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COVID-19 Update | Monday, Aug. 3 (AM)

August 3, 2020

Congress

The Senate is in session. The House is not. House lawmakers remain in Washington, D.C. to vote on a potential COVID-19 relief package.

COVID-19 Relief Negotiations

  • House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) met with White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin over the weekend to continue negotiations on the next COVID-19 relief package.
    • There is no indication that significant progress has been made. As the self-imposed deadline of August 7 looms at the end of this week, negotiations could shift to Speaker Pelosi and Senate Majority Leader Mitch McConnell (R-KY) to craft a deal and push the White House to sign off on it.
    • Major points of disagreement continue to be funds for state and local governments (a Democratic priority), liability protections (a Republican priority), and the structure of enhanced unemployment benefits.
  • Relief for remote workers in the next COVID-19 package remains a part of the conversation. It is possible that a bill that would limit states’ ability to tax workers who became temporary residents because of the COVID-19 pandemic could be included in the next package. The bill/idea is being pushed by Senate Majority Whip John Thune (R-SD), but has received some pushback from Minority Leader Schumer.
  • President Trump again signaled his support for a payroll tax cut in the next COVID-19 relief package over the weekend. As a reminder, the idea has a lack of support on both sides of the aisle in Congress.
    • A Wall Street Journal editorial was posted over the weekend on the issue and how the President could possibly implement it without the help of Congress, citing that the Treasury Department has the same authority to stop collecting the payroll tax.

Senate

  • Senate Energy and Natural Resources Committee Ranking Member Joe Manchin (D-WV) called on the Administration to reject key water permits for the Pebble Mine project in Alaska over concerns regarding the potential impacts of the mine on the Bristol Bay salmon fishery. Chairwoman Lisa Murkowski (R-AK) has not yet weighed in on building the mine, although she has expressed concerns over the potential impacts on the Bristol Bay salmon fishery.
  • A bipartisan group of 61 Senators sent a letter to U.S. Trade Representative (USTR) Robert Lighthizer and Agriculture Secretary Sonny Perdue urging them to make it a “core” trade policy objective to strike trade deals that allow U.S. dairy producers to sell their products using common names that originated in Europe. The letter, which was led by Senate Majority Whip John Thune (R-SD) and Senator Debbie Stabenow (D-MI), can be found here.

House

  • House Natural Resources Committee Chairman Raul Grijalva (D-AZ) tested positive for COVID-19, becoming the tenth lawmaker to test positive. There still is no comprehensive plan for testing lawmakers at the Capitol.
  • House Judiciary Antitrust Chairman David Cicilline (D-RI), and other members of the House Judiciary Antitrust Subcommittee, took part in an interview on Friday on their ongoing tech probe. During the interview, Rep. Cicilline shared that the final report from the House Judiciary Committee’s major investigation into technology companies is likely to include proposals on legislation to update the antitrust laws, set regulations for digital platforms, and increase staffing and funding for the two agencies that oversee competition. Rep. Cicilline also signaled his hope to get “broad buy-in from both sides” on the recommendations.

Administration

  • President Trump is expected to sign an Executive Order on “hiring American” today and is expected to sign H.R. 1957, the Great American Outdoors Act. We will provide an update on both of these items in our evening update.
  • President Trump announced plans on Friday to ban TikTok from the U.S. after Administration officials claimed that TikTok’s parent company, ByteDance, poses a national security threat.
    • Microsoft signaled an intent to continue negotiations to potentially buy the U.S. operations of TikTok in a blog post Sunday and announced plans to complete negotiations by September 15.
    • On Saturday, TikTok users received a message from the company’s U.S. General Manager, Vanessa Pappas, who stated, “we’ve heard your outpouring of support, and we want to say thank you; we’re not planning on going anywhere.”
    • Experts are saying that President Trump’s move to ban TikTok would have an element of reciprocity because U.S. internet companies like Google, Facebook, Twitter, LinkedIn, Hulu, Foursquare and Dropbox are blocked from operating in China.
      • According to the Internet Association, approximately 3,000 internet sites are totally blocked from the Chinese marketplace, including many of the most popular websites in the world.
  • Retired Brigadier General Anthony Tata has been designated as “the official performing the duties of Deputy Undersecretary of Defense for Policy.” As a reminder, Tata’s confirmation hearing to become Undersecretary for Policy was cancelled in the Senate last week and he withdrew his nomination for the position on Sunday. This designation allows Tata to serve in the Deputy Undersecretary role temporarily without being Senate confirmed.
  • The United Kingdom (U.K.) and the U.S. will continue their third round of trade negotiations this week, though the results of the upcoming election in November could significantly impact whether a deal is reached in the near term given the potential for a new Administration.
  • The Food and Drug Administration (FDA) announced that chemical manufacturers have voluntarily agreed to phase out the use of certain per- and polyfluoroalkyl substances (PFAS) in fast food, wrappers, pizza boxes and other food packaging.
  • The Internal Revenue Service (IRS) announced that it will soon start sending stimulus payments to people originally told they would have to wait. The Treasury Department issued new rules aimed at stopping efforts to avoid new carried interest limits.
  • The U.S. Army Corps of Engineers, Bureau of Reclamation, and Bonneville Power Association recommended that additional water be spilled over hydropower dams in the Columbia River System in order to benefit the salmon population. The recommendations were made in a Final Environmental Impact Statement issued Friday.
  • The Department of Transportation’s (DOT) Inspector General released a new report showing that as the Federal Aviation Administration (FAA) updates its En Route Automation Modernization (ERAM) system, it is struggling to provide “full benefits for airspace users.”
  • Transportation Security Administration (TSA) Administrator David Pekoske announced to employees on Friday that Patricia Cogswell, Acting Deputy Administrator was retiring. He thanked her for 24 years of federal service, including the past two as his second-in-command at the agency. As a reminder, President Trump recently announced he would appoint Michael Miklos to replace her.
  • The Federal Communications Commission (FCC) on Friday gave Native American tribes an extra 30 days to seek licenses of 2.5 GHz airwaves following weeks of pressure to extend the special tribal priority window.
  • The upcoming monthly Commerce Department trade report is expected to show significantly decreased import and export numbers compared to June 2019, which saw exports at $135.5B and imports at $210.8B. The lower numbers this year are due to the ongoing COVID-19 pandemic, but experts say there is a positive element – exports of U.S. goods, after falling continuously since February, actually increased in June to $102.6B. Also, imports of U.S. goods, which have been on a decline since December, also rose to $173.3B.
    • For the first half of the year, U.S. goods exports fell nearly 17% and goods imports dropped more than 13%.
  • Federal Register Notices:
    • FDA issued a notice of availability on guidance documents related to COVID-19. The notice can be found here.
    • The Executive Office of the President issued a Presidential Document authorizing TransCanada Keystone Pipeline, L.P. to operate and maintain existing pipeline facilities at the international boundary between the United States and Canada. The notice can be found here.
    • USTR issued a notice and request for comments concerning the extension of particular exclusions expiring in October 2020 granted under the $34B action pursuant to Section 301: China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The notice can be found here.

Other News

  • Workday and Autodesk are leading multiple organizations calling on Congress to channel more attention and resources into worker training and reskilling issues presented by the pandemic. In a letter sent this morning to Congressional leadership, approximately 60 organizations, including Microsoft, Udacity, IBM, Twitter, and LinkedIn urged lawmakers to include aid for workforce development in any forthcoming COVID-19 relief legislation.
    • The groups wrote in the letter that “workers across the economy now need to learn new skills for rapidly changing jobs, including digital literacy, to succeed in the new normal,” and asked for federal funds to help. The groups also wrote that “the scale of change is too large for industry to do this alone.”
  • In a letter spearheaded by Howard Schultz, over 100 CEOs, including Microsoft’s Satya Nadella, Walmart’s Doug McMillon, and the U.S. Chamber of Commerce’s Thomas Donahue, urged Congress to provide additional relief for small businesses in the next COVID-19 relief package. The letter urged relief along the following principles:
    • Favorable, federally guaranteed loans that last longer than the next few months.
    • Flexibility for the use of loans.
    • Hardest-hit businesses should be eligible for at least partial loan forgiveness, but the forgiveness should be limited to small and medium-sized firms.
    • Building on the Paycheck Protection Program infrastructure to provide funds quickly.
    • Funds should flow to all businesses in need but especially those owned by people of color who have traditionally had less access to capital. A portion of funds should be set aside for community development financial institutions and minority depository institutions.
  • Hundreds of tribal, racial justice, environmental, and conservation organizations sent a letter to members of the Senate Environment and Natural Resources Committee opposing the nomination of William Perry Pendley to be Director of the Bureau of Land Management. The letter argues that Pendley’s documented history of negative sentiments toward public lands disqualifies him from the position.
  • A group of eight industry trade groups wrote to a letter to Congressional leadership Friday urging for the extension of a provision of the CARES Act through the end of 2021 which authorizes reimbursement of costs to government contractors related to the COVID-19 pandemic.
  • A United Airlines memo that was leaked to the press last week stated that the carrier is considering furloughing about 3,900, or roughly a third, of its pilots between 2020 and next year.
    • As a reminder, United previously warned 36,000 employees, including 2,250 pilots, that they could be furloughed once a CARES Act prohibition on involuntary layoffs expires on September 30.
  • Some regional airlines, including PSA Airlines, Envoy Airlines, and Piedmont Airlines have begun notifying employees of more potential furloughs.
  • Alaska Airlines said on Friday it would send out 4,200 furlough notices in the coming days, while Delta Air Lines announced last week that more than 17,000 of its employees have volunteered for early retirement after warnings of furloughs.
  • One of the only major airlines that said it will hold off on furloughs, for now, is Southwest. The airline continues to support the union request that the next COVID-19 relief package include a six-month renewal of the Payroll Support Program (PSP). Southwest CEO Gary Kelly issued a video late last week on extending the PSP but acknowledged that there is a current lack of support for the idea in Congress.
  • Boeing supplier Spirit AeroSystems announced it will cut 1,100 jobs in response to the third reduced production rate for the 737 MAX this year.
  • Both General Motors and Ford have taken steps to pause social media spending and to “evaluate efforts” to curb hate speech on social media.
  • As we reported last week, World Trade Organization (WTO) members failed to agree on a temporary replacement for Roberto Azevêdo, who is leaving at the end of the month.
    • The WTO General Council, which includes all member countries, did, however, agree on a process that should shrink the current field of eight candidates to replace Azevêdo to five by mid-September.
  • U.S. law enforcement announced Friday that three people were arrested, including a teenager, for allegedly carrying out the recent July Twitter hack. Sen. Mark Warner (D-VA), the top Democrat on the Senate Intelligence Committee, warned of what the attack might mean for other tech companies, especially ahead of the November election. The attack targeted the Twitter accounts of high-profile politicians, including former President Barack Obama and presumptive Democratic nominee Joe Biden, as well as business leaders, including Elon Musk. The attack resulted in the hackers receiving over $120,000 in bitcoin.
    • Sen. Warner said in a Friday night statement, “it’s good to see that this is a domestic criminal case and not a foreign government,” and that the hack has “forced Twitter to review its network security, and employee education protocols. I hope other social media companies are following suit.”
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