Vice President Biden's choice by political insiders and forecasters, besting other rumored candidates including former U.N. Ambassador Susan Rice, Sen. Elizabeth Warren (D-MA), and Reps. Val Demings (D-FL) and Karen Bass (D-CA). Vice President Biden's historic choice also marks the first time a Black and Asian American woman has been added to a major party's presidential ticket in American history.

What policies has Sen. Harris championed during her time in the Senate and on the campaign trail? Check out TRP's analysis of the Democratic Vice Presidential nominee's health care and financial services policy platform.


TRUMP VS. BIDEN. With 81 days until the 2020 election, current polling projects a close, hard fought race for the White House in the fall 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.

  • RCP Aggregate: Biden +7.7 percent (source)

  • 538 Aggregate: Biden +8.4 percent (source)

  • PredictIt Market: Biden (57¢) Trump (45¢) (source)

  • Gallup POTUS Approval (8/12): 42 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. 


The 2020 Republican National Convention will take place next Monday, Aug. 24 through Thursday, Aug. 27. Click here for details.


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 +7.3 percent (source)

  • RCP Aggregate: Democrats +6.4 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

PANDEMIC EXECUTIVE ORDERS. With negotiations on the next round of COVID-19 relief legislation at a standstill, President Donald Trump issued a series of executive orders on pandemic-related priorities. The orders seek to restore the enhanced federal unemployment benefits at a rate lower than the CARES Act allocation, defer payroll taxes until early 2021, renew the moratorium on evictions, and continue deferring student loan payments and accrued interest under the CARES Act Statute. The executive actions do not touch on any health-specific priorities such as testing and treatment, nor does it address liability-related issues — leaving employers at-risk of litigation until a compromise deal is hammered out.

  • Context and Next Steps. The orders come as Congress and the White House remain gridlocked on the next round of pandemic relief aid, with no plans to resume the negotiations as of now. The two sides are very far apart on several provisions pertaining to the size and scope of the overall package, with the enhanced unemployment insurance benefits, additional aid for state and local governments, and liability protections standing out as the most contentious issues at play. However, the president’s ability to allocate and manage funding for COVID-19 relief efforts is complicated due to Article I, Section 9 of the Constitution, which gives Congress the “power of the purse.” As such, the effectiveness and standing of these executive orders is precarious as future legal action against the administration is expected.

Details on the orders include: 

  • Unemployment Insurance. This order seeks to extend the pandemic unemployment assistance (PUA) established by the CARES Act, lowering the weekly bonus from $600 to $400. The administration calls on states to front 25 percent of the cost — equivalent to $100 toward the weekly benefit — with the federal government covering the remaining 75 percent. To fund the revamped PUA, the White House outlined hundreds of billions in federal funding that the administration plans to “reprogram” in a manner similar to the way it has diverted Pentagon funding for wall construction on the U.S.-Mexico border. The president says he will tap into roughly $80 billion in unallocated money from the CARES Act State, Local, and Tribal Coronavirus Relief Fund, as well as more than $40 billion from the Federal Emergency Management’s (FEMA) Disaster Relief Fund, to fund these efforts.

  • Payroll Tax. This order directs the Treasury Department to allow employers to defer payment of employee-side Social Security payroll taxes through the end of 2020 for employees earning less than about $100,000 annually. While the text of the EO states that the intended deferral period would start Sept. 1, President Trump suggested that it could be retroactive to Aug. 1, saying that he hopes to forgive the deferred payroll taxes and make permanent payroll tax cuts if he is reelected in November. While the tax code does give the Treasury secretary authority to delay tax filing and collection amid presidentially-declared disasters, it remains to be seen whether employers will stop withholding payroll taxes given the risk of future liability. Critics of this particular order have also expressed concerns about the impact this action could have on both the short and long-term solvency of the Social Security and Medicare trust funds.

  • Housing. This EO outlines potential policy actions that federal agencies could take to address housing evictions during the balance of the pandemic, but does not offer an explicit pause on evictions. Specifically, the order instructs agencies to: (1) consider whether halting evictions will help stem the spread of COVID-19 across state lines; (2) identify available funds available to provide temporary financial assistance to renters and homeowners; (3) promote the ability of renters and homeowners to avoid eviction or foreclosure by encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures; and (4) review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners. Congressional Democrats reportedly agree that the president does have the authority to address housing evictions via executive order, but are unlikely to be satisfied with what they would consider to be the administration’s watered-down approach in this executive action.

  • Student Loans. This order directs the Department of Education to take the necessary steps to continue the CARES Act policy that temporarily pauses payments and waives interest on student loans held by the Department until Dec. 31. The EO does not, however, specifically reference student loan debt collection or counting non-payments toward public service loan forgiveness, both of which were included in the CARES Act. Additionally, the EO does not offer coverage for federal student loan borrowers whose debt is held by private lenders or their colleges — a priority that Congressional Democrats have sought in the COVID-19 relief talks.


— HEALS Act. Senate Republicans officially introduced their opening offer proposal for the next round of COVID-19 relief legislation following days of intraparty negotiations between GOP Senators and White House officials. The legislative package was officially released as multiple pieces of legislation, with six total sections:

Click here to view TRP's side-by-side of the Senate GOP HEALS Act and the House Democratic HEROES Act.


COVID-19 Legislative & Regulatory Trackers

NEW TODAY...

— UPDATED ANALYSIS OF THE PROVIDER RELIEF FUND. The Department of Health and Human Services (HHS) continues to make distributions under the $175 billion provider relief fund made possible by the CARES Act and successor legislation. Click here to read TRP’s analysis of the distributions.

  • Recently, the agency announced $1.4 billion in new funding for children’s hospitals and an extended deadline of August 28 for Medicaid, CHIP, and dental providers to apply for relief.

  • Furthermore, the agency reopened applications for one of the initial tranches of funding, allowing providers who missed the first opportunity or were ineligible to seek CARES Act funds.

— TRUMP ADMINISTRATION ANNOUNCES 'WARP SPEED' COLLABORATION WITH MCKESSON ON VACCINE DISTRIBUTION. HHS and the Department of Defense (DoD) announced a new "Operation Warp Speed" collaboration with McKesson Corporation that would make the company a central distributor of future COVID-19 vaccines and related supplies. 


RECENT DEVELOPMENTS...

HHS SENDS NEW PROVIDER RELIEF FUNDS TO CHILDREN'S HOSPITALS. The Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced $1.4 billion in provider relief funding to dozens of free-standing children’s hospitals nationwide. 

SAMHSA RESPONDS TO NEW CDC DATA ON MENTAL HEALTH, SUD, AND SUICIDAL IDEATION DURING COVID-19. In response to the Centers for Disease Control and Prevention (CDC) data addressing the mental health challenges associated with COVID-19, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a statement calling on local and state officials to consider all aspects of health and not just virus containment. 

FDA APPROVES EMERGENCY USE FOR SALIVA-BASED COVID-19 TEST. The Food and Drug Administration (FDA) issued an emergency use authorization (EUA) to Yale School of Public Health for its SalivaDirect COVID-19 diagnostic test, which uses a new method of processing saliva samples when testing for COVID-19.

— HHS ANNOUNCES NEW INVESTMENTS IN DIAGNOSTIC LAB CAPACITY FOR COVID-19 TESTING. HHS announced combined investments of $6.5 million in two commercial diagnostic laboratories to expand capacity to conduct up to 4 million additional COVID-19 tests per month.


— SBA, TREASURY ISSUE NEW PPP-RELATED DOCUMENTS. The Small Business Administration (SBA) and Treasury Department have issued a slew of documents pertaining to the Paycheck Protection Program. This includes an interim final rule on appeals of SBA loan review decisions, as well as frequently asked questions on loan forgiveness and the program in its entirety.

— FEDERAL RESERVE LOWERS RATES FOR MUNICIPAL LENDING FACILITY. The Federal Reserve announced yesterday that it will reduce its pricing rates for cities and states seeking short-term loans from the Municipal Lending Facility.


— TRUMP ADMINISTRATION ANNOUNCES 'WARP SPEED' AGREEMENT WITH MODERNA. HHS and The Department of Defense (DoD) announced an "Operation Warp Speed" agreement with Moderna to manufacture and deliver 100 million doses of the company’s COVID-19 vaccine candidate.

— USDA EXPANDS ELIGIBILITY FOR CORONAVIRUS FOOD ASSISTANCE PROGRAM. The U.S. Department of Agriculture announced yesterday that it has expanded eligibility for additional commodities under the agency's Coronavirus Food Assistance Program (CFAP). The Department is also extending the deadline to apply for the program to Sept. 11.

— TREASURY UPDATES STATE AND LOCAL CORONAVIRUS RELIEF FUND FAQS. On Aug. 10, the Treasury Department updated its list of frequently asked questions on the state and local Coronavirus Relief Fund. The new questions pertain to the President's new executive order on unemployment insurance, as well as loan programs to support businesses.


— HHS ANNOUNCES JULY-DECEMBER COVID-19 STATE TESTING PLANS. HHS announced that the agency posted its state COVID-19 testing plans for July-December.

  • Each state plan is required to include details of critical parameters for state testing strategies, including target numbers of tests per month, as outlined in the Centers for Disease Control and Prevention's (CDC's) Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) guidance.

— HHS REOPENS APPLICATION PROCESS FOR CERTAIN PROVIDER RELIEF FUNDS. HHS announced the reopening of an application process to allow certain Medicare providers another opportunity to receive additional Provider Relief Fund payments.

  • Providers must submit their application by August 28, 2020, which aligns with the extended deadline for other eligible providers, such as Medicaid, Medicaid managed care, CHIP, and dental providers.

— TRP MEMO: POST-CORONAVIRUS TELEHEALTH EXPANSION LEGISLATION. Over the past weeks, four groups of lawmakers in the House and Senate have introduced legislation aimed at making permanent some of the emergency Medicare telehealth flexibilities implemented in response to the COVID-19 pandemic. Click here to read TRP's comprehensive memo on these legislative efforts.


— HHS ANNOUNCES PLAN TO LINK PROVIDER RELIEF FUNDS TO NURSING HOME PERFORMANCE. HHS announced the details of the $5 billion nursing home Provider Relief Fund (PRF) distribution, which was first announced in July.

  • This distribution will provide approximately $2.5 billion in upfront funding to support increased testing, staffing, and PPE needs in mid-August. There will also be funding available for those establishing COVID isolation facilities. The balance of the $5 billion will be linked to nursing home performance.

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