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COVID-19: Federal Update (9/30)

Quick Takes

— PELOSI, MNUCHIN SET TO PICK UP PANDEMIC RELIEF TALKS. Speaker Pelosi and Secretary Steven Mnuchin are set to resume their negotiations on the next round of COVID-19 relief legislation this afternoon.

— U.S. TO START FORGIVING PPP LOANS AFTER BORROWERS COMPLAINED.  The government expects to approve and pay forgiveness requests by late this week or early next, a Treasury spokesperson said. 


— BANKING AGENCIES FINALIZE RULE ON COVID-19 FACILITIES. The final rule formally adopts three interim final rules issued earlier this year that allows banks to neutralize the effects of their participation for purposes of the liquidity coverage ratio.


Capitol Hill Update

— PELOSI, MNUCHIN SET TO PICK UP PANDEMIC RELIEF TALKS. House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin are set to resume their negotiations on the next round of COVID-19 relief legislation this afternoon. Speaker Pelosi and White House Chief of Staff Mark Meadows each expressed optimism about the prospects of reaching a deal after yesterday's talks, and Secretary Mnuchin is expected to present a more detailed proposal during today's session. Meanwhile, the House Rules Committee will meet today to develop a rule that would govern debate on a potential COVID-19 package. If a deal does not come to fruition, it is expected that the House will take up the revamped HEROES Act (text; summary; one-pager) for a vote prior to the end of the week.


— SENATE SET TO PASS GOVERNMENT FUNDING STOPGAP; HOUSE TAKES UP SUSPENSION BILLS. Senators will vote on final passage of the bipartisan continuing resolution (CR) (textsummary) today, sending the funding bill to President Donald Trump's desk for signature ahead of tonight's government funding deadline. The measure — which includes extensions for the surface transportation law, National Flood Insurance Program (NFIP), and expiring health care programs — would punt the funding deadline into the "lame duck" session on Friday, Dec. 11. Meanwhile, the House will convene for legislative business this afternoon to consider nine bills under suspension of the rules. This includes legislation out of the Oversight and Reform Committee that would require federal agencies to submit plans for responding to any resurgence of COVID–19.


Washington Insider: What We're Reading

The Wall Street Journal: U.S. to Start Forgiving PPP Loans After Borrowers Complained ($)

The Treasury Department said Tuesday it would begin forgiving loans granted to small-business owners under the Paycheck Protection Program, following banks’ and borrowers’ complaints that the process had been bogged down. The government expects to approve and pay forgiveness requests by late this week or early next, a Treasury spokesperson said. The applications are generally expected to be approved quickly, with the exception of loans above $2 million that will get added scrutiny.

The Hill: Treasury Offers Coronavirus Relief Loans to Seven Major US Airlines

The Treasury Department announced it offered loans to seven major U.S. airlines on Tuesday, including Alaska, American, Frontier, JetBlue, Hawaiian, SkyWest and United. Each airline could receive a multi-billion dollar loan from the Treasury, which is responsible for doling out $25 billion in funding for airlines that Congress approved in the CARES Act earlier this year. The CARES Act authorized such loans to provide liquidity to businesses devastated by the coronavirus pandemic. 

The Wall Street Journal: House Democrats to Call for Big Tech Breakups ($)

Democratic lawmakers are expected to call on Congress to blunt the power of big technology companies, possibly through forced separation of online platforms, as a House panel concludes its Big Tech probe. The House Antitrust Subcommittee is nearing completion of a report wrapping up its 15-month investigation of Alphabet Inc.’s Google, Apple Inc., Amazon.com Inc., and Facebook Inc. The report follows the committee’s collection of more than one million documents from the companies and competitors, as well as a July hearing with CEOs of the four tech giants.

The Hill: House Passes Bills to Secure Energy Sector Against Cyberattacks

The House on Tuesday unanimously passed four bills aimed at securing the power grid and other energy infrastructure against cyberattacks. All four of the bipartisan bills were approved by voice vote, and supported by the leaders of the House Energy and Commerce and House Science, Space, and Technology panels. The Cyber Sense Act, primarily sponsored by Reps. Bob Latta (R-Ohio) and Jerry McNerney (D-Calif.), would require the secretary of Energy to establish a program to test the cybersecurity of products intended to be used in the bulk power system.


COVID-19: What We're Hearing

— HOUSE DEMS REINTRODUCE HEROES ACT. House Democrats reintroduced their HEROES Act pandemic relief legislation as Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin continue negotiations. The $2.2 trillion draft bill largely reflects many of the same policies that were presented in the original version, including: (1) another round of $1,200 stimulus checks and $600 per week unemployment benefits; (2) support for COVID-19 testing, treatment, and health care providers; (3) emergency paid family and medical leave; and (4) support for child care services, among other provisions. Key changes to the new HEROES Act include:

  • State and Local Aid. The bill would offer $436 billion for state and local governments impacted by the pandemic, down from the nearly $1 trillion offered in the original version. The bill also retains a temporary lift $10,000 cap on the state and local tax (SALT) deduction, but for one year instead of two.

  • PPP. The bill would repurpose $146 billion in unspent Paycheck Protection Program (PPP) funding for other small business programs contained in the bill.

  • Health Providers. The bill includes roughly $50 billion less for hospitals and other health care providers. It also does away with a $190 billion hazard pay program for health care workers and first responders.

  • Restaurant Aid. The bill would establish a $120 billion program through the Treasury Department aimed at providing restaurants and other food service entities with grant funding to offset payroll costs and eligible expenses.

  • Mental Health. The bill would provide $8.5 billion in funding to the Substance Abuse and Mental Health Services Administration (SAMHSA), an increase from the $3 billion provision in the original version.

  • Airlines. The bill would extend the Payroll Support Program (PSP) for airlines, authorizing $25 billion for the program through Mar. 31, 2021.

  • Postal Service. The bill includes $10 billion less for the U.S. Postal Service (USPS) compared to the original version. This amount could eventually be available to USPS if the borrowing restrictions contained in the CARES Act are repealed.

— HOUSE REPUBLICANS PRESS FOR ACTION ON PPP. House GOP lawmakers are formulating a strategy to bring a bill to the floor that would extend and reform the Small Business Administration's Paycheck Protection Program (PPP). Sponsored by Small Business Committee Ranking Member Steve Chabot (R-OH), the legislation would extend the signature small business rescue program through the end of the year, creating an opportunity for a second PPP loan for small businesses, nonprofits, independent contractors, and sole proprietors should they meet eligibility criteria outlined in the bill. The measure would also: (1) allot $25 billion for small businesses with fewer than 10 employees; (2) expand on the list of covered expenses; and (3) clarify the forgiveness process for smaller loans, both below $150,000 and between $150,000 and $2 million.

  • Next Steps. In a move aimed at circumventing House Democratic leadership, Rep. Jaime Herrera Beutler (R-WA) is currently spearheading a "discharge petition" that would prompt a vote on whether to bring the legislation to the floor. If all GOP members sign onto the petition, the minority would need at least 20 House Democrats to also sign on in order to officially discharge the legislation from the Small Business Committee and onto the floor. Under House rules, the earliest this petition can formally be filed is Friday, Sept. 25.


PROBLEM SOLVERS ROLL OUT COVID-19 PROPOSAL. The bipartisan Congressional Problem Solvers Caucus outlined their roughly $2 trillion proposal for the next round of pandemic relief aid amid mounting concerns from rank-and-file lawmakers about the lack of progress on leadership-level negotiations. The proposal reflects an effort to find a bipartisan compromise on several emerging and existing needs related to the COVID-19 public health emergency, including state and local aid, health care, liability protections, unemployment insurance, and child care. It also includes provisions on small business relief, broadband funding, agriculture aid, and postal service support. Click here to read TRP's analysis of this proposal.

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 do they address liability-related issues — leaving employers at risk of litigation until a compromise deal is hammered out. 


— HEALS Act. Senate Republicans officially introduced their opening offer 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...

— BANKING AGENCIES FINALIZE RULE ON COVID-19 FACILITIES. Federal banking agencies finalized a rule aimed at facilitating banks’ participation in the Paycheck Protection Program and Money Market Mutual Fund Liquidity Facilities. The final rule formally adopts three interim final rules issued earlier this year that allows banks to neutralize the effects of their participation for purposes of the liquidity coverage ratio.

— CMS UPDATES COVID-19 TESTING METHODOLOGY FOR NURSING HOMES. The Centers for Medicare & Medicaid Services (CMS) announced it was updating its approach to determine the rate of COVID-19 positivity in counties across the country. This information is particularly relevant for nursing homes, which are required to test their staff for COVID-19 at a frequency based on the positivity rate of their respective counties.

  • Counties with 20 or fewer tests over 14 days will move to “green” in the color-coded system of assessing COVID-19 community prevalence.

  • Counties with both fewer than 500 tests and fewer than 2,000 tests per 100,000 residents, and greater than 10 percent positivity over 14 days – which would have been “red” under the previous methodology – will move to “yellow.”


RECENT DEVELOPMENTS...

— ADMINISTRATION ANNOUNCES PLAN TO SEND RAPID TESTS TO STATES. The Trump Administration announced a national distribution plan for deploying 150 million rapid coronavirus tests to states.

— TRUMP ADMINISTRATION AWARDS CONTRACT FOR DOMESTIC API PRODUCTION. The Departments of Defense (DoD) and Health and Human Services (HHS) awarded a $20 million contract to On Demand Pharmaceuticals aimed at bolstering domestic production capability for active pharmaceutical ingredients.

— NEW CMS TOOLKIT SEEKS TO SIMPLIFY CERTIFICATION FOR COVID-19 TESTING LABS. The Centers for Medicare and Medicaid Services (CMS) issued new tools aimed at streamlining the certification process for labs that test for COVID-19.

  • The toolkit includes a guide that helps laboratories with the application process for Clinical Laboratory Improvement Amendments (CLIA) certification, as well as information on the expedited review process that allows labs to start COVID-19 testing before official certification.

— FDA AUTHORIZES FIRST POC COVID-19 ANTIBODY TEST. The Food and Drug Administration (FDA) issued an emergency use authorization for the first antibody point-of-care test for COVID-19. This will allow the fingerstick blood sample to be tested in POC settings such as doctors' offices, hospitals, urgent care facilities, and emergency rooms.

— TRUMP ADMINISTRATION ALLOCATES $200 MILLION TO JURISDICTIONS FOR VACCINE PREPAREDNESS. The Trump administration announced that the Centers for Disease Control and Prevention (CDC) will award $200 million in CARES Act funding to 64 jurisdictions through the agency's immunization cooperative agreement. The funding is intended for jurisdictions to plan for and implement COVID-19 vaccination services.

— HHS ISSUES PRF REPORTING GUIDANCE. HHS posted new reporting requirements for the Provider Relief Fund (PRF), specifying the data that providers who received more than $10,000 in PRF payments will be required to submit as part of a post-payment reporting process. 

— GAO REPORT ON COVID-19: FEDERAL EFFORTS COULD BE STRENGTHENED BY TIMELY AND CONCERTED ACTIONS. The Government Accountability Office (GAO) published a report on the agency's oversight of federal actions to support public health, individuals, and the economy during the COVID-19 public health emergency.

  • The report includes 16 recommendations pertaining to the medical supply chain, Paycheck Protection Program (PPP), State and Local Coronavirus Relief Fund, and cybersecurity, among others.

— CMS RELEASES INFORMATION ON COVERAGE FOR COVID-19 TESTING. The Center for Medicare and Medicaid Services (CMS) released information designed to help states, nursing facilities, and other providers better understand the sources of Medicare and Medicaid coverage and payment for COVID-19 testing, including a flow chart detailing testing coverage for nursing facility residents. 


— FDA PUBLISHES GUIDANCE ON INVESTIGATIONAL COVID-19 CONVALESCENT PLASMA. The FDA issued final guidance that outlines recommendations to health care providers and investigators on the use of investigational convalescent plasma in COVID-19 patients.

— TRUMP ADMINISTRATION OUTLINES GAME PLAN FOR VACCINE DISTRIBUTION. The Trump administration outlined its plan to distribute and administer millions of doses of COVID-19 vaccines in a report to Congress and a playbook for states.

  • CDC is requiring states to submit plans on how they would distribute and administer a vaccine by Friday, Oct. 16.

— INDEPENDENT NURSING HOME COMMISSION OUTLINES RECOMMENDATIONS. CMS published the final report from the independent Coronavirus Commission for Safety and Quality in Nursing Homes.

  • The Commission outlined 27 recommendations and accompanying action steps pertaining to testing, screening, PPE, infection control, and quality of life, among others.

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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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