COVID-19 UPDATE | MONDAY, JUNE 8 (AM)
June 8, 2020
- The Senate will take the first procedural vote on S. 3422, the Great American Outdoors Act, a sweeping public lands package what would permanently reauthorize the Land and Water Conservation Fund, today. It remains unclear whether amendments will be allowed, which could slow down passage of the legislation.
- 43 of the 47 members of the Democratic caucus are co-sponsors, while 16 Republicans have indicated formal support so far.
- The Senate Armed Services Committee is beginning their closed, Subcommittee-level National Defense Authorization Act (NDAA) markups today.
- The Readiness and Management Support Subcommittee will begin their closed markup at 2:30pm and the Strategic Forces Subcommittee will begin theirs at 4:00pm.
- Subcommittee markups will continue on Tuesday and the Full Committee will hold their first scheduled markup of the NDAA at the Full Committee-level this Wednesday at 9:30am.
- Senate Finance Chairman Chuck Grassley (R-IA) echoed Senate Republican sentiments that Senate consideration of additional COVID-19 relief will only occur through a “thoughtful approach” and that he does not want to “rush and pass expensive legislation.”
- House Democrats continue to push for increased relief for the renewable energy sector in the next COVID-19 relief package. Efforts to include an option for renewable energy tax credits to be provided to businesses as direct payments are increasing, as normal tax credits will not provide much benefit to companies that have seen steep revenue declines amid the COVID-19 pandemic. While not being a priority in the past, a spokesperson for House Ways and Means Chairman Richie Neal (D-MA) has said that the Chairman plans to push for these energy relief measures together with infrastructure in the next package.
- Rep. Earl Blumenauer (D-OR), a senior member of the Ways and Means Committee, is circulating a letter urging House Democratic leadership to allow renewable energy tax credits to be received as a direct payment.
- Additionally, Reps. Nanette Barragan (D-CA), Jared Huffman (D-CA), Alcee Hastings (D-FL), Chellie Pingree (D-ME), and Brenda Lawrence (D-MI) are circulating a ”green stimulus framework letter” and are working to release such a proposal in late June.
- Senate Environment and Public Works Committee Chairman John Barrasso (R-WY) has criticized the House Democrats’ efforts on what he perceives to be a “second Green New Deal” and Rep. Garret Graves (R-LA), who is the top Republican on the Climate Crisis Committee, has expressed a similar sentiment.
- Today, House Democrats will release their police reform legislation, following another weekend of widespread protest over the death of George Floyd.
- The legislation would “ban chokeholds, limit ‘qualified immunity’ for police officers, create a national misconduct registry, end the use of no-knock warrants in drug cases and make lynching a federal crime, among other dramatic changes,” according to reports.
- Pentagon leaders are continuing to refuse to testify this week before the House on the use of military force and policy brutality across the country.
- House Armed Services Committee Chairman Adam Smith (D-WA) requested that Defense Secretary Mark Esper and Joint Chiefs Chairman Gen. Mark Milley testify.
- As we reported last week, the House Armed Services Committee intends to mark up its version of the NDAA on July 1, with floor consideration in late July.
- House Democrats intend to include efforts to mitigate the impact of climate change on military bases, clean up PFAS chemicals, and promote energy efficiency in the NDAA.
- The House Transportation Committee hearing scheduled for tomorrow on the impacts of COVID-19 on transportation workers is expected to feature the American Trucking Associations and union representatives.
- Over the weekend, President Trump gave an order to begin withdrawing the National Guard to from Washington, D.C. As a reminder, the National Guard has been present for over a week amid ongoing protests over the death of George Floyd.
- Reports over the weekend indicate that the Bureau of Labor Statistics (BLS), the Federal agency responsible for reporting official unemployment numbers, included a note in the unemployment report published Friday that there had been a “misclassification error.” According to BLS, this error led to the unemployment rate being reported about 3% lower meaning that, while still an improvement from the 19.7% in April, the May unemployment rate was closer to 16.3%.
- In an interview over the weekend, Director of the National Economic Council Larry Kudlow commented that he does not expect negotiations on the next COVID-19 relief package before July 4.
- The Department of Transportation (DOT) on Friday extended its COVID-19 policy for Essential Air Service (EAS) through September 30. Under the policy, EAS carriers can receive compensation for flights that were not completed due to the pandemic.
- The Internal Revenue Service (IRS) on Friday rolled out proposed regulations on the 2017 tax law’s provision that deals with highly paid executives at non-profits, including college sports coaches who make in excess of $1M per year and would therefore be eligible for the tax.
- Nonprofit experts have pointed out some inconsistencies with the provision, like the fact that private colleges are on the hook for the tax on seven-figure contracts, but not public schools.
- At a high level, the IRS rule outlines how the 21 percent tax on highly paid executives at nonprofit organizations will work, and addresses issues like how to calculate compensation for the purposes of the levy, how to determine if someone has received a so-called “parachute payment,” which is also subject to the tax, and how to allocate liability for the tax among related organizations. The regulations also define various terms.
- The President on Friday threatened to impose tariffs on more than $35B worth of auto imports from the European Union because of the trading bloc’s tariffs on American lobster.
- U.S. Export Import Bank nominees, including Paul Shmotolokha and Claudia Slacik, continue to push for their nominations to be taken up by the full Senate for a vote. Both nominees have been waiting for over a year for their nominations to be considered.
- In the latest rollback of Obama Administration regulations, the President signed a proclamation Friday to allow commercial fishing in a North Atlantic National Marine Monument that was established by the Obama administration to protect vulnerable ecological communities. The New England Fishery Management Council, a body responsible for overseeing commercial fishing while preserving sustainable fish populations, now has the power to determine the amount of fish that can be caught from the Northeast Canyons and Seamounts.
- Federal Register Notices
- The National Institute of Standards and Technology created a new Presidential Award to recognize excellence in implementing the Pledge to America’s Workers. The program fulfills two of President Trump’s previous Executive Orders that called for a program to recognize excellence in employer training investments. The notice can be found here.
- The Secretary of Health and Human Services issued an amendment to the Public Health Service Act to clarify that Covered Countermeasures under the Declaration include qualified pandemic and epidemic products to limit the harm of COVID-19. The notice can be found here.
- The National Technical Information Service Advisory has published a notice of open meeting. The meeting will be held on June 29, 2020. The notice can be found here.
- The Office of the United States Trade Representative published their guidelines regarding new Chinese tariffs. This notice announced a technical amendment to one exclusion to the tariffs. The notice can be found here.
- China’s existing COVID-19 guidelines for air travel require flight attendants to take the temperature of passengers on any flights longer than four hours, something U.S. carriers are not currently equipped to do. Additionally, the Chinese government said in its most recent order that it will penalize carriers if passengers are found to test positive after landing in China by suspending their operations.
- These conditions could be challenging for U.S. carriers to meet as the U.S. and China continue to work through issues related to flights between the United States and mainland China.
- Vice President Joe Biden clinched a majority of delegates to the Democratic convention and will therefore officially be the Democratic party’s Presidential nominee.
- According to Airports Council International-World, global aviation passengers declined 55.9% by the end of March compared to last year.
- BlackRock, a large Wall Street firm that manages $7T in assets, is facing increasing scrutiny over its role in the Federal Reserve’s financial relief for U.S. businesses during the COVID-19 pandemic. Lawmakers on both sides of the aisle have expressed concern, including Rep. Chuy Garcia (D-IL) commenting on the firm’s sheer size and market power while Sen. Martha McSally (D-AZ) has questioned its ties to China.
- The Information Technology Industry Council (ITI), a tech group whose members include Amazon, Google, Intel, Microsoft, Oracle and Qualcomm, among others, has published a new policy paper outlining how the Administration is addressing national security concerns surrounding trade in technology products and how their approach could severely backfire and harm U.S. competitiveness, leadership, and even national security in the technology space. The report found that U.S. government actions aimed at “very legitimate risks” could “create unintended negative consequences for U.S. competitiveness, technological leadership, and — ironically — national security.” The full policy paper includes the following five guiding principles for the Administration and Congress to follow in addressing trade-related national security risks:
- National security tools should be deployed in ways that support, rather impede, U.S. technological leadership.
- The government should resist overly restrictive trade policies that undercut U.S. technological leadership and competitiveness.
- Actions should be narrowly focused on “identified national security risks,” and should not be used to advance trade and other economic policy goals.
- The United States should work with like-minded economies to help keep critical technologies from hostile actors, rather than take unilateral actions that hamper U.S. exports and create new market opportunities for competitors.
- The U.S. government and industry should “robustly and continuously” share information about relevant national security risks.
- 43 transportation groups wrote a letter to the White House on Friday asking the Administration for $50B in relief for state departments of transportation. The letter argues that the relief is necessary to continue projects and avoid further job losses as states, including their departments of transportation, have seen a large revenue decline during the pandemic.
- Health officials in New Zealand announced that the last known person to be infected with COVID-19 in the country has recovered. Though there likely will be additional cases imported once the country opens its borders, which have been closed to all but citizens and residents during the pandemic, the announcement is a positive sign that may allow the country to, among other things, have spectators in the stands for sporting events, at concerts, and lift some flight restrictions.
- According to the Wall Street Journal (WSJ), carriers continue to say they will have to shrink by flying fewer flights on fewer planes with fewer employees despite receiving $25B in stimulus from the Federal government. Other analyses have also found that airlines will likely need to decrease their active fleet by 20% and cut their pilot workforces in equal measure.
- WSJ also reported that major airports around the world are rethinking plans to spend billions of dollars on new terminals, runways, and hotels that could potentially sit empty if travel demand does not return.
- San Francisco International Airport, for example, is postponing its $1B terminal renovation by at least 6 months that was scheduled to start this month.
- In addition, Orlando’s airport authority scaled back gate expansion plans, officials at London Heathrow Airport said building a third runway is not a priority at the moment, and Auckland Airport in New Zealand said it is suspending plans for a new terminal and second runway.
- Industry groups continue to advocate for tariff relief as revenues throughout U.S. business are affected by the pandemic. The latest example is the wine industry, where groups such as the U.S. Wine Trade Alliance are lobbying the Administration to lift the wine tariffs. Wine wholesalers and retailers were already facing increased business costs due to a 25% Trump Administration tariff on wine imports from France, before the pandemic forced the closure of many restaurants further eliminating revenues from wine sales.
Truck driver employment was up slightly in May, according to the digital truck brokerage firm Convoy. Their blog post found that private fleets “aggressively shed jobs in April but May saw those losses reverse ever so slightly – in part because federal emergency lending rules were more favorable to businesses outside of trucking.”