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COVID-19: Federal Update (8/19)


Quick Takes

— CONGRESS PIVOTS TOWARD SMALLER COVID-19 RELIEF DEAL. While the two sides still remain far apart on their priorities, there appears to be willingness on both sides to restart talks with the goal of passing some form of relief.

— POSTAL SERVICE HALTS SOME CHANGES AMID OUTCRY, LAWSUITS. Postmaster General Louis DeJoy said he would “suspend” several of his initiatives until after the election.

— HUD TO EXTEND FORECLOSURE BAN PROTECTING 8.1 MILLION PEOPLE UNTIL 2021. The Department of Housing and Urban Development will extend a ban on evictions and foreclosures for homes backed by the Federal Housing Administration through the end of the year.

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


Capitol Hill Update

— CONGRESS PIVOTS TOWARD SMALLER COVID-19 RELIEF DEAL. Congressional leadership is weighing the option of passing a smaller, more targeted pandemic relief package as pressure on reaching a compromise continues to mount. In the Senate, Republicans have drafted a slimmed-down version of their HEALS Act legislation that would address an array of COVID-19 priorities. Provisions in the Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act pertain to testing, treatment, vaccines, the postal service, small business relief, education, unemployment insurance, and liability protections. For more on the Senate GOP's draft bill, click here to read TRP's analysis.

Meanwhile, House lawmakers are preparing convene for a rare Saturday session to take up House Oversight and Reform Chairwoman Carolyn Maloney's (D-NY) postal service legislation. Additional pandemic-related items could be added to the lower chamber's schedule this weekend, as Members of the New Democrat Coalition are circulating a letter to Speaker Nancy Pelosi (D-CA) urging her to call up a bill that would renew and extend the CARES Act unemployment insurance program as is. While the two sides still remain far apart on their priorities, there appears to be willingness from both parties to restart talks with the goal of passing a scaled-back relief bill, possibly by way of tacking the measure onto a future stopgap funding resolution needed to fund the government past the Sept. 30 deadline.


Washington Insider: What We're Reading

Associated Press: Postal Service Halts Some Changes Amid Outcry, Lawsuits

Facing mounting public pressure and a crush of state lawsuits, President Donald Trump’s new postmaster general announced Tuesday he is halting some operational changes to mail delivery that critics blamed for widespread delays and warned could disrupt the November election. Postmaster General Louis DeJoy said he would “suspend” several of his initiatives — including the removal of the distinctive blue mailboxes that prompted an outcry — until after the election “to avoid even the appearance of impact on election mail.”

Politico: HUD to Extend Foreclosure Ban Protecting 8.1 Million People Until 2021

The Department of Housing and Urban Development will extend a ban on evictions and foreclosures for homes backed by the Federal Housing Administration through the end of the year, administration officials told POLITICO. The ban applies to the roughly 8.1 million homeowners with single-family mortgages insured by the FHA, a HUD agency that backs loans to low- and moderate-income borrowers.


The Hill: Trump Officials Greenlight Hunting Expansion at Nearly 150 Wildlife Refuges, Fish Hatcheries

The Trump administration on Tuesday opened up or expanded hunting and fishing at nearly 150 national wildlife refuges and fish hatcheries, expanding hunters' ability to kill big game, migratory birds and other animals. The 147 newly opened or expanded hunting sites are scattered across nearly every state and include parts of the Everglades in Florida, the Lower Rio Grande Valley National Wildlife Refuge in Texas and the Flint Hills National Wildlife Refuge in Kansas.

The Hill: California Declares State of Emergency Amid Wildfires

Following weeks of wildfires and heatwaves, California has declared a state of emergency as dozens of fires continue to ravage the state. The declaration of emergency, signed by Gov. Gavin Newsom (D) on Tuesday, will allow government agencies to utilize extra resources to combat the flames and support public safety.“California and its federal and local partners are working in lockstep to meet the challenge and remain vigilant in the face of continued dangerous weather conditions,” Newsom said.

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.

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

RECENT DEVELOPMENTS...

— 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.

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.

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COVID-19: Federal Update (10/13)

Quick Takes — FIVE KEY FACTORS ON THE NEXT COVID-19 RELIEF PACKAGE. President Trump has indicated that he wants to reach a compromise on pandemic relief aid prior to the Nov. 3. election. — 2020 EL

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