COVID-19 Update | Wednesday, April 8

April 8, 2020

Congress

COVID-19 Interim Legislation: Following correspondence this morning from Senate Minority Leader Chuck Schumer’s (D-NY) office, Elevate transmitted the public demands that House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Schumer jointly issued announcing their priorities for the next COVID-19 relief bill. The next relief measure is intended to only add money to the programs funded under the CARES Act, to enable it to be considered expeditiously. However, while it appeared yesterday that a bill could be considered as early as tomorrow, negotiations are ongoing to try and address Democratic demands. In addition to the $250 billion additional funding for the PPP proposed by the Administration, the current Democratic proposal would add:
- $100 billion for hospitals;
- $150 billion for state and local governments; and
- A 15 percent increase to the Supplemental Nutrition Assistance Program (SNAP) benefit.
Reports indicate that White House officials oppose these additions and disagreements between the parties will likely delay swift passage of a bill tomorrow.
Based on current information, we believe that the Senate will fail to get Unanimous Consent (UC) on the $250 billion proposed by the Administration. However, negotiations continue, and a deal may be struck for additions to the $250 billion proposal or for promises for future packages prior to tomorrow morning.
The removal of Glenn Fine, who was recommended by a panel of Inspectors GeneraI to oversee the program, has raised a number of concerns from both parties due to the importance of the role. Critics of the move question the supposed independence of the position. President Trump has replaced Fine, who was serving as acting Inspector General for the Department of Defense, with the EPA’s Inspector General Sean O’Donnell at the Department of Defense, meaning Fine is no longer eligible to lead the panel of Inspectors General.
COVID-19 Follow-On Legislation: We anticipate that the next full relief bill in Congress will modify existing provisions to improve what was done in the CARES Act as well as expand eligibility to those programs. We also anticipate changes to include other sectors of the economy that did not obtain relief in the last bill. This bill will likely be considered as early as May, depending on the resumption of the Congressional session in D.C. or a viable process to pass legislation remotely. Currently, the viability of a remote voting process seems dim.
Subsequent to this next relief package, we expect discussion on a broader stimulus package that might include a broad-based infrastructure plan and other stimulus measures.

Administration

General Motors and Philips have signed contracts with the Federal government to produce ventilators under the Defense Production Act.
- The Philips contract is for $646.7 million to deliver 2,500 ventilators to the national strategic stockpile by the end of May, and 43,000 by the end of the year.
- Under the General Motors contract, announced earlier this morning, the automaker will deliver 6,132 ventilators by June 1 and a total of 30,000 by the end of August for a cost of $489.4 million.
EPA yesterday sent a final rule to the White House for review that would severely limit states’ authority under the Clean Water Act. The rule (Reg 2040-AF86), was originally proposed in August 2019 and would limit states’ authority under Section 401 of the Clean Water Act, which requires states to certify that projects will not harm their water quality. The proposed rule also gave the agencies the right to greenlight projects over states’ objections.
The Federal Reserve Board has announced they will expand Wells Fargo’s cap on its balance sheet to allow for it to continue to provide relief to small businesses.
The Federal Emergency Management Agency issued a rule that bans the export of 5 items considered personal protective equipment (PPE) which has been in short supply during the COVID-19 crisis, unless the agency gives explicit permission.
Elevate understands that the Federal Aviation Administration (FAA) is considering options to have unmanned aircraft systems (drones) assist in delivering medical supplies and other foods, as well as perform other relief services.
- Drone operators looking to fly to perform these services can:
  - Fly under part 107, with or without a waiver, as delivering goods by drone is allowed under part 107 (Small Unmanned Aircraft Systems Rule). Operators must maintain line-of-sight with their drone.
  - Obtain a Special Government Interest (SGI) approval for operations in controlled airspace or beyond line of site – in immediate emergency circumstances only.
  - Fly as a public aircraft operation (PAO) – for law enforcement, first responders, or other public safety/government officials.
- The FAA encourages operators considering using their drones for these purposes to coordinate with local government and/or public health officials, and/or the community they are intending to serve, before flying in support of COVID-19 response efforts.
  - The FAA sees this as a prerequisite for expediting approvals outside normal processes.
Secretary of State Mike Pompeo reported during tonight’s briefing that the Administration has so far successfully repatriated 50,000 United States citizens back to the U.S.

Other News

Global trade is expected to drop by 4% in the first quarter of 2020, according to a Baker McKenzie report.
Although the flow of goods between Canada and the US has slowed over the last few weeks amid the COVID-19 pandemic, the flow of health care and essential workers has continued.
States continue to share and coordinate resources, such as ventilators, as hot spots arise.
The Export-Import Bank has announced a board meeting to discuss temporary actions to address urgent U.S. under-supply of COVID-19 medical supplies and equipment to protect the American people. The teleconference is scheduled for Tuesday, April 14, 2020 at 10am.