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COVID-19: Federal Update (9/4)

Quick Takes

PELOSI, MNUCHIN REACH TENTATIVE AGREEMENT TO AVOID SEPTEMBER SHUTDOWN. The two sides agreed that a "clean" continuing resolution (CR) should be passed at the end of the month to keep the government funded past the Sept. 30 deadline.

— TRUMP ADMINISTRATION BEGINS PAYROLL TAX DEFERRAL PLAN. The Treasury Department began implementing President Trump’s plan to allow a payroll tax deferral.

— U.S. JOB GROWTH SLOWS IN AUGUST, UNEMPLOYMENT RATE FALLS TO 8.4 PERCENT. U.S. job growth slowed further in August as financial assistance from the government ran out, threatening the economy’s recovery from the COVID-19 recession.

— HHS ANNOUNCES $2 BILLION INCENTIVE PAYMENT PLAN FOR NURSING HOME PROVIDER RELIEF FUNDS. HHS announced details of a $2 billion Provider Relief Fund (PRF) performance-based incentive payment distribution to nursing homes. 

Capitol Hill Update

PELOSI, MNUCHIN REACH TENTATIVE AGREEMENT TO AVOID SEPTEMBER SHUTDOWN. House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin have reportedly struck an agreement in principle to pass a "clean" continuing resolution (CR) at the end of the month to keep the government funded past the Sept. 30 deadline. The two sides have agreed not to pursue "poison pill" issues that could hamper the measure's enactment, decreasing the likelihood that additional pandemic relief aid could get tacked onto to the underlying funding bill. It does appear likely that the forthcoming measure could serve as a vehicle to carry other programs that are set to expire later this month, namely flood insurance and surface transportation programs. While the length of the CR is something that still needs to be hashed out, previous stopgap funding measures during election cycles often push funding deadline past election day and into mid-December. 

Washington Insider: What We're Reading

The Treasury Department began implementing President Trump’s plan to allow a payroll tax deferral, an executive action he says will help households weather the pandemic-ravaged economy but which faces significant practical hurdles and skepticism from employers. The government’s announcement came late Friday, just four days before it is scheduled to take effect. It postpones some payroll taxes that would normally be due between Sept. 1 and Dec. 31 and makes them due between Jan. 1 and April 30, 2021. Under this approach, employers who opt to stop some paycheck withholding now could withhold twice as much as usual early next year.

U.S. job growth slowed further in August as financial assistance from the government ran out, threatening the economy’s recovery from the COVID-19 recession. Nonfarm payrolls increased by 1.371 million jobs last month after advancing 1.734 million in July, the Labor Department’s closely watched employment report showed on Friday. The unemployment rate fell to 8.4% from 10.2% in July. Economists polled by Reuters had forecast 1.4 million jobs added in August and the unemployment rate sliding to 9.8%.

Environmental Protection Agency chief Andrew Wheeler on Thursday defended the Trump administration’s record on protecting the nation’s air and water and said a second term would bring a greater focus on pollution cleanups in disadvantaged communities and less emphasis on climate change. In a speech commemorating the 50th anniversary of the EPA’s founding, Wheeler said the agency was moving back toward an approach that had long promoted economic growth as well as a healthy environment and drawn bipartisan support.

An advocacy group on Thursday sued the Environmental Protection Agency (EPA) over its decision not to regulate a chemical that has been linked to fetal and infant brain damage.The agency announced in June that it would not regulate the chemical perchlorate even though it estimated that up to 620,000 people could be drinking water with a concerning amount of the chemical. The Natural Resources Defense Council (NRDC) sued Thursday in an attempt to get the agency to withdraw its decision not to regulate the chemical, which is used in rocket fuel.

Washington Insider: What We're Hearing

— THE LATEST ON PANDEMIC RELIEF LEGISLATIONSenate Republicans are pushing for action on a slimmed-down version of their HEALS Act legislation when they return from the August district work period. Senate Majority Leader Mitch McConnell (R-KY) will likely call up the Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act for a vote next week, and is expected to provide additional details on timing as soon as today. Senate Democrats have already signaled that they could block a vote on the pared-back relief measure, with Minority Leader Chuck Schumer (D-NY) calling it "completely inadequate" in a "Dear Colleague" letter. The draft version of the legislation contains pandemic-related provisions on testing, treatment, vaccines, the postal service, small business relief, education, unemployment insurance, and liability protections. For more on the Senate GOP's "skinny" relief 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 do they 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 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


— HHS ANNOUNCES $2 BILLION INCENTIVE PAYMENT PLAN FOR NURSING HOME PROVIDER RELIEF FUNDS. The Department of Health and Human Services (HHS) announced details of a $2 billion Provider Relief Fund (PRF) performance-based incentive payment distribution to nursing homes. 

  • Nursing homes will not have to apply to receive a share of this $2 billion incentive payment allocation; HHS will be measuring nursing home performance through required nursing home data submissions and distributing payments based on these data


— TREASURY UPDATES CORONAVIRUS RELIEF FUND FAQS. The Treasury Department updated its list of frequently asked questions on the State, Local, and Tribal Coronavirus Relief Fund.

  • New questions and answers pertaining to the use of funds for school reopenings, critical public health infrastructure, allowable expenditures not accounted for in the most recent budget, and National Environmental Policy Act projects (Questions A. 53-56) were posted yesterday evening.

  • Questions related to restrictions on transfers of funds to local governments (Question A. 34) and covering hazard pay for employees (Question A. 38) were amended.

— NIH ANNOUNCES NEW CONTRACT FUNDING TO BOOST COVID-19 TESTING. The National Institutes of Health (NIH) announced $129.3 million in contract funding for a new set of COVID-19 testing technologies as part of its Rapid Acceleration of Diagnostics (RADx) initiative

  • The contracts have been awarded to nine companies for technologies that include portable point-of-care tests for immediate results and high-throughput laboratories that can return results within 24 hours.

— CDC EXERCISES QUARANTINE AUTHORITY TO HALT EVICTIONS. In response to President Trump's executive order aimed at extending the moratorium on housing evictions, the Centers for Disease Control and Prevention (CDC) issued an order under the agency's quarantine authority that temporarily halts residential evictions to prevent further spread of COVID-19 until Dec. 31, 2020.

— NATIONAL ACADEMY OF MEDICINE RELEASES PRELIMINARY FRAMEWORK FOR VACCINE DISTRIBUTION. The National Academies of Science, Engineering, and Medicine released a preliminary framework for COVID-19 vaccine distribution. The draft elaborates on lessons learned from past vaccine campaign strategies for allocating scarce resources during the COVID-19 pandemic. Click here to read TRP's summary of the framework.

— TRICARE TO COVER INVESTIGATIONAL COVID-19 DRUGS. The Assistant Secretary of Defense for Health Affairs issued an interim final rule (IFR) designed to bolster TRICARE coverage during the COVID-19 pandemic. Click here to read TRP's summary of the rule.

— HHS ANNOUNCES DISTRIBUTION FOR ASSISTED LIVING FACILITIES. HHS announced that assisted living facilities (ALFs) may now apply for funding under the Provider Relief Fund Phase 2 General Distribution allocation. 

— FDA ANNOUNCES COVID-19 ADVISORY COMMITTEE MEETING. The Food and Drug Administration (FDA) announced that a public meeting of the Vaccines and Related Biological Products Advisory Committee will be held on Oct. 22, 2020, to discuss the development, authorization, and/or licensure of vaccines indicated to prevent COVID-19.

— HHS OUTLINES LIABILITY PROTECTIONS FOR NURSING HOMES TO ADMINISTER ASYMPTOMATIC COVID-19 TESTING. HHS issued guidance outlining legal protections for health providers who administer COVID-19 tests to screen people without symptoms in group living facilities such as nursing homes.

— TRUMP ADMINISTRATION ISSUES GUIDANCE ON PAYROLL TAX EO. The Treasury Department and Internal Revenue Service (IRS) issued guidance outlining implementation steps for the President's executive order on the payroll tax deferral. The guidance postpones some payroll taxes that would normally be due between Sept. 1 and Dec. 31 and makes them due between Jan. 1 and April 30, 2021.

— CMS ISSUES NEW FAQS ON PROVIDER RELIEF FUND. The Centers for Medicare & Medicaid Services (CMS) released an additional list of Frequently Asked Questions (FAQs) to Medicare providers regarding the Provider Relief Fund and the Small Business Administration’s Paycheck Protection Program payments. 

  • The FAQs address how to report provider relief fund payments, uninsured charges reimbursed through the Uninsured Program administered by Health Resources and Services Administration, and Small Business Administration (SBA) Loan Forgiveness amounts. The FAQs also address that provider relief fund payments should not offset expenses on the Medicare Cost Report.  

— HHS ANNOUNCES $2.5 BILLION PROVIDER RELIEF FUND DISTRIBUTION TO NURSING HOMES. HHS announced that it has distributed $2.5 billion of a planned $5 billion in funding to nursing homes aimed at supporting increased testing, staffing, and personal protective equipment (PPE) needs.

  • The funding allocation was made through the Health Resources and Services Administration (HRSA) as a targeted distribution from the $175 billion Provider Relief Fund.

— 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. 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 a 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. 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. HHS has extended the deadline to apply for funding through the CARES Act Provider Relief Fund to Sunday, Sept. 13.

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