COVID-19: Federal Update (6/25)

Quick Takes

— HOUSE EYES PASSAGE OF DEMOCRATIC POLICE REFORM EFFORT. The bill is expected to pass along party lines today.

— SENATE MOVES TO NDAA AFTER POLICING BILL STALLS. The upper chamber will likely look to pass the $740 billion annual defense measure prior to the July 4 district work period.

— REPORT: STATE, LOCAL AID NEEDED TO AVERT 4 MILLION LAYOFFS. A new private sector report is warning anew of continuing damage to the economy if Washington doesn’t deliver several hundred billion dollars in budget relief to states and local governments.

— BIPARTISAN SENATORS INTRODUCE LEGISLATION TO UPDATE TECH LIABILITY PROTECTIONS. Sens. Brian Schatz (D-Hawaii) and John Thune (R-S.D.) introduced legislation Wednesday to update legal protections for online platforms.

 Capitol Hill Update

— HOUSE EYES PASSAGE OF DEMOCRATIC POLICE REFORM EFFORT. House lawmakers will convene for legislative business today to consider the Democrats’ sweeping package (textsummary) of police reform legislation. The Justice in Policing Act offers several reforms aimed at reducing discrimination and the excessive use of force among police officers, while also boosting transparency, oversight, and accountability over problematic law enforcement agencies. The bill is expected to pass along party lines today. While House Democratic leadership has indicated support for going to conference with the Senate to hammer out a bipartisan agreement, it remains to be seen whether the two sides will be able to bridge the partisan gaps and coalesce behind a comprehensive proposal. For more on the state of play with respect to the Congressional police reform efforts, click here to read TRP’s analysis.

— LOWER CHAMBER TEES UP JULY LEGISLATIVE BLITZ. In addition to the Democrats’ police reform package, the House will consider a rule that will govern debate on several key legislative items over the course of the next few legislative days. This includes: (1) legislation that seeks to stabilize the Affordable Care Act (ACA); (2) a bill that seeks to reform the Fair Credit Reporting Act; (3) a measure that would make Washington, D.C. the 51st state; (4) a Congressional Review Act resolution that seeks to overturn the Trump administration’s regulation pertaining to the Community Reinvestment Act; and (5) an act that seeks to prevent evictions, foreclosures, and unsafe housing conditions resulting from the COVID-19 pandemic.

— SENATE MOVES TO NDAA AFTER POLICING BILL STALLS. Senators will convene today to wrap up their legislative work week. Following a blocked procedural vote on the Senate GOP’s police reform legislation yesterday, Majority Leader Mitch McConnell (R-KY) has filed a vote to move onto consideration of the Senate’s fiscal year (FY) 2021 National Defense Authorization Act (NDAA) (text; summary; report; tables). The upper chamber will likely look to pass the $740 billion annual defense measure prior to the July 4 district work period next week. However, debate on certain amendments — particularly related to renaming bases that honor Confederate military leaders — could push the vote later into July.

Washington Insider: What We’re Reading

Associated Press: Report: State, Local Aid Needed to Avert 4 Million Layoffs

A new private sector report is warning anew of continuing damage to the economy if Washington doesn’t deliver several hundred billion dollars in budget relief to states and local governments amid the coronavirus pandemic. The study warns that doing nothing to address the economic perils of state layoffs and cutbacks could cost 4 million jobs. But it also says that significantly less money is needed than what’s being called for by House Democrats, who passed almost $1 trillion in help for cash-poor states and local governments as part of a sweeping $3.5 trillion rescue package last month.

The Hill: Bipartisan Senators Introduce Legislation to Update Tech Liability Protections

Sens. Brian Schatz (D-Hawaii) and John Thune (R-S.D.) introduced legislation Wednesday to update legal protections for online platforms. The Platform Accountability and Consumer Transparency (PACT) Act would create a new method for holding the companies accountable by clarifying Section 230 of the Communications Decency Act to require companies to give consumers more information about their content moderation policies and let users appeal decisions.

The Hill: Conservation Bill Creates Strange Bedfellows

Environmentalists are rallying around a major conservation bill that derives much of its funding from their archenemy: the fossil fuel industry. The Great American Outdoors Act — passed by the Senate last week and slated for a House vote next month — would dedicate $900 million annually for the Land and Water Conservation Fund (LWCF). Most of that money, however, comes from offshore oil and gas royalties. Conservation advocates say they support the legislation despite the funding source, arguing it puts to good use revenue that is already being collected by the federal government.

The Wall Street Journal: Battered U.S. Wine Importers Brace for Higher Tariffs ($) The U.S. Trade Representative’s office, which imposed 25% tariffs on wine, cheeses, olives and other products from the European Union in October, is now considering raising levies to 100%, citing a lack of progress in negotiating a settlement and eliminating subsidies for Airbus SE. In a public filing, the USTR said it could raise the tariffs on or about Aug. 12, and that it anticipated opening a comment process in late June. Importers, restaurateurs and others who buy European wines say higher tariffs would devastate an industry floored by months of lockdowns.

COVID-19: What We’re Hearing

— ‘CARES 2.0’ STATE OF PLAY. While Senate Majority Leader Mitch McConnell (R-KY) has indicated that Congress will likely need to pass another round of COVID-19 relief legislation, Republicans are pushing for a more narrowly-targeted relief package following better-than-expected jobs numbers for the month of May, and the White House would prefer to wait and see the June labor numbers before negotiating with Congress in earnest. Conversely, Congressional Democrats are remaining steadfast on their push for another robust stimulus package. As the public health emergency continues to unfold, lawmakers are mulling over several policy options for the next round of legislation, including:

  • Liability. Leader McConnell and Sen. John Cornyn (R-TX) are working on legislation that would limit the liabilities of health care workers, business owners, and employees from lawsuits pertaining to the COVID-19 outbreak. Leader McConnell emphasized that any future COVID-19 relief efforts must include these protections in order for the Senate to consider additional relief legislation.
    • House Democratic leadership appears open to negotiating a deal on liability protections. House Majority Leader Steny Hoyer (D-MD) emphasized that these protections must not undermine the health and rights of workers, but indicated that the issue is open for further discussion and negotiation.
  • Unemployment Reform. Senate Republicans are spearheading efforts on reforming the enhanced unemployment benefits so that generous payments approved in the CARES Act don’t become an obstacle to rehiring workers.
    • A key option on the table includes enhancing a tax credit that would give employers a tax break for keeping workers on the payroll.
  • State and Local Governments. Funding for state and local governments is a key pillar of the Democrats’ next stimulus bill. While there is bipartisan agreement that more needs to be done to help stymie economic hardships for these entities, allocating additional funding has become a divisive issue within the Republican conference.
    • It appears likely that some Senate Republicans — particularly those who are up for re-election — would coalesce behind a bipartisan proposal that would provide additional funding and flexibility to address needs at the state and local level.
  • PPP. Following Congressional passage of the Paycheck Protection Program Flexibility Act, Lawmakers are eyeing further reforms to the PPP.
    • Prior to Senate passage of H.R. 7010, Sens. Ron Johnson (R-WI) and Mike Lee (R-UT) — who had expressed concerns and opposition to the House-passed bill secured a letter from key Small Business Committee members in both chambers clarifying that the intent of the legislation is not to reauthorize the program through the end of the year without additional reforms.
    • Small Business Committee Chairman Marco Rubio (R-FL) and Sen. Susan Collins (R-ME) have also indicated they are working on a technical change to the legislation that would ensure businesses can have their loans forgiven in some form regardless of whether they reach the 60 percent threshold.
    • Additionally, there has been a bipartisan push in Congress to expand PPP eligibility to 501(c)6 organizations and other currently ineligible nonprofits in the next round of COVID-19 relief legislation. 
  • Surprise Billing. Reports out of the Trump administration suggest that the White House will push for action on surprise medical bills ahead of the next round of relief legislation.
    • During the CARES Act negotiations, Chairman Frank Pallone (D-NJ) and Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) were actively trying to tack their surprise billing legislation onto the package. 
  • Budget Reform. A bipartisan group of House lawmakers penned a letter to Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) calling for provisions that address the federal debt and trust funds for Medicare and Social Security to be included in the next round of COVID-19 relief legislation.

APPROPRIATIONS UPDATE. As the COVID-19 pandemic continues to upend the Congressional schedule, lawmakers are adjusting their expectations for consideration of fiscal year (FY) 2021 spending bills.

  • House. Chairwoman Nita Lowey (D-NY) officially announced the House Appropriations Subcommittee markup schedule for the week of Jul. 6.
    • Jul. 6: State & Foreign Operations, Agriculture, Military Construction-VA
    • Jul. 7: Homeland Security, Interior-Environment, Legislative Branch, Energy-Water, Labor-HHS-Education
    • Jul. 8: Commerce-Science-Justice, Transportation-Housing and Urban Development, Financial Services and General Government, Defense.
  • Senate. Chairman Richard Shelby (R-AL) is delaying the forthcoming markups ahead of the July 4 recess amid partisan disagreements over COVID-19 relief and police reform amendments that Democrats want to offer. 
    • When the Appropriations Committee begins its markup process, appropriators will look to skip subcommittee markups for seven out of the FY 2021 spending bills, going straight to full committee markups instead. Senators on the panel are also expected to vote on the 302(b) funding allocations for each of the 12 bills ahead of the forthcoming markups.

COVID-19 Legislative & Regulatory Trackers

RECENT DEVELOPMENTS…

— HHS LAUNCHES PROGRAM AIMED AT FIGHTING COVID-19 IN MINORITY, RURAL COMMUNITIES. The Department of Health and Human Services (HHS) announced a new three-year, $40 million program with the Morehouse School of Medicine to deliver COVID-19 information to minority and rural communities in an effort to combat the pandemic in these areas.

— CFPB ISSUES INTERIM FINAL RULE ON LOSS MITIGATION OPTIONS FOR HOMEOWNERS. The Consumer Financial Protection Bureau (CFPB) issued an interim final rule that will allow borrowers who have experienced financial hardships due to COVID-19 to delay payments even if they have only a limited amount of information on the homeowner.

— NEW FED EXAMINER GUIDANCE SEEKS TO PROMOTE FLEXIBILITY. The Federal Reserve issued new examiner guidance that seeks to promote consistency and flexibility in the supervision and examination of financial institutions that have been affected by the COVID-19 pandemic.

— CMS RELEASES COVID-19 DATA, ISSUES CALL TO ACTION ON VALUE-BASED CARE. The Centers for Medicare and Medicaid Services (CMS) released new data on the COVID-19 outbreak that highlights racial and socioeconomic divides among Medicare beneficiaries who were infected. As a result of this data, the agency is calling for a renewed national commitment to value-based care.

— SBA, TREASURY REACH AGREEMENT ON PPP TRANSPARENCY. The Small Business Administration (SBA) and Treasury Department reached an agreement with Congress to disclose information regarding recipients of the Paycheck Protection Program (PPP). The names of businesses who received loans ranging from $150,000 to $10 million will be disclosed publicly by the federal government.

— SBA LAUNCHES TOOL TO CONNECT BUSINESSES WITH CDFIS AND SMALL ASSET LENDERS. SBA launched an online tool for small businesses and non-profits to be matched with Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), Farm Credit System lenders, Microlenders, as well as traditional smaller asset size lenders in the Paycheck Protection Program (PPP).

— CMS ANNOUNCES MEMBERSHIP OF INDEPENDENT CORONAVIRUS COMMISSION ON SAFETY AND QUALITY IN NURSING HOMES. CMS announced the membership of the Independent Coronavirus Commission on Safety and Quality in Nursing Homes.

  • The Commission will conduct an assessment of the response to the COVID-19 pandemic in nursing homes and make recommendations on actions and best practices for immediate and future actions.

— HHS TO HOLD WEBINARS ON PROVIDER RELIEF FUND. HHS will hold two webcasts this week for providers to learn more about the application process for the $15 billion Medicaid and CHIP targeted allotment.

— IRS ISSUES GUIDANCE ON CARES TELEHEALTH AND VIRTUAL CARE FLEXIBILITIES. The IRS recently outlined flexibilities and issued guidance addressing the CARES safe harbor provision allowing high deductible health plans (HDHPs) with health savings accounts (HSAs) to cover telehealth and remote care before a patient reaches their deductible. The temporary flexibility applies to services provided on or after Jan. 1, 2020, for plan years beginning on or before Dec. 31, 2021.

— SBA, TREASURY ANNOUNCE NEW AND REVISED FORGIVENESS APPLICATION FOR PPP. The SBA and Treasury Department posted a revised Paycheck Protection Program (PPP) forgiveness application as mandated by the PPP Flexibility Act.

  • SBA also published a new “EZ version” of the forgiveness application that applies to borrowers that: (1) are self-employed and have no employees; or (2) did not reduce the salaries or wages of their employees by more than 25 percent, nor the number of hours for their employees; or (3) experienced reductions in business activity as a result of of the pandemic, and did not reduce the salaries or wages of their employees by more than 25 percent.

— HOUSE CORONAVIRUS TASK FORCE LAUNCHES INVESTIGATION INTO COVID-19 DEATHS IN NURSING HOMES. The House Select Subcommittee on the Coronavirus Crisis officially launched an investigation into COVID-19 deaths in nursing homes. Click here to read the letter to the CMS.

— SBA REOPENS EIDL AND EIDL ADVANCE PROGRAM. The SBA announced that it has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19.

— FEDERAL RESERVE TO EXPAND MAIN STREET LENDING PROGRAM TO NONPROFITS. The Federal Reserve announced it will be seeking feedback on a proposal to expand the Main Street Lending Program for nonprofit organizations.

  • The proposal would make loans available to 501(c)(3) and 501(c)(19) organizations with 50 to 15,000 employees, but 501(c)(6)s and nonprofits with endowments larger than $3 billion would not be eligible under the program.

— HHS ANNOUNCES $25 BILLION IN RELIEF FUNDING FOR MEDICAID PROVIDERS, SAFETY NET HOSPITALS. HHS announced the allocation of $25 billion from the Provider Relief Fund, including $15 billion for Medicaid and CHIP providers, as well as $10 billion for safety net hospitals. TRP’s comprehensive analysis of the COVID-19 provider relief fund can be read here.

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