COVID-19 Update | Wednesday, April 15
April 15, 2020
Congress
- The path to replenish the Payroll Protection Program (PPP), remains unclear. Republicans and Democrats remain firm in their position regarding what should be in the next package to provide relief. Conversations between the two sides continue; however, it is unclear that a deal will be reached before tomorrow’s pro-forma session of the United States Senate. It is expected that the PPP program will run out of money prior to the Senate’s pro-forma session on Monday.
- In a letter to the Trump Administration, Senate Democrats are requesting information regarding the Administration’s management of the Strategic National Stockpile of medical equipment. As previously reported, Senator Cory Gardner (R-CO) has called for similar information. Criticisms continue to be leveled about the slow distribution of critical medical equipment from the federal government to states in need. The full letter can be found here.
- Speaker Pelosi (D-CA) has indicated that President Trump’s freezing of funding for the World Health Organization (WHO) violates the same statute that the General Accounting Office found he violated when he froze military aid for Ukraine. The freezing of Ukrainian aid was a large component of the House’s impeachment of President Trump.
- Administration officials indicated that the language that appropriated the funds gives the President discretion on how to spend the funds.
- Many Republican lawmakers have publicly criticized the World Health Organization’s handling of the COVID-19 pandemic and have called for investigations into the group’s response and involvement with China.
- Senate Democratic Leader Chuck Schumer (D-NY), Senate Democratic Whip Dick Durbin (D-IL), Senate Committee on Health, Education, Labor, and Pensions Ranking Member and Assistant Democratic Leader Patty Murray (D-WA), and Senate Democratic Policy and Communications Committee Chairwoman Debbie Stabenow (D-MI) held a press call today to discuss testing capacity for COVID-19 and the steps Democrats are pushing for to address it.
- During the call, the lawmakers pushed Republicans and the Trump administration to include $30 billion in a fourth COVID-19 relief package to bolster testing supplies and manufacturing, expand free testing for all and improve reporting and contact tracing.
- More information on the call and the roadmap that the Senators laid out can be found here.
- Expanding relief eligibility for 501(c)(6) organizations remains an issue for many members, and there is a desire to address legitimate 501(c)(6) nonprofit organizations in a bill soon.
Administration
- President Trump indicated that guidelines for states to reopen their economies will be announced tomorrow.
- President Trump urged the Senate to vote on his judicial nominees, which have been further delayed due to the COVID-19 pandemic, or formally adjourn to allow him to make recess appointments. If the Senate does so, it would pave the way for President to fill 81 current Article III vacancies.
- The Treasury Department today unveiled an online application to help with Economic Impact Payments. Through the IRS webpage, “Get My Payment” allows people to provide direct deposit information and gives a payment date. More information on this can be found here.
- Elevate understands that the Treasury Department expects to provide additional funding to cargo carrier carriers and contractors under the CARES Act (a total of $7 billion) within the next 10 days.
- Federal Register Notices
- The Department of Health and Human Services published a notice in the federal register this morning extending the liability immunity for activities related to medical countermeasures against COVID-19 authorized under the CARES Act. The full notice can be found here.
- The Small Business Administration issued their interim final rule regarding the Paycheck Protection Program and have requested public comment. Specifically, the Interim Final Rule announces the implementation of sections 1102 and 1106 of the CARES Act. The full notice can be found here.
Other News
- As we reported last night, several airlines have reached agreements with the Treasury Department on terms for their loans through the $29 billion available in the CARES Act for air carriers
- American Airlines has announced that it is expecting to receive $5.8 billion in aid from the federal government, of which $1.7 billion it will be required to be paid back in a low interest rate loan. American Airlines also plans to apply for an additional loan of $4.75 billion, presumably out of the $29 billion in CARES Act air carrier loans.
- American has also asked DOT to waive some of the service requirements in order for the airline to qualify for recovery assistance, in some cases calling them “not reasonable or practicable.”
- Delta said it reached a deal with the Treasury Department for $5.4 billion, including a 10-year, $1.6 billion, unsecured-loan and the airline will give the government warrants to acquire around 1% of the Delta stock at $23.39 a share, last Friday’s closing price, over five years.
- JetBlue said it will get $935.8 million, close to $251 million as a loan.
- Reports indicate that United Airlines is getting $3.5 billion as a direct grant and a $1.5 billion loan. It also said it “expects to issue warrants to purchase approximately 4.6 million shares of United Airlines (UAL) common stock to the federal government.”
- Southwest said it expects to receive $3.2 billion under the program, more than $2.3 billion in payroll support and a 10-year low-interest loan of close to $1 billion. The loan will likely include 2.6 million warrants for the Treasury Department, and that the aid prohibits share repurchases and dividends until September 30, 2021 and requires limits on executive compensation for nearly two years, the airline said.
- American Airlines has announced that it is expecting to receive $5.8 billion in aid from the federal government, of which $1.7 billion it will be required to be paid back in a low interest rate loan. American Airlines also plans to apply for an additional loan of $4.75 billion, presumably out of the $29 billion in CARES Act air carrier loans.
- Two large regional airlines have been unable to come to a deal with the Treasury Department and remain in negotiations.
- Consumers who have been unable to receive cash refunds instead of company credit for canceled flights have filed a class-action lawsuit against Southwest Airlines. The lawsuit asserts that Southwest’s own carrier contract, on top of federal law, requires cash refunds if requested.
- According to a report from Environmental Entrepreneurs, the clean energy sector has already lost 106,000 jobs due to the COVID-19 pandemic and stands to lose up to 500,000 by June if the industry does not receive federal aid. The report can be found here.
- New York Governor Andrew Cuomo ordered all people in his state to wear a face covering while in public. His executive order will take effect on Friday after a three-day grace period.
- Governor Cuomo also shared his belief that the crisis will not be over until a vaccine is made available.