Quick Takes
— DEMOCRATS INTRODUCE SWEEPING POLICE REFORM BILL. Congressional Democrats proposed a sweeping overhaul of police oversight and procedures on Monday in response to the deaths of black Americans at the hands of law enforcement.
— CONSERVATION BILL CLEARS ONE SENATE HURDLE, BUT MORE REMAIN. Republicans who voted for cloture Monday said they’d be pushing for changes to the measure in the coming days.
— TRUMP OPEN TO ANOTHER CORONAVIRUS RELIEF PACKAGE. While House Press Secretary Kayleigh McEnany said the President is open to another round of relief aid yesterday.
— SBA, TREASURY SET TO ISSUE NEW GUIDANCE ON PPP FLEXIBILITY. The agencies will “promptly” issue new rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the provisions of H.R. 7010.
Capitol Hill Update
— DEMOCRATS INTRODUCE SWEEPING POLICE REFORM BILL. House and Senate Democrats introduced a sweeping package (text; summary) of policing legislation yesterday in response to the recent wave of protests against police brutality across the country. 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. Lawmakers on the House Judiciary Committee plan to hold hearings and markups on the bill in the coming weeks, with the goal of consideration on the floor by month’s end. While GOP lawmakers have expressed open-mindedness with respect to certain policing reforms in the wake of these protests, it remains to be seen whether the two sides can coalesce behind a comprehensive proposal.
— SENATE PICKS UP CONSIDERATION OF PUBLIC LANDS PACKAGE. The Senate will reconvene today to resume consideration of the bipartisan public lands bill. The bill would permanently fund the Land and Water Conservation Fund (LWCF), while also addressing billions of dollars in deferred maintenance backlogs on existing public lands and national parks. In addition to consideration of The Great American Outdoors Act, senators will vote on Gen. Charles Brown’s nomination to be Chief of Staff for the U.S. Air Force.
Washington Insider: What We’re Reading
An outdoor bill championed by Sen. Cory Gardner (R-CO) cleared a procedural hurdle Monday even as opponents in his own party say they have not yet decided if they can support the measure. The bill has broad bipartisan support. Democrats are among 58 cosponsors and a House companion measure is sponsored by Democrats. Still, a number of Republicans, especially from oil states, are pushing back over revenue sharing and land acquisition provisions. Some of those Republicans who voted for cloture Monday said they’d be pushing for changes to the measure in the coming days.
President Donald Trump is open to another economic relief package in response to the coronavirus pandemic and remains in favor of a payroll tax holiday, White House spokeswoman Kayleigh McEnany said on Monday. “There are several things he wants, a payroll tax holiday was one of them, because that directly advantages low-income workers,” McEnany said at a media briefing.
Sen. Elizabeth Warren (D-MA) is urging a top federal bank regulator to scrap a controversial rewrite of anti-redlining regulation released by his predecessor last month and recuse himself from any attempt to issue new rules. In a letter to Acting Comptroller of the Currency Brian Brooks released Tuesday, the senator called on the agency to withdraw new rules for banks to follow under the Community Reinvestment Act (CRA), a 1977 law intended to ensure that banks lend to and serve low-income and majority-minority areas.
A U.S. Senate report released Tuesday says the U.S. government failed to properly oversee Chinese-owned telecommunications companies for nearly two decades. The report from the Senate’s Permanent Subcommittee on Investigations says the U.S. government “provided little-to-no oversight of Chinese state-owned telecommunications carriers operating in the United States for nearly twenty years.” It faulted the Federal Communications Commission (FCC) and “Team Telecom” – an informal group comprised of officials from the Justice, Homeland Security, and Defense Departments – in their oversight of China Telecom (Americas) Corp 728.HK, China Unicom (Americas) (0762.HK), and Pacific Networks Corp, which all received FCC approval for U.S. operations about two decades ago.
COVID-19: What We’re Hearing
— ‘CARES 2.0’ STATE OF PLAY. While Leader McConnell 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 last week. 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:
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.
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.
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.
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.
— APPROPRIATIONS UPDATE. As the COVID-19 pandemic continues to upend the Congressional schedule, lawmakers are adjusting their expectations for consideration of fiscal year (FY) 2020 spending bills.
House. In a “Dear Colleague” letter to Members on the House Appropriations Committee last week, Chairwoman Nita Lowey (D-NY) provided an overview of the Committee’s plan of attack for addressing fiscal year (FY) 2021 spending bills next month.
Appropriators will hold subcommittee and full committee markups on funding bills during the weeks of Jul. 6 and Jul. 13, with floor consideration likely occurring the weeks of Jul. 20 and Jul. 27, according to Chairwoman Lowey. She also plans to offer additional details on the schedule — as well as the specific order in which the bills will be considered — later this month.
Senate. Senate Appropriations Chairman Richard C. Shelby (R-AL) indicated that his committee tentatively plans to mark up begin marking up spending bills during the third week of June.
COVID-19 Legislative & Regulatory Trackers
NEW TODAY…
— SBA, TREASURY SET TO ISSUE NEW GUIDANCE ON PPP FLEXIBILITY. Following the enactment of the Paycheck Protection Program Flexibility Act, The Small Business Administration (SBA) and Treasury Department issued a statement yesterday detailing some forthcoming steps the agencies will be taking. SBA and Treasury will “promptly” issue new rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the provisions of H.R. 7010.
— FEDERAL RESERVE EXPANDS MID-SIZE LENDING FACILITY. The Federal Reserve announced an expansion of the central bank’s lending facility for midsized businesses, notably increasing the minimum loan amount to $250,000 from $500,000.
RECENT DEVELOPMENTS…
— TRUMP ISSUES EXECUTIVE ORDER SEEKING TO SPUR ACTION ON INFRASTRUCTURE PROJECTS. The Trump administration issued an executive order last week calling on federal agencies to waive certain environmental and permitting requirements to expedite construction of highways and other energy infrastructure projects on federal lands.
— IRS EASES OPPORTUNITY ZONE REQUIREMENTS. The IRS announced last week that it will ease some of the requirements for the Opportunity Zone program to give taxpayers more time to meet specific deadlines due to the COVID-19 public health emergency. Click here to read the guidance in its entirety.
— FEDERAL RESERVE EXPANDS MUNICIPAL LENDING FACILITY. The Federal Reserve announced that it is expanding the scope of cities that will be able to borrow money through its emergency program for state and local governments. This expansion will allow at least two cities or counties in every state to be eligible, regardless of population.
— BIPARTISAN COMMITTEE LEADERS PRESS HHS ON PROVIDER FUNDING. The Chairs and Ranking Members of the House Energy & Commerce Committee and the Senate Finance Committee wrote to Department of Health and Human Services (HHS) Secretary Alex Azar yesterday demanding a timeline for paying out the remainder of the $175 billion in COVID-19 funds that Congress appropriated months ago.
— HHS AMENDS PREP ACT DECLARATION. HHS issued an amendment to its existing PREP Act declaration clarifying that covered countermeasures under the Declaration include qualified products that limit the harm COVID-19 might otherwise cause.
— HHS ISSUES RFI ON HEALTH CARE SYSTEM ‘RESILIENCE.’ HHS’ Office of the Assistant Secretary for Health (OASH) published a request for information on opportunities to strengthen the U.S. healthcare system over the long-term term, including policies and programs that can be improved to mitigate the risk of COVID-19 and avoid negative impacts on patient outcomes.
— HHS ANNOUNCES $250 MILLION TO SUPPORT HEALTH CARE SYSTEMS RESPONDING TO COVID-19. The Department of Health and Human Services Office of the Assistant Secretary for Preparedness and Response (HHS ASPR) announced it is allocating $250 million to aid U.S. health care systems treating patients and responding to the COVID-19 pandemic.
This tranche of funding from the Hospital Preparedness Program seeks to support hospitals and other health care entities to train workforces, expand telemedicine and the use of virtual healthcare, procure supplies and equipment, and coordinate effectively across regional, state and jurisdictional, and local health care facilities to respond to COVID-19.
— CMS OUTLINES CHANGES TO CMMI MODELS DURING PUBLIC HEALTH EMERGENCY. CMS published a “flexibilities table” that shows the changes the agency has made or will be making to Innovation Center models in response to the COVID-19 public health emergency.
AS PREVIOUSLY REPORTED…
— PPP FLEXIBILITY ACT. President Donald Trump signed a bill giving PPP recipients more time and flexibility in using their loans. Click here to read TRP’s analysis of this legislation.
— HEROES ACT. The House passed the Democrats’ sweeping $3 trillion HEROES Act following weeks of intraparty negotiations and assessments of current COVID-19 response efforts. The bill is considered dead-on-arrival in the GOP-controlled Senate and White House. TRP’s comprehensive analysis of this legislation can be read here.
As written, the bill would represent the largest federal response to the COVID-19 pandemic to date, with provisions that would provide another round of direct payments to individuals and families, additional funding for health care providers and COVID-19 testing, as well as nearly $1 trillion in aid to state and local governments.
— LEGISLATIVE RESPONSE. TRP has published several in-depth policy memos that analyze actions that Congress and the federal government have taken to address the COVID-19 outbreak. Click here for the full list of memos.
Phase I. An $8.3 billion emergency supplemental appropriations bill cleared both chambers and was signed into law on Mar. 6. TRP’s analysis of the Phase I legislation can be read here.
Phase II. The Phase II legislative response bill was signed into law on Mar. 18. TRP’s full analysis of the Phase II bill can be read here.
Phase III. The CARES Act was signed into law on Mar. 27. TRP’s analysis of the Phase III legislation can be read here.
Phase 3.5. President Donald Trump signed the $483.4 billion “COVID-19 Phase 3.5” bill into law on Apr. 24. TRP’s comprehensive analysis of the Phase 3.5 legislation can be read here.
— SMALL BUSINESSES. TRP’s comprehensive analysis of the small business provisions contained in COVID-19 response bills can be read here.
PPP. SBA and Treasury Department have taken a piecemeal approach to implementing the PPP. While conducted with the aim of getting the emergency program up and running as quickly as possible, the government’s process of issuing FAQs and guidance as the program runs has created uncertainty in certain areas.
The loan application form can be accessed here.
On May 22, the agencies published a much-anticipated interim final rule on the PPP forgiveness process. That rule can be found here and the forgiveness application can be found here.
The SBA and Treasury Department updated their running list of frequently asked questions on the PPP (May 27).
SBA provided an update on its PPP loan data, as well as an updated state-by-state breakdown.
SBA issued guidance on how to calculate PPP loans by business type.
SBA published a list of all lenders participating in the PPP.
SBA issued an interim final rule clarifying the process of applying for PPP loans for individuals who report self-employed income on a 1040 Schedule C.
CDFI. SBA and Treasury Department announced they will set aside $10 billion in PPP funding for Community Development Financial Institutions (CDFI).
EIDL. Following overwhelming demand for Economic Injury Disaster Loans (EIDL) and accompanying $10,000 grants, SBA has limited eligibility for the program to agricultural businesses.
— FEDERAL RESERVE. Among other actions intended to mitigate an economic meltdown, the Fed has established 11 lending facilities intended to support the flow of credit to households, businesses, and municipalities. Many of these facilities are backed by Treasury funds provided under the CARES Act.
Open Market Operations. At the onset of the pandemic, the Federal Open Market Committee (FOMC) lowered interest rates to 0-.25 percent in an effort to spur economic activity. Fed Chairman Jerome Powell, however, has indicated that the Fed is unlikely to pursue negative interest rates. The Fed is continuing to purchase Treasuries and mortgage-backed securities (MBS) with the aim of reducing strain on the financial sector.
Main Street Lending Program. The Main Street Lending Program supports lending to small- and medium-sized businesses through the purchase of eligible commercial loans. More information on the program can be found here.
Term Asset-Backed Securities Loan Facility (TALF). First created to deal with the liquidity crisis in the Asset-backed Securities (ABS) market in 2008-09, the Fed recently recreated this program to respond to COVID-19. Similar to the first version, TALF will allow issuers of ABS to effectively sell into a Fed backed Special Purpose Vehicle. More information on the program can be found here.
Municipal Liquidity Facility (MLF). The Fed will purchase up to $500 billion in state and local debt with the intention of supporting cash-strapped municipal governments’ access to liquidity. More information on the program can be found here.
Primary and Secondary Market Corporate Credit Facilities. The Fed will make loans to and purchase the bonds of investment-grade larger companies through two corporate credit facilities. More information on the program can be found here.
Financial Markets. In addition to the above actions intended to support the flow of credit in the economy, the central bank has established several other facilities intended to facilitate the continued functioning of commercial paper markets, money markets, and primary dealer markets.
— TREASURY. The Treasury Department updated its list of frequently asked questions that provide examples of eligible and ineligible expenditures of the state, local, and tribal Coronavirus Relief Fund on May 28. TRP’s analysis of these new FAQs can be read here.
CRF. The Treasury Department released a list of the payments that have been made to states and qualifying localities through the Coronavirus Relief Fund.
Employee Retention Credit. The Treasury Department has released a list of frequently asked questions pertaining to the Employee Retention Credit.
— OVERSIGHT. The Congressional Oversight Commission has issued its first report outlining how it will review the Treasury Department and Federal Reserve’s efforts to implement Subtitle A of the CARES Act. This will include an analysis of the lending programs and facilities designed for businesses and municipalities.
— EO ON DEREGULATION. The Trump administration issued an executive order calling on agencies to target regulations “that may inhibit economic recovery” during the COVID-19 pandemic. Click here to read TRP’s analysis of this order.
— IRS. The Internal Revenue Service (IRS) published a list of frequently asked questions on COVID-related relief for retirement plans and IRAs (May 4).
— HHS. Among key initiatives led by the Department of Health and Human Services (HHS) at large:
Testing. The Trump administration published a report on its national COVID-19 testing strategy as mandated by the “Phase 3.5” measure.
HHS and the Health Resources and Services Administration (HRSA) allocated $225 million to Rural Health Clinics provided by the “Phase 3.5” legislation to bolster COVID-19 testing (May 20).
Drug Manufacturing. HHS and the Biomedical Advanced Research and Development Authority (BARDA) announced a $628 million contract with Emergent BioSolutions to advance manufacturing capabilities and capacity COVID-19 vaccines and therapeutics (Jun. 1).
HHS and the BARDA announced a four-year, $354 million agreement with Phlow Corporation aimed at expanding U.S.-based pharmaceutical manufacturing for COVID-19 response (May 20). TRP’s analysis of the agreement can be read here.
Drug Development. The Trump administration announced a framework and leadership for “Operation Warp Speed“— a national program aimed at accelerating the development, manufacturing, and distribution of COVID-19 diagnostics, treatments, and vaccines (May 15).
Workforce, Telehealth. HHS and HRSA awarded $15 million in grant funding to 159 organizations across five health workforce programs to bolster telehealth capabilities in response to the COVID-19 pandemic (May 13).
— MEDICARE AND MEDICAID. The Centers for Medicare and Medicaid Services (CMS) has offered a series of regulatory flexibilities and guidances:
State Fact Sheet. CMS published a fact sheet for state and local governments that outlines how these entities can seek payment for care in alternate care sites through CMS programs (May 26).
State COVID Guidance. CMS issued guidance to states on COVID-19 survey activities, CARES Act funding, enhanced enforcement for infection control deficiencies, and quality improvement activities in nursing homes.
Nursing Homes. CMS released guidance (press release) for state and local officials on reopening nursing homes which corresponds to the broader administration phases for opening up the U.S. (May 18).
CMS unveiled enforcement actions for nursing homes based on early trends in the most recent data regarding incidence of COVID-19 in residential care facilities. The enhanced enforcement targets facilities with persistent infection control violations, and CMS will also enforce lower-level violations to ensure greater attention to infection control practices (Jun. 1).
CMS published its first set of COVID-19 nursing home data and results from inspections conducted by the agency since Mar. 4, 2020 (May 31)
1135 Waivers. A full list of the 1135 waiver approval letters can be accessed here (Updated Jun. 1).
Medicaid Guidance. CMS released a new CMCS Informational Bulletin that provides states with guidance on how to temporarily modify certain provider payment methodologies and capitation rates under their Medicaid managed care contracts during the public health emergency (May 14).
MA Plan FAQs. CMS updated its list frequently asked questions related to the public health emergency for Medicare Advantages plans (May 13).
Interim Final Rule. CMS issued an interim final rule with comment period and blanket waivers under Section 1135 of the Social Security Act. These new flexibilities provide for Medicare coverage of serology tests, new coverage for services provided by pharmacists, and a waiver of the limitation on the types of practitioners that may furnish Medicare telehealth services (May 8).
Medicaid, CHIP FAQs. CMS published a tranche of frequently asked questions for state Medicaid and CHIP programs regarding COVID-19 response efforts (May 5).
— HEALTH CARE PROVIDER FUNDING. TRP’s comprehensive analysis of these distributions can be read here.
Website. HHS has updated its webpage outlining details on provider relief and related health funding.
Click here for a list of extensive frequently asked questions on the fund (updated May 26).
Click here for a detailed overview on all of the COVID-related provider funding
PHSSEF Distributions. To date, HHS is providing a $50 billion general allocation for Medicare hospitals and providers, $10 billion for hospitals in highly impacted areas, $10 billion for rural providers, $500 million for the Indian Health Service, and $4.9 billion for skilled nursing facilities. It also establishes a program to fund COVID-19 care for the uninsured. Additionally, HHS cited providers who will receive further, separate funding, including dentists and providers that solely take Medicaid.
Compliance. HHS announced on May 22 that it would allow providers eligible to receive provider relief funding from the CARES Act an additional 45 days to accept the Terms & Conditions for such payments. Providers will now have a total of 90 days from receipt of payment to make the attestation to HHS.
— FDA. The Food and Drug Administration (FDA) has published several guidance documents related to drugs being developed for COVID-19, compounding, medical devices, and the supply chain.
Testing. FDA posted a list of antibody tests that are being removed from the “notification list” of tests being offered under the Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency (updated Jun. 2).
Compounding. FDA issued guidance to temporarily allow pharmacies to compound drugs for hospitalized COVID-19 patients that are essentially copies of commercially-available drugs or provide such drugs to a hospital without a patient-specific prescription when certain conditions are met (Updated May 21).
It also issued guidance to temporarily allow outsourcing facilities to compound a drug that is essentially a copy of an approved drug, use a bulk drug substance not on the 503B list, and not meet certain stability testing and expiration date requirements when certain conditions are met (Updated May 21).
Drug Development. FDA published guidance documents related to drugs being developed for COVID-19.
The first guidance document provides general recommendations to sponsors to help prepare them for pre-investigational new drug application (pre-IND) meeting requests for COVID-19 related drugs (May).
The second guidance document is intended to assist sponsors in the clinical development of drugs for treating or preventing COVID-19 (May).
Supply Chain Exemptions. FDA issued guidance outlining an exemption and exclusion from certain requirements of the Drug Supply Chain Security Act during the public health emergency (Updated May 11).
Antigen Test. FDA issued an emergency use authorization for the first COVID-19 antigen test (May 8).
Device Shortages. FDA published guidance on reporting requirements for medical device shortages (May).
Remdesivir. FDA issued an emergency use authorization for the antiviral Remdesivir (May 1).
— CDC. The Centers for Disease Control and Prevention (CDC) published detailed guidelines for reopening schools and businesses that have been shut down amid the COVID-19 outbreak.
CDC published guidance documents that offer decision-making tools for reopening schools, workplaces, child care programs, mass transit systems, bars and restaurants, as well as youth programs and camps.
— SAMHSA. The Substance Abuse and Mental Health Services Administration (SAMHSA) awarded grant funding to increase access and improve the quality of community mental and substance use disorder (SUD) treatment services through the expansion of Certified Community Behavioral Health Clinics (CCBHC) (Apr. 27).
SAMHSA released $15 million in supplemental grant awards for tribal COVID-19 behavioral health response (May 1)
— NIH. National Institutes of Health (NIH) launched a study to investigate whether the COVID-19 pandemic has resulted in pregnancy-related health issues. The agency plans to incorporate this data into broader registry on how COVID-19 impacts maternal health.
The National Institutes of Health issued its first guidance on COVID-19 treatment options that are currently under review (updated May 12).
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