COVID-19 Update | Tuesday, April 21
April 21, 2020
- The Senate passed additional funding for CARES Act programs today, titled the Paycheck Protection Program Increase Act of 2020. The bill totals $484 billion and was passed by voice vote this afternoon. A few additional details are below:
- Small Business Assistance
- $321 billion was included in the deal for the oversubscribed Paycheck Protection Program (PPP). $60 billion from this total will be dedicated solely to community-based financial institutions to help target underserved communities.
- $50 billion was allocated for the Disaster Loans Program and $10 billion was allocated for the Emergency Economic Injury Disaster (EIDL) grants.
- The Small Business Administration (SBA) also received $2 billion to continue to provide salaries and expenses for its employees.
- The Department of Health and Human Services (HHS)
- HHS received $100 billion on top of the previous $100 billion in the CARES Act, including $75 billion for hospitals to cover unanticipated expenses, and $25 billion for COVID-19 testing.
- The bill also includes $1 billion for the Centers for Disease Control and Prevention (CDC), $1.8 billion for the National Institutes of Health, $22 million for the Food and Drug Administration (FDA), $825 million for community health centers and rural health clinics, and $1 billion to cover testing costs for the uninsured.
- We expect the House to take up and pass the measure on Thursday, but Rep. Thomas Massie (R-KY), as reported last night, may object to passage by unanimous vote.
- Small Business Assistance
- Appreciably, businesses are looking to understand what the next relief/stimulus package is going to include. From Elevate’s perspective, there is still no agreement on what will be considered. The next package could take the form of another, larger CARES Act-type relief measure, and/or could pivot towards stimulating the economy by investing in infrastructure or other mechanisms aimed at recovery. Both the Democrats and the President have indicated that the next piece of legislation should include stimulus-like provisions including infrastructure.
- Additionally, Democrats will be seeking a big package for the Supplemental Nutrition Assistance Program (SNAP) and other safety net programs and have indicated that a transformative set of measures is needed. To date, House committees continue to solicit suggestions, while awaiting instructions on how best to proceed.
- Congressional Republicans have not been as forward leaning on the next package.
- Factors to watch are unemployment, how the economies of states that reopen are impacted, and COVID-19 numbers across the country, with a focus on those states that have eased social distancing requirements.
- Legislation is not likely to surface until Congress returns in mid-May.
- As referenced earlier today, House Majority Leader Steny Hoyer (D-MD) announced that a temporary rule change to allow for limited proxy voting during the pandemic would be on the docket for the House’s Thursday session in addition to passage of the COVID-19 relief package passed by the Senate today.
- House Democratic leadership has indicated support for the rule change, but the House Republicans have not yet voiced support. Leader Hoyer is also pushing for full remote voting and hearing capabilities to be instituted as explained in his letter to House Rules Chairman Jim McGovern (D-MA) and House Administration Chairwoman Zoe Lofgren (D-CA). The full letter can be found here.
- The legislative language of the CARES Act tied the authorization of funding for the SBA’s existing 7(a) loan program to the PPP, set to expire on June 30. This could have the unintended consequence of freezing the 7(a) program if funding for the PPP runs out again. Lawmakers did not include a remedy for this in the legislation passed by the Senate on Tuesday.
- Senate Commerce Committee Chairman Roger Wicker (R-MS) wrote to industry trade groups, as well as the National Governors’ Association, to solicit feedback on how the one-year REAL ID deadline extension can be utilized to improve readiness for REAL ID compliance.
- Senators Tom Carper (D-DE) and Pat Toomey (R-PA) sent a letter to United States Trade Representative (USTR) Robert Lighthizer to suspend tariffs on Chinese products identified as necessary inputs for the production of medical supplies and equipment. The full letter can be found here.
- The Senate Environment and Public Works Committee today released draft Water Resources Development Act (WRDA) legislation, which is generally passed biennially. The legislation was released as two bills, one focusing on drinking water and other clean water provisions and the other focusing on the U.S. Army Corps of Engineers’ (USACE) portion of WRDA.
- Our intelligence suggests that the drinking and clean water provisions could be included on a future COVID-19 relief package, while the USACE provisions will be passed later following a more traditional schedule.
- This later passage for the USACE provisions is, at least in part, tied to a desire to include additional projects’ signed Chief’s Reports allowing work to progress and not be delayed an additional two years for the next WRDA.
- The committee’s press release, in addition to draft legislative text, section by sections, and a summary of the legislation, can be found here.
- President Trump indicated that the Administration will provide financial relief for the oil industry, which has seen record low, and even negative, prices for crude oil due to the COVID-19 shutdown. Currently, no further details are available about what form this relief would take and what amount would be provided. Should the President attempt to formally propose relief, we expect it will face opposition from some members of the House and Senate.
- The immigration suspension that President Trump tweeted last night, while still being finalized, is expected to apply to individuals seeking permanent residency, or green card seekers. The President stated at tonight’s briefing that additional immigration measures may be considered in the future as the country seeks to reopen its industries that have been shut down to stop the COVID-19 spread. The order is expected to be in place for 60 days.
- Additionally, there will be exemptions for seasonal farmworker visas, healthcare, research, and medical professionals, as well as for nuclear family members, making the restriction less impactful than initially thought. Notably, the Administration is expected to continue processing visas for temporary workers, the biggest current source of immigration.
- The Treasury Department announced Monday night that it had finalized agreements with Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines, and a number of other air carriers for relief under the payroll support program created in the CARES Act.
- Treasury also announced that $2.9 billion in initial payments under the program had been disbursed to two major airlines and 54 smaller passenger air carriers. Reports indicate that the two major airlines are Delta and Allegiant.
- In a telephone call, President Trump and United Kingdom Prime Minister Boris Johnson agreed to a coordinated response to the COVID-19 crisis and reopening.
- Treasury Secretary Steven Mnuchin indicated that firms which received money from the PPP but did not qualify were to pay back the loan immediately, or face grave consequences including liability to the SBA and the Department of Treasury.
- Secretary Mnuchin also indicated that he expected the Paycheck Protection Program Increase Act of 2020 would be the last funds necessary for the PPP program, but left room for additional funds should things change.
- Federal Register Notices
- SBA posted a rule today expanding eligibility of the PPP to individuals that are self-employed and file a Form 1040, Schedule C, which can be found here.
- HHS issued a notice today that they will not impose penalties for noncompliance with the regulatory requirements under the Health Insurance Portability and Accountability Act (HIPPA) rules against covered health care providers in connection with the good faith provision of telehealth during the COVID-19 nationwide public health emergency. The notice can be found here.
- The National Credit Union Administration is “temporarily raising the maximum aggregate amount of loan participations that a Federally Insured Credit Union (FICU) may purchase from a single originating lender to the greater of $5,000,000 or 200 percent of the FICU’s net worth. The Board is also temporarily suspending limitations on the eligible obligations that a Federal Credit Union (FCU) may purchase and hold.” These are actions to support lending related to the COVID-19 pandemic. The notice can be found here.
- The Environmental Protection Agency and the Department of the Army published a final rule defining the scope of waters federally regulated under the Clean Water Act. The full notice can be found here.
- The National Association of Manufacturers has requested new tax credits to incentivize manufacturers to repatriate their operations and invest in capital equipment to help boost the economy and the labor market.
- A new report from the Association of Unmanned Systems International (AUVSI) found that 4,000 drone operators in all 50 states have been granted waivers to operate beyond existing regulations under Part 107 of Title 14 of the Code of Federal Regulations, as drone operators have been assisting in COVID-19 response. Around 20 percent of the waivers were given to first responders. The full report can be accessed here.