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COVID-19 Update | Thursday, April 9

April 9, 2020

Congress

  • The Senate opened its pro forma session on Thursday with Republicans and Democrats failing to agree on additional relief funds for the programs established under the CARES Act.
    • As discussed in our update last night, the two sides could not agree on the content of a package. Each side objected to the others’ proposal.
    • Senate Leader McConnell had proposed an additional $250 billion for the Paycheck Protection Act, which has been oversubscribed.  
    • The Democrats were seeking additional monies for state and local governments ($150B) and for hospitals ($100B), plus an increase in SNAP funding. 
    • Both sides continue to discuss a potential path forward. The next opportunity for action is when the Senate reconvenes on Monday.
    • If no deal is reached shoring up the programs in CARES, Congress may have to accelerate the consideration of a larger more comprehensive package. Current projections are that the PPP will run out of money by the end of next week.

Administration

  • Elevate expects that Treasury Secretary Mnuchin may begin to release airline relief funds under the CARES Act, which totals $29 billion, early next week. He indicated that discussions were on-going with carriers in a press conference earlier today. However, negotiations, while beginning with some of the larger carriers, have not yet occurred with many others. The grants had been held up as the Treasury was requesting additional information from applicants regarding their liquidity status beyond what was included in applications.
    • Some affected aviation businesses have reportedly had trouble applying for the grants due to difficulties with the application instructions.
    • House Speaker Nancy Pelosi indicated that the appropriations for air carriers in the CARES Act is sufficient for the time being, meaning further relief to the industry is unlikely in the near-term.
    • Reports indicate that JetBlue and Spirit have made the first requests for exemptions from DOT’s recently announced minimum service requirements.
    • We are hearing that airport monies will be announced next Tuesday.
  • The Federal Reserve announced it would take action to provide up to $2.3 trillion in loans to further support the economy.
    • It includes extending the credit of PPP lending institutions, ensuring $600 billion in credit flows through the Main Street Lending Program, expansion of the Primary and Secondary Market Corporate Credit Facilities by $850 billion, and $500 billion in lending for states and municipalities. A full summary can be found here.
      • The $500 billion is available for states with over 2 million inhabitants and cities with over 1 million inhabitants.
    • Federal bank regulatory agencies also announced that they will neutralize the regulatory capital impact of lending through the PPP facility due to the minimal risk associated with the loans.
  • Federal Register Notices
    • The FCC announced that it has established two programs (the COVID-19 Telehealth program and the Connected Care Pilot Program). Both programs aid the deployment of telehealth services to Americans.
      • The COVID-19 Telehealth Program is designed to distribute a $200 million appropriation from Congress under the CARES Act to help health care providers provide telehealth services as it pertains to COVID-19.
      • The Connected Care Pilot Program makes available up to $100 million over the next three years to examine how the Universal Service Fund can aid the trend towards connected care services.
    • The Small Business Administration extended the deadline to apply for Economic Injury Disaster Loans (EIDL) to December 31, 2020.
  • The Trump Administration announced that it wants to move forward with a July 1st entry into force for the United States – Mexico – Canada (USMCA) trade agreement.
    • Many business leaders have warned of drastic economic impacts as a result of a mid-year implementation, especially amid the COVID-19 pandemic.

Other News

  • Weekly unemployment claims climbed by an additional 6.6 million people according to the Labor Department.
  • More than ten million individuals had claimed unemployment in the previous two weeks already.
  • Boeing has offered buyouts to 161,000 workers. It is still awaiting FAA re-certification for its 737 Max aircraft. 
  • Airbus has reduced aircraft production by about one third of normal production amid the COVID-19 pandemic.
  • Reports continue to indicate that the cruise line industry and hotels are offering their empty rooms to house COVID-19 patients. The Four Seasons Hotel in New York offered rooms to medical personnel.
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