COVID-19 Update | Saturday, March 21 (PM)
March 21, 2020
- Larry Kudlow today indicated that the current stimulus package being negotiated could exceed 10 percent of GDP, or $2 trillion.
- The Federal Reserve will now start letting banks access cheap loans by pledging short-term, highly rated municipal debt as collateral.
- The Food and Drug Administration has approved the first test that can be conducted entirely at the point of care and will deliver results in about 45 minutes.
- Senate Republicans and Democrats continued to negotiate the third COVID-19 relief package throughout the day today.
- Republican and Democratic Task Forces continue to negotiate specific relief issues.
- Senate Majority Leader Mitch McConnell gave negotiators a 5pm deadline to come to an agreement, and both sides acknowledge they are close to an agreement. Conversations have indicated that the tax provisions, including tax deferral, deferral of quarterly tax payments, Net Operating Losses carryback, and others, appear to be getting pared back.
- Significant unresolved issues include increased unemployment insurance payments, significant financial assistance for hospitals and health-care providers to treat coronavirus victims, and a proposed ‘State Stabilization Fund.’
- The form of relief for the transportation sector, including airlines, airports, transit, and others are still being negotiated.
- Senate Majority Whip John Thune (R-SD) indicated on Saturday that airlines were more likely to receive loans and loan guarantees, as included in the initial draft legislation, rather than direct federal grants.
- Senator Mitt Romney (R-UT) today introduced legislation that would allow recent college graduates entering the job market amid the COVID-19 outbreak to defer federal student loan payments for up to three years. This deferment would apply to graduates at any time in 2020. Under the bill, the Department of Education would have the authority to continue the program for graduates in 2021 and 2022 if it determined that the economic circumstances warranted. It is unclear whether this legislation has been included in the Phase 3 stimulus package being negotiated in the Senate. The initial version of the Phase 3 package did however include language to postpone federal student loan payments interest-free for up to six months.
- Senate Democrats have argued that these loan deferments do not go far enough and Senate Minority Leader Chuck Schumer (D-NY) has floated a plan to cancel the monthly payments during the national emergency and guarantee that each borrower receives at least $10,000 worth of debt relief in total.
- Relief for other parts of the travel and tourism industry will be available through the Department of the Treasury and the Small Business Administration and there is no indication at this time that direct federal grants for others in the travel and tourism industry are being considered.
- A procedural vote is expected in the Senate tomorrow and 60 votes will be necessary to continue the work on the bill.
- All signs indicate there will be a fourth relief package.
- Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) released a set of principles for aviation jobs rescue legislation, which includes:
- $37 billion in grants to employees of mainline, regional, and cargo airlines, saving 750,000 jobs.
- $3 billion in grants to employees of ground support and catering contractors, saving 210,000 jobs.
- $21 billion in unsecured loans to air carriers.
- Totaling $61 billion in airline worker relief saving at least 960,000 jobs.
- $10 billion in direct grants to commercial-service airports, saving approximately 1.2 million jobs, in an effort to rescue airports from insolvency and protect airport workers.
- The principles also include:
- Conditions to ensure accountability, integrity, and oversight by ensuring taxpayers benefit from the deal and airlines remain accountable to the American public.
- Conditions to protect more than 2.1 million airline and airport workers.
- Require the use of direct assistance to protect employees’ health, pay, and benefits.
- Protect furloughed airline and airport workers.
- Provide health care and sick leave to airline and airport workers.
- Provide protections to workers in the event of a bankruptcy.
- Require airlines to remain neutral in any communications with employees with respect to any union organizing campaign.
- Protections for consumers.
- Transparency of airline profits made from ancillary fees.
- Preservation of small community air service.
- Efforts to mitigate climate change.
- General Motors has entered into a partnership with Ventec Life Systems to start manufacturing ventilators.
- Airline executives and trade association Airlines for America sent a letter to Congress today urging them to continue to move expeditiously to pass a bipartisan proposal that includes a combination of worker payroll protection grants, loans and loan guarantees and tax measures.
- There are calls for the Tokyo Olympics to be postponed to 2021, but the President has indicated he will leave it up to Japan, the host country.
- There were 793 deaths reported in Italy in the past 24 hours due to COVID-19.
- Officials in New Jersey and Connecticut have ordered residents to stay at home, which some exceptions.
- Vice President Pence and his wife will be tested for COVID-19 after a member of the Vice President’s staff tested positive.