Public Policy Daily Briefing – July 2, 2020
An extension of the CARES Act’s Paycheck Protection Program (PPP) authored by a Democratic member of the US Senate is on its way to President Donald Trump’s desk to be signed into law. The US House of Representatives has approved a US$1.5 trillion national infrastructure bill loaded with Democratic priorities for climate change, clean energy and education. The president is urging Congress to include another generous round of direct “stimulus” payments to American households in the next federal COVID-19 relief measure. A highly-anticipated national employment report issued this morning by the Department of Labor’s Bureau of Labor Statistics (BLS) is expected to play a key role in determining how negotiations to shape the next measure unfold.
Topics covered today include: tax and economic development, health, international trade, government oversight and investigations and US states developments.
A note from the authors: In observance of the July 4th Independence Day holiday, we will take a brief hiatus with the daily report tomorrow, July 3. In addition, given the congressional recess this coming week, we will issue one “jumbo” report on Thursday, July 9 for the week. Happy Independence Day to our US audience.
POLITICO reports on congressional action on the PPP measure, introduced by Sen. Ben Cardin (D-MD):
The House Wednesday passed a bill that would revive the $670 billion small business aid program that shut down just hours earlier, leaving only President Donald Trump’s signature to restart the flow of emergency funds.
The lawmakers agreed to advance the bill by unanimous consent after the Senate passed it in a surprise move Tuesday night. House Democrats were then left scrambling to decide whether to attach certain conditions — such as transparency from the White House about how relief aid has been spent — before lawmakers left town Wednesday evening. Speaker Nancy Pelosi and her leadership team ultimately agreed to a ‘clean’ extension of the program. Trump is expected to sign the bill.”
The House on Wednesday also cleared a national infrastructure package championed by Transportation & Infrastructure Committee Chairman Peter DeFazio (D-OR) that features an array of investments in new construction projects, some of which are controversial and have little chance of inclusion in a consensus measure that can pass the Republican-led Senate. The bill was approved by the House on a mostly party-line vote.
President Trump in a televised interview Wednesday declared that he wants the next federal coronavirus response bill to include another generous round of direct federal “stimulus” payments to individuals and households.
President Trump supports another round of economic impact payments to individuals, he told FOX Business on Wednesday.
Trump told FOX Business’ Blake Burman that he supported the measure as part of another stimulus package, so long as it ‘done properly.’
‘support actually larger numbers than the Democrats, but it’s got to be done properly,’ Trump said. ‘I want the money getting to people to be larger so they can spend it. I want the money to get there quickly and in a noncomplicated fashion.’
The Democrats have advocated for another round of $1,200 payments, indicating Trump would like to see checks in excess of that amount.”
The concept of another round of direct “stimulus” payments is one that has divided lawmakers in the Republican Party and been questioned by some Democratic senators as well.
The new US monthly jobs report from the BLS can be seen here.
Tax and Economic Development Updates
Last night, the House passed S. 4416, which would allow the PPP to continue issuing loans to small businesses through August 8, 2020. The PPP’s authorization originally lapsed at the end of June. With the PPP set to be extended once the President signs the bill into law, there is already discussion under way to reform the program in an effort to ensure that those businesses that are truly in need of financial assistance are able to receive it. For example, the American Society of Association Executives sent a letter to Congressional leadership urging lawmakers to allow trade associations to be eligible for PPP loans, as many trade associations “have little or no financial cushion to carry them through this devastating time and thus desperately need access to the PPP.”
Looking ahead, the Federal Reserve yesterday released the minutes of last month’s Federal Open Market Committee meeting, which acknowledged that while the economy is expected to begin to recover during the second half of 2020, the jobs market will take longer to recover and require “sustained support” along the way. In addition to “business adaptations [that are] likely to endure long after the coronavirus subsides,” the central bank also predicts that “a wave of bankruptcies in the energy sector could be forthcoming.”
Related to concerns over high US unemployment, yesterday, Senate Minority Leader Chuck Schumer (D-NY) and Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced legislation that would tie enhanced unemployment benefits to joblessness levels, phasing out the $600 per week expanded unemployment insurance benefit until a state’s unemployment rate falls below eleven percent. According to Politico’s calculations, “[e]ach percentage point drop in the rate, based on a three-month average, would correspond to a $100 decrease in enhanced weekly benefits, meaning at least some additional benefits would be available in a given state until its unemployment rate drops below 6 percent.” Notably, the legislation would also provide assistance until at least March 2021 to gig workers and other employees that are ineligible for traditional unemployment insurance. Nevertheless, extending unemployment benefits beyond the current July 31 deadline is a “redline” for Congressional Republicans, thus policymakers may well need to find an alternative approach to supporting those Americans who remain unemployed.
On the regulatory front, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) yesterday provided information to the “eight largest and most complex domestic banking organizations that will guide their next resolution plans, which are due by July 1, 2021.” These so-called resolution plans, which are also referred to as “living wills,” set forth these banking organizations’ strategies for “rapid and orderly resolution in bankruptcy in the event of material financial distress or failure of the firm.” Pursuant to the most recent guidance, the 2021 resolution plans must include “core elements,” including capital, liquidity, and recapitalization strategies. Additionally, each banking organization must provide an update regarding how it has “integrated changes to and lessons learned from its response” to COVID-19 into its resolution planning process. According to the Federal Reserve, the central bank and the FDIC recently completed a review of operations at certain firms whose failure or discontinuance would threaten US financial stability. The agencies intend to complete another review by July 2022, which will include “a further, broader evaluation of the framework used to identify critical operations.”
Amid news of another single-day record of coronavirus cases, two congressional committees will be asking questions of top officials about the administration’s plans for development and distribution of a COVID-19 vaccine and continued oversight of the distribution of critical medical supplies. The Senate Appropriations Committee Subcommittee on Labor, Health and Human Services, Education, and Related Agencies is holding a hearing on “Operation Warp Speed,” the name for the program that numerous federal agencies are collaborating on to deliver a safe and effective vaccine by January 2021. National Institutes of Health (NIH) Director Francis Collins, Centers for Disease Control and Prevention Director Robert Redfield and Gary Disbrow, acting director of the Biomedical Advanced Research and Development Authority (BARDA) are slated to testify. The House Oversight and Reform Committee Subcommittee on the Coronavirus Crisis is holding a hearing on the administration’s efforts to procure, stockpile, and distribute critical supplies. Assistant Secretary for Health Brett Giroir, Rear Admiral John Polowczyk, Vice Director of the Supply Chain Stabilization Task Force at the Department of Defense, and Assistant Secretary of Defense for Acquisition will appear before the subcommittee.
The Department of Health and Human Services (HHS) is expecting another five million point-of-care tests to come on the market this month, which would bring the total number available to 10 million. The term “point-of-care” refers to the types of tests that can be conducted in a patient care setting wherein results are received in minutes. Assistant Secretary Giroir announced the news on a White House press call, but also warned that the tests “lack a little bit of sensitivity.” He noted that BARDA and NIH are undertaking efforts to improve the limitations. Giroir also told reporters that he expects the methods for “pooled testing” to be ready by the fall. This approach allows for several patient samples to be combined into one batch which then undergoes a single diagnostic test. If the batch tests negative, the health care provider should assume all tested individuals do not have COVID-19. If the batch tests positive, the individuals should then be separately tested. The Food and Drug Administration issued templates for test developers on June 16.
On Wednesday, the House of Representatives adopted the Hong Kong Autonomy Act, sanctions legislation originally introduced and passed in the Senate. The measure, filed in response to the Chinese Government’s new national security law regarding Hong Kong, returns to the Senate, where bill sponsors Senators Pat Toomey (R-PA) and Chris Van Hollen (D-MD) have said they plan to seek a vote on the version of the bill approved by the House as soon as today.
Also Wednesday, the Departments of State, Treasury, Homeland Security, and Commerce issued a joint business advisory on “Risks and Considerations for Businesses with Supply Chain Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses in Xinjiang.” The document cautions businesses operating in this region to ensure adequate human rights due diligence policies and procedures. The US government continues to target imports from and businesses operating in the Xinjiang region that allegedly engage in human rights violations, including forced labor.
Yesterday, Senator Bob Casey (D-PA), Ranking Member of the Special Committee on Aging; Senator Gary Peters (D-MI), Ranking Member of the Homeland Security and Governmental Affairs Committee; and Senator Wyden (D-OR), Ranking Member of the Finance Committee, released a report titled “COVID-19 in Nursing Homes: How the Trump Administration Failed Residents and Workers.”As its title suggests, the report is highly critical of the Administration’s handling of the COVID-19 crisis in the nation’s nursing homes. It concludes that the crisis was exacerbated by a delayed provision of personal protective equipment (PPE) and funding, the absence of a national testing strategy, and delayed and inadequately supported oversight in nursing homes, among other things. The reaction of the administration and Republican lawmakers was swift and reciprocally critical. Seema Verma, head of the Centers for Medicare and Medicaid Services, called the report “disingenuous.” Ranking Member of the House Ways and Means Committee Kevin Brady (R-TX) and Ranking Member of the House Energy and Commerce Committee Greg Walden (R-OR) joined Republican Whip and Ranking Member of the House Oversight and Reform Committee Select Subcommittee on the Coronavirus Crisis Steve Scalise (R-LA) in “set[ting] the record straight about Democrats’ half-baked nursing home report.” They argued it is the Democratic governors of five states—California, Michigan, New Jersey, New York and Pennsylvania—who are to blame for the high number of deaths in nursing homes.
Also yesterday, Representative James Clyburn (D-SC), Chairman of the House Oversight and Reform Committee’s Select Subcommittee on the Coronavirus Crisis, sent a letter to Treasury Secretary Steven Mnuchin, Vice Chair of the Council of Economic Advisers Tyler Goodspeed, and Acting Director of the Office of Management and Budget (OMB) Russ Vought, demanding documents on the administration’s refusal to release unemployment and economic projections. Chairman Clyburn’s letter follows the OMB’s response to the subcommittee’s earlier request for the projections, in which the OMB maintained that there is no use in calculating and releasing “forecasts in which the administration has little or no confidence.” Chairman Clyburn countered this position by pointing out that senior Administration officials recently characterized the economic outlook as “set for a V-shaped recovery” and “a spectacular rebound” soon, while several economists testified before the subcommittee about this being “the worst crisis the American labor market has faced on record.” Clyburn concluded yesterday’s letter by saying that “it is essential that the Administration provides complete and accurate economic information to the American people and Congress—not rosy and unsupported predictions designed to serve political purposes.”
Senators Elizabeth Warren (D-MA) and Richard Blumenthal (D-CT), as well as several Representatives, sent a letter to HHS following reports that HHS plans to add Americans’ personal health information (PHI) to its COVID-19 data platform, HHS Protect. The lawmakers expressed “serious” concerns over the handling of the PHI as part of the HHS Protect project and demanded confirmation that all HHS COVID-19 initiatives, including HHS Protect, comply with the COVID-19 principles the lawmakers outlined in the letter and included in recently introduced legislation.
Senator Warren also sent a letter yesterday to Vice President Mike Pence, Chair of the White House Coronavirus Task Force, in which she condemned the administration’s failure to have a national strategy to contain the COVID-19 outbreak and for allowing states to reopen too soon and without proper guidance. Citing Dr. Fauci’s testimony at the Senate Health, Education, Labor and Pensions Committee hearing on Tuesday about the possibility of 100,000 new cases per day, Senator Warren urged stronger national action and guidance going forward.
As voters argue they should not have to choose between their health and voting, governors have been faced with the need to offer the option of voting by mail due to the COVID-19 pandemic. President Trump has made it clear he neither endorses nor supports mail-in voting even with positive cases continuing to surge in populous states across the country.
Current and former governors are stepping up their support for mail-in voting and studies show that neither party has an advantage, despite the president’s claims that it hurts Republicans. In fact, recent polls in both Iowa and Florida show that Republicans in those states are more likely to vote this year in person, rather than by mail, and that Democrats are more likely to vote by mail — even though previously absentee voting has been more popular among Republicans.
Yesterday, Delaware Governor John Carney (D) signed into law legislation allowing Delawareans to vote by mail in the 2020 primary, general and special elections. The House bill makes voting by mail an alternative to in-person voting due to the pandemic, and establishes procedures for voting by mail mirroring procedures for absentee voting.
Voters in Alaska no longer need to cite a reason for why they choose to vote absentee. The state legislature in March passed a law that gives Lieutenant Governor Kevin Meyer (R) the power to host all mail-in elections through the remainder of 2020. Last week, the Alaska Division of Elections launched a new online application process for absentee ballots, making it easier for voters to vote by mail in the August primary and general election.
Former Homeland Security secretary and former Governor of Pennsylvania Tom Ridge (R) co-chairs a new nonpartisan group, VoteSafe, with former Michigan Governor Jennifer Granholm (D). Launched this spring, the group works to expand mail-in voting and assure safe in-person voting during what seems to be an already pandemic-plagued election season.
Ridge has said the president’s position on mail-in voting is “counterproductive” and recently pointed out that the president won the 2016 election where 25 percent of the ballots were cast by mail, and that Trump himself voted absentee just this past spring.
Washington, Colorado, Hawaii, Oregon, and Utah all conduct their elections by mail, and California and Arizona allow voters the option to permanently vote by mail. Top election officials in Ohio and Florida, two Republican-leaning states hit hard by the pandemic, have also voiced their support for vote by mail.
Meg Gilley and Genevieve Bresnahan contributed to this article.