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COVID-19: Federal Update (8/27)

Quick Takes

— PELOSI, MEADOWS TO RESUME COVID-19 RELIEF NEGOTIATIONS. Despite the willingness to restart talks, the two sides still remain far apart on the next bill and a deal is unlikely to formulate until later next month.

— WHITE HOUSE WEIGHS AIRLINE JOB SUPPORT IN CASE STIMULUS FAILS. The Trump administration is examining executive actions to help airlines avoid employee furloughs should Congress fail to provide assistance in a new round of stimulus.

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— FHFA EXTENDS COVID-19 FORBEARANCE POLICY. Fannie Mae and Freddie Mac will extend buying qualified loans in forbearance and several loan origination flexibilities until Sept. 30, 2020.

Capitol Hill Update

— PELOSI, MEADOWS TO RESUME COVID-19 RELIEF NEGOTIATIONS. The two top negotiators for House Democrats and the Trump administration are set to pick up talks on another round of pandemic relief legislation in hopes of breaking the weekslong gridlock over the size and scope of the next bill. House Speaker Nancy Pelosi (D-CA) and White House Chief of Staff Mark Meadows will meet by phone this afternoon to discuss COVID-19 relief as they look to make some progress on key issues such as unemployment insurance, state and local aid, funding for the U.S. Postal Service (USPS), and education assistance, among other things. Despite the willingness to restart talks, the two sides still remain far apart on the next bill and a deal is unlikely to formulate until later next month. Meadows noted that the White House would support tacking the measure onto a forthcoming continuing resolution (CR) needed to avert the Sept. 30 government funding deadline, adding that President Donald Trump is continuing to mull over additional executive actions in lieu of legislation.

Washington Insider: What We're Hearing

White House Chief of Staff Mark Meadows said the Trump administration is examining executive actions to help airlines avoid employee furloughs should Congress fail to provide assistance in a new round of stimulus. “If Congress is not going to work, this president is going to get to work and solve some problems,” Meadows said Wednesday at an event hosted by Politico. “Hopefully we can help the airlines and keep some of those employees from being furloughed.” Meadows said he believed that assistance for the industry would require another legislative package but that the White House was “looking at other executive actions” and planned “a few” additional unilateral stimulus measures in addition to the package of executive actions signed by Trump last month.

Partisan tensions are set to color talks on how long the stopgap funding bill for federal agencies needed next month should run, on top of already fraught coronavirus aid discussions. It’s a typical election-year question with major implications for government operations and stakeholders who depend on them: Will Congress punt decisions into a postelection lame-duck session, or opt for a lengthier continuing resolution that runs into perhaps March? With a divided Congress, there’s no easy answer to that question. The emerging consensus view is Republicans favor a short-term patch, while Democrats may push for the longer-term punt.

The United States is considering new restrictions on exports of semiconductor manufacturing equipment and associated software tools, lasers, sensors, and other technology to prevent them from falling into the hands of U.S. adversaries like China. The U.S. Commerce Department said in a posting on a government website on Wednesday it was seeking public input on how to define new technologies as it determines “whether there are specific foundational technologies that warrant more restrictive controls” in the export process.

New unemployment applications dropped slightly to 1 million last week, the Labor Department reported Thursday. The labor market has now weathered more than five consecutive months of historic layoffs. An additional 608,000 laid-off workers sought jobless aid through the Pandemic Unemployment Assistance program, created for those not traditionally eligible for unemployment benefits like the self-employed and gig workers. In total, 27 million workers are unemployed, according to DOL.

Washington Insider: What We're Reading

City and state leaders expressed fears Tuesday that the Trump administration may cease reimbursing some of their purchases of masks, gloves and other personal protective equipment, a move they said could tear new holes in their budgets while threatening public health. The trouble stems from the Federal Emergency Management Agency, which typically provides funds for disaster relief and has played a central role in the coronavirus pandemic. In calls throughout August, FEMA signaled that it may soon seek to rethink the criteria by which it doles out those dollars, troubling local governments, which say they are desperate for easy-to-access federal cash as the contagion continues to spread.

President Donald Trump could take executive action to avoid massive layoffs at U.S. airlines, while an impasse on a new coronavirus stimulus package continues in Congress, White House Chief of Staff Mark Meadows said on Wednesday. “We’re looking at other executive actions,” Meadows said in an online interview with Politico. “If Congress is not going to work, this president is going to get to work and solve some problems. So hopefully, we can help out the airlines and keep some of those employees from being furloughed.”

Senate Democrats on Tuesday released a more than 200 page climate plan that they’re billing as a roadmap for what they’ll do if they can take back the majority after this year’s election. The sprawling report has the broad goals of increasing federal spending on climate action to 2 percent of gross domestic product each year and creating 10 million new jobs. It also calls for the whole world to reach net-zero emissions by 2050.

A coalition of 87 House lawmakers is asking the Environmental Protection Agency (EPA) to withdraw its latest rules rescinding standards for methane emissions in the oil and gas industry. “Methane is one of the most potent greenhouse gases driving climate change — 84 times more powerful than carbon dioxide in the first two decades after its release,” the members wrote in the letter, which was signed by 85 Democrats and two Republicans.

COVID-19: What We're Hearing

— SENATE GOP DRAFTS 'SKINNY' PANDEMIC RELIEF BILL. 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.

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:

· Appropriations (text; summary);

· Finance (text; summary);

· Small Business (text; summary);

· Liability (text; summary); and

· Supply Chain (text; summary).

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


— FHFA EXTENDS COVID-19 FORBEARANCE POLICY. The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will extend buying qualified loans in forbearance and several loan origination flexibilities until Sept. 30, 2020.

— CMS ISSUES GUIDANCE FOR IMPLEMENTING NEW TESTING REQUIREMENTS IN NURSING HOMES AND LABS. The Centers for Medicare and Medicaid Services (CMS) issued guidance for nursing homes and clinical laboratories aimed at preventing and mitigating the spread of COVID-19.

· The guidance requires all nursing homes to test all residents and staff for COVID-19 and includes new survey tool. It also recommends that facilities that conduct patient lab tests use authorized detection antigens as another deterrent in infection prevention and control.

— FDA APPROVES RAPID COVID-19 TEST FOR EMERGENCY USE. The Food and Drug Administration (FDA) issued an emergency use authorization (EUA) for Abbott's antigen test where results can be read directly from the testing card, a similar design to some pregnancy tests.


— HHS EXTENDS PROVIDER RELIEF FUND APPLICATION DEADLINE. The Department of Health and Human Services (HHS) has extended the deadline to apply for funding through the CARES Act Provider Relief Fund to Sunday, Sept. 13.

— TRUMP ADMINISTRATION PUBLISHES NEW RULES AIMED AT BOLSTERING COVID-19 DATA. The Trump administration published new rules outlining COVID-19 testing and reporting requirements aimed at fighting outbreaks in nursing homes and gaining more data on the pandemic from hospitals and laboratories.

· The new interim final rule mandates that hospitals report a slew of data daily, such as the number of confirmed or suspected coronavirus patients and how many ICU beds are occupied. It also levies fines against laboratories and nursing homes conducting COVID-19 testing for individual patients if they do not report daily results to HHS.

— CMS LAUNCHES NEW NATIONAL NURSING HOME TRAINING PROGRAM. The Centers for Medicare and Medicaid Services (CMS) announced that it has launched a new national training program for frontline nursing home staff and management aimed at providing more knowledge to mitigate the spread of COVID-19.

— CMS ISSUES BULLETIN ON MEDICAID REIMBURSEMENT STRATEGIES TO PREVENT SPREAD OF COVID-19 IN NURSING FACILITIES. CMS issued a Medicaid Informational Bulletin outlining guidance to states on flexibilities that are available to increase reimbursement for nursing facilities that implement specific infection control practices.

· This includes information on the Disaster State Plan Amendments (SPA) template and describes how states may use state-directed payments to increase reimbursement to nursing facilities in managed care


The Office of Civil Rights (OCR) at HHS issued amended guidance on how the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule permits covered health care providers and health plans to contact their patients and beneficiaries who have recovered from COVID-19 to inform them about how they can donate their convalescent plasma.

· The guidance emphasizes that, without individuals' authorization, the providers and health plans cannot receive any payment from, or on behalf of, a plasma donation center in exchange for such communications with recovered individuals.

— FDA GRANTS EMERGENCY USE FOR CONVALESCENT PLASMA TREATMENTS. FDA issued an emergency use authorization (EUA) for investigational convalescent plasma for the treatment of COVID-19 in hospitalized patients.

— TRUMP ADMINISTRATION INVOKES DPA FOR NURSING HOME RAPID TESTS. HHS announced that it has invoked the Defense Production Act (DPA) to secure rapid COVID-19 tests and supplies for roughly 14,000 nursing homes across the country.

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