COVID-19 – Federal Update 3-25-2020

March 25, 2020

We have a deal: Senate Announces Stimulus Package – we will share a copy of the final text when made available later this morning

The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package that tees up more than $2 trillion in spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to stem the coronavirus.

The plan includes about $500 billion that can be used to back loans and assistance to companies, including $50 billion for loans to U.S. airlines, as well as state and local governments. It also has more than $350 billion to aid small businesses. Then there is $150 billion for hospitals and other health-care providers for equipment and supplies.

The legislation was still being drafted but McConnell said the Senate would vote on it today. It would still have to pass in the House before it gets to President Donald Trump’s desk. Speaker Nancy Pelosi (D-Calif.) had consulted with Schumer throughout his negotiations with Treasury Secretary Steven Mnuchin. Pelosi said yesterday the House could approve a Senate-passed coronavirus bill by unanimous consent—a procedure that would let the chamber pass the bill without calling members back to Washington—though it’s unclear if any member would object to that plan.

For individuals the package provides direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child (those that earn up to $75,000). Unemployment insurance would be extended to four months, the benefits would be bolstered by $600 weekly and eligibility would be expanded to cover more workers.

Democrats demanded and won a series of restraints on corporations that would benefit from loans or investments from the Treasury Department, as well as an oversight mechanism for who gets money.

Any company receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers. The Treasury Department would have to disclose the terms of loans or other aid to companies and a new Treasury inspector general would oversee the lending program. Read more from Josh Wingrove, Laura Litvan and Steven T. Dennis.

With the prospect that Congress was closing in on a deal yesterday, the Dow Jones Industrial Average rose more than 11% in its biggest advance since 1933, and the S&P 500 rebounded with the biggest one-day gain since October 2008 after starting the week with a rout. In Asia markets, U.S. futures pared early losses after news of the deal. Read more on the market response from Vildana Hajric and Ian Sayson.

The coronavirus has turned almost every corner of the economy into a bailout candidate, and forced policy makers to spray cash around on an unprecedented scale—and the chief worry is that it won’t be enough. Congress is set to pass an emergency package worth about 10% of America’s economic output. That’s likely the biggest ever in peacetime—and will push the budget deficit toward levels reached in World War II, above 20% of GDP. Meanwhile, the Federal Reserve has rolled out a credit lifeline worth trillions, exceeding even the measures it took during the 2008 financial crisis.

Trump-Owned Companies Banned From Virus Aid: The $2 trillion stimulus plan would also ban any company controlled by Trump or his children from receiving loans or investments from Treasury programs. According to a summary circulated by Schumer’s office, businesses owned by the president, vice president, members of Congress or heads of executive departments would be excluded from receiving that aid. The block also would also extend to companies controlled by their children, spouses or in-laws. Chelsea Mes has more.


Other Economic Efforts

Restarting Economy Risks Worse Damage: Trump’s desire to get the economy up and running soon runs the risk of backfiring and making things even worse. With a growing number of state governments ordering business shutdowns, the effort by the president for a return to normal could lead to confusion and harm the efforts of those municipalities to contain the coronavirus contagion. “There is the potential, if the president pushes the view we need to get the economy going, to really just sow chaos throughout the country,” said Maury Obstfeld, a former chief economist for the International Monetary Fund. Read more from Rich Miller and Steve Matthews.

90-Day Deferral of Tariffs: The Trump administration is debating whether to defer payments of duties on imported goods from around the world for three months, people familiar with the talks said. Discussions in recent days involving the U.S. Customs and Border Protection and other government agencies about suspending tariffs for a three-month period sparked push back from domestic industry associations. In a letter to acting CBP commissioner Mark Morgan, the Coalition for a Prosperous America expressed concern that the mov e was under consideration. Read more from Jenny Leonard.

Covid-19-Related Paid Leave: Businesses won’t be able to count independent contractors toward the 500-employee minimum needed to avoid having to pay workers emergency leave under the coronavirus relief law, but they can include some temporary workers provided by staffing firms in the headcount, the Labor Department said. In question-and-answer guidance posted yesterday, the department’s Wage and Hour Division also said small businesses with fewer than 50 workers can be exempt by documenting that their viability would be jeopardized by the paid sick leave requirement. Read more from Ben Penn.

Prevention & Treatment

Trump’s Target for Ending Lockdown Sets Up Clash With Governors: Trump said he envisions “packed” U.S. churches on Easter Sunday as he described his ambition to abandon stringent public-health measures to combat the coronavirus outbreak and re-open the economy in mid-April. His vision appears increasingly out-of-step with the nation’s state and local leaders, who have ordered entire states and cities shut down in a desperate effort to slow the spread of the virus.

But he drew measured support from Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, who said it might be possible for parts of the country to return to normal function while others combat outbreaks. Fauci did not, however, address the Easter timeline specifically. “Obviously no one is going to want to tone down things when you see what’s going on in a place like New York City,” Fauci said. “What we don’t have right now that we really do need is, we need to know what’s going on in those areas of the country where there isn’t an obvious outbreak.” Read more from Saleha Mohsin.

As lockdowns spread across the U.S., the U.K. and other countries, early lessons on how effective they’ll be against the new coronavirus are coming from abroad. Even as China moves to lift a quarantine on the original virus epicenter of Wuhan after stanching the outbreak, India and much of Europe are locking down. Comparisons are tricky because of differences in the outbreak severity, testing regimes and health-care systems in each country.

Countries like South Korea have countered the pandemic successfully without large-scale quarantines, relying more on tools like testing and contact tracing. Even so, the numbers are cause for optimism that a global clampdown on public life is helping to slow the spread of the virus. The question is how long the measures will need to last to ensure the outbreak doesn’t surge again. Naomi Kresge and Samuel Dodge have more.

White House Calls for Quarantine for All Leaving New York: The White House urged anyone who has been in New York to self-quarantine for 14 days to stop the spread of the coronavirus, which has become widespread in the city. “You may have been exposed before you left New York,” Deborah Birx, the State Department doctor who is advising Vice President Mike Pence, said at a White House news conference yesterday. “Everybody who was in New York should be self-quarantining for the next 14 days to ensure that the virus doesn’t spread to others.”  Pence said the federal government was “surging resources” to the New York area, including 4,000 ventilators in the next 24 hours. Read more from Saleha Mohsin and Josh Wingrove.

Trump Invokes Production Law for ‘Leverage’: Trump said he invoked a U.S. law that allows the government to order industrial production for “leverage” with companies making supplies to combat the coronavirus outbreak, but that he hasn’t had to exercise the authority. “It’s called leverage,” Trump said of the Defense Production Act at a White House news conference. “Companies are doing as we asked, and companies are even better than that—they’re coming through and they’re calling us.”

U.S. Aims to Convert Hotels Into Hospitals: The U.S. Army Corps of Engineers is urgently seeking commercial companies that know how to convert hotels into hospital space, as infections rise in populous areas such as New York City and hotels sit empty amid the pandemic. The corps’ contracting office in Little Rock, Ark., is putting out feelers in a draft request for proposals for companies that can convert hotel space to an acute alternate care facility in support of treatment for Covid-19 patients. The magnitude and type of contract is ye t to be determined, the notice said. Read more from Roxana Tiron and Robert Levinson.

Pentagon Looks to A.I.: The Pentagon envisioned using artificial intelligence for humanitarian relief after typhoons in the Pacific and now it’s looking at ways to employ the nascent technology to respond immediately to the new coronavirus outbreak at home. The Joint Artificial Intelligence Center, which leads Pentagon development of A.I., is deep in conversations with U.S. Northern Command and the National Guard Bureau about the possibility, said Lt. Gen. Jack Shanahan, the center’s director. It could use commercial, academic, and government data sources to coordinate efforts to mitigate harm from the virus, identify infection hotspots, and potentially direct the deployment of Guard forces and resources.

Meanwhile, the number of National Guard troops deployed across the country to combat the virus has surged from hundreds last week to nearly 10,000 as of yesterday. Increasing numbers of infection across the country are likely to bring in a bigger military role, which is managed at the federal level by Northern Command and the Guard Bureau. Read more from Travis J. Tritten.

Training Amid Pandemic: American health-care systems will get $100 million in federal funds to provide training and resources to hospitals, emergency medical services, and 911 call centers, the HHS announced yesterday. HHS’s Office of the Assistant Secretary for Preparedness and Response will direct the funds to three health facilities that previously cared for Ebola patients, 10 regional pathogen treatment centers and 62 hospital preparedness partners, among other groups. The funds were part of the supplemental appropriations bill signed into law this month. Read more from Shira Stein.

Trump-Backed Drug No Better Than Care, Study Shows: Hydroxychloroquine, a medicine for malaria that Trump has touted as a treatment for coronavirus, was no more effective than conventional care, a small study found. The report published by the Journal of Zhejiang University in China showed that patients who got the medicine didn’t fight off the new coronavirus more often than those who did not get the medicine. The study involved just 30 patients. Of the 15 patients given the malaria drug, 13 tested negative for the coronavirus after a week of treatment. Of the 15 patients who didn’t get hydroxychloroquine, 14 tested negative for the virus. Read more from Michelle Fay Cortez and Claire Che.

Preparations for Vaccine Production: Biotech companies should prepare now to ramp up production for Covid-19 vaccines and treatments to prevent delays in manufacturing that could hinder patient access, a senior HHS official said yesterday. Federal authorities are hoping to ensure “that when we have a vaccine or drug available, there are multiple facilities able to scale up and manufacture and produce and fill and finish and deliver those vaccines and drugs and reagents as quickly as possible,” Biomedical Advances Research and Development Authority Director Rick Bright said during a virtual summit. Read more from Jeannie Baumann.

Gilead Drug Gets Tax Break: Gilead Sciences’ experimental treatment drug for Covid-19 secured a coveted regulatory designation that usually comes with tax breaks and a seven-year market monopoly. The FDA announced that remdesivir would get the agency’s orphan drug designation, a program usually reserved for rare illnesses affecting less than a quarter million people in the U.S. But consumer advocacy group Public Citizen railed against the designation, saying it’s given Gilead an “entirely undeserved” monopoly. Read more from Cristin Flanagan.

Meanwhile, Gilead’s decision to give remdesivir to patients in groups should speed access to the drug, despite initial confusion caused by the company’s shift away from processing requests individually. Gilead has begun shifting how it’s handling requests for “expanded access,” a legal route for patients with a life-threatening condition to access experimental drugs outside of a clinical trial. Gilead will now manage compassionate use requests in groups rather than on an a case-by-case basis.

Blood From Recovered Patients: The FDA is making it easier for critically sick patients to access a potential treatment: antibodies from the blood of people who survived. The FDA will allow doctors treating the sickest Covid-19 patients to use an experimental therapy called “convalescent plasma.” The effort is part of the FDA’s unprecedented loosening of rules for medication, diagnostic tests and more in an effort curtail the outbreak. Read more from Bloomberg News.

Training Amid Pandemic: American health-care systems will get $100 million in federal funds to provide training and resources to hospitals, emergency medical services, and 911 call centers, the HHS announced yesterday. HHS’s Office of the Assistant Secretary for Preparedness and Response will direct the funds to three health facilities that previously cared for Ebola patients, 10 regional pathogen treatment centers and 62 hospital preparedness partners, among other groups. The funds were part of the supplemental appropriations bill signed into law this month. Read more from Shira Stein.

Guidelines for Infected Health Workers: Health care workers that test positive for Covid-19 must receive two subsequent negative tests before they can return to work, the CDC is advising. If health care workers present symptoms and are unable to get tested, the CDC says they can’t return to work until they are fever-free without fever-reducing medications for at least three days, their other symptoms improve, and it’s been at least one week since the symptoms first appeared. Read more from Shira Stein.

Medical Masks Auctioned for Huge Markup: At a time when shortages of protective gear are putting health-care workers at risk, more than 750,000 medical-grade masks went up for online auction in Texas. Bottles of Purell sold for over $40. A box of 16 masks went for $170. They could be had retail for $3 each before the coronavirus. The week-long bidding that ended yesterday was hosted by the website Auctions Unlimited. The health-related products pulled in $154,000 in sales, according to Houston-based website owner Tim Worstell. He estimated that he personally made as much as $40,000 on the sales. Read more from Polly Mosendz and William Turton.

Ventilator Makers Face Parts Shortage: Runaway demand for ventilators has laid bare a grim reality for doctors who need them to treat critically ill patients: The U.S. doesn’t just have a shortage of ventilators; it doesn’t have enough parts to make more. That could make it difficult for automakers to fulfill Trump’s wish that they switch over to manufacture the life-saving devices. It’s also starting to limit companies that already specialize in making ventilators, who say their own factories can ramp up production but need supplier s across the globe to send more circuit boards, tubes and other parts. Read more from Joe Light, Zachary R. Mider and Ellen Proper.

Meanwhile, Medical device companies need clarity on which local governments and health-care providers should get priority access to life-saving devices like ventilators during the coronavirus pandemic, a leading trade group said. Concern about ventilator shortages pushed local governments and health-care providers across the U.S. to buy the devices, and companies are ramping up production to meet the demand. But some groups “should have a higher priority than others based on the acuity of patient needs in their areas,” the Advanced Medical Technology Association wrote in a letter to the Federal Emergency Management Agency yesterday. Companies don’t want to make those decisions themselves, though. Read more from Jacquie Lee.

Global Rush for Trump-Backed Virus Drug Sparks India Export Ban: India banned exports of a malaria drug backed by U.S. President Donald Trump amid a run on supplies globally, even as scientists continue to search for conclusive evidence of the medicine’s effectiveness against the novel coronavirus. Exports of hydroxychloroquine will be limited to fulfilling fully paid existing contracts, while certain shipments on humanitarian grounds may also be allowed on a case-by-case basis, according to a statement issued Wednesday by the Directorate General of Foreign Trade. The ban also does not apply to factories in its special economic zones. Read more from Bloomberg News.

Other News Stories

Trump Envisions ‘Packed’ Easter Services: Trump said he envisions “packed” U.S. churches on Easter Sunday, April 12, as he described his hope to abandon stringent public-health measures to combat the outbreak and re-open the U.S. economy in mid-April. His vision appears increasingly out-of-step with both the warnings of public health professionals and governors, who’ve ordered entire states and cities shut down in a desperate effort to slow the spread of the virus.

“Easter’s a very special day for me,” Trump said yesterday in an interview with Fox News. The holiday is “just about the time-line I think is right” for balancing public health concerns with efforts to help the economy. “I think Easter Sunday, you’ll have packed churches all over our country,” Trump said, but he said the timing could shift. Trump has said he’d re-evaluate whether to call for people to return to work after his 15-day strategy to limit social contact lapses next week. Read more from Saleha Mohsin.

Fauci Returns to White House Briefings: Anthony Fauci, the infectious disease expert who is the most credible U.S. spokesperson on the coronavirus outbreak, returned to the White House podium yesterday following a two-day absence after contradicting Trump. Fauci said it is important to obtain more data about the virus through testing to determine the next steps in the federal government’s response efforts. “We have to act, policy-wise, on data,” he said. Read more from Jordan Fabian.

Obamacare Payments Extended: Obamacare plans can extend payment deadlines during the Covid-19 national emergency, HHS said yesterday. “CMS will exercise enforcement discretion” if a health insurer on the Affordable Care Act exchanges extends premium payment deadlines and delays cancellations of coverage for non-payment, with the permission of state regulators, HHS’ Center for Consumer Information & Insurance Oversight (CCIIO) said in new guidance. Read more from Sara Hansard.

Medical Device Applications: Teleconferences will replace in-person meetings that the FDA has scheduled with medical device companies through April 30, the agency said. The FDA medical device office issued a letter to the device industry on how the agency plans to maneuver its day-to-day operations, as the federal government continues to respond to the pandemic. The Center for Devices and Radiological Health is taking “steps described in this letter to prioritize work that advances the nation’s response during this national emergency,” William Maisel, director of the office of product evaluation and quality, said yesterday.

As a result, the FDA will extend by 60 days the approval process for marketing applications that were on hold as of March 16. The extension covers responses that were due on or before April 30 to 510(k) applications, premarket approval applications, Humanitarian Device Exemption applications, and De Novo classification requests. The latter are designated for items that don’t have a previously approved similar version but can be labeled as a lower-risk Class I or Class II devices. Read more from Ayanna Alexander.

Health-Care Spending to Outpace Economic Growth: Health-care spending is expected to grow more rapidly than the rest of the economy over the next decade and to consume an increasingly larger share of gross domestic product, according to government actuaries. National health expenditures are projected to grow at an average annual rate of 5.4% from 2019-2028, at which time they would grow to 19.7% of the gross domestic product, even with a modest projected decline in the insured share of the population, the Centers for Medicare & Medicaid Services Office of the Actuary said in a report released yesterday. Read more from Sara Hansard.

Trump Says He’ll Stop Using ‘Chinese Virus’: Trump said he would stop using the term “Chinese virus,” the latest indication that the U.S. and China are seeking to deescalate their blame game over the deadly pandemic. “I don’t regret it, but they accused us of having done it through our soldiers, they said our soldiers did it on purpose, what kind of a thing is that?” Trump said in an interview yesterday with Fox News. “Look, everyone knows it came out of China, but I decided we shouldn’t make any more of a big deal out of it. I think I mad e a big deal. I think people understand it. But that all began when they said our soldiers started it. Our soldiers had nothing to do with it.” Read more from Karen Leigh.

Prince Charles Tests Positive for Covid-19: Prince Charles tested positive for the coronavirus, according to BBC News, citing a statement, Dow Jones reports. The 71-year-old heir to the throne is displaying mild symptoms “but otherwise remains in good health,” the report said quoting a spokesman. His wife, The Duchess of Cornwall, was tested but does not have the virus, the report said.

Today on the Hill

White House

  • 7am: Sec. Mike Pompeo hosts virtual meeting of G7 Foreign Ministers
  • 9:00 am – In-House Pool Call Time
  • 11:30 am – Trump receives intelligence briefing
  • 11:35 am – Pompeo holds press conference at Dept. of State
  • 2:00 pm -Trump participates in call with non-profit orgs. on Covid-19 response
  • 5:00 pm – Members of Coronavirus task force hold press briefing
  • President Trump has no public events scheduled


  • Senate Majority Leader Mitch McConnell said early this morning that the Senate would vote on the $2 trillion stimulus deal later Wednesday; the chamber meets at noon


  • Still in recess

Additional legislation introduced Yesterday

  • H.R.6380 — 116th Congress (2019-2020)To temporarily provide for Federal insurance of transaction accounts during the COVID-19 emergency.
  • H.R.6381 — 116th Congress (2019-2020)To require the Board of Governors of the Federal Reserve System to provide zero-interest loans to minority depository institutions and community development financial institutions to combat COVID-19, and for other purposes.
  • H.R.6382 — 116th Congress (2019-2020)To provide assistance for fair housing enforcement activities associated with the COVID-19 pandemic, and for other purposes.
  • H.R.6383 — 116th Congress (2019-2020)To provide for research and education with respect to uterine fibroids, and for other purposes.
  • H.R.6384 — 116th Congress (2019-2020)To provide community-based nonprofit feeding and anti-hunger groups with funding to partner with small and mid-sized restaurants to expand meal access and delivery for low-income and vulnerable populations during a pandemic or public health emergency.
  • H.Res.907 — 116th Congress (2019-2020)Expressing the sense of the House of Representatives that the Government of the People’s Republic of China made multiple, serious mistakes in the early stages of the COVID-19 outbreak that heightened the severity and spread of the ongoing COVID-19 pandemic, which include the Chinese Government’s intentional spread of misinformation to downplay the risks of the virus, a refusal to cooperate with international health authorities, internal censorship of doctors and journalists, and malicious disregard for the health of ethnic minorities.
  • S.3572 — 116th Congress (2019-2020)A bill to require the removal of United States Armed Forces from Saudi Arabia.
  • S.3573 — 116th Congress (2019-2020)A bill to require personal protective equipment to be included in the strategic national stockpile, and to require the Federal Government to procure such equipment from United States sources, and for other purposes.
  • S.3574 — 116th Congress (2019-2020)A bill to protect consumers from price-gouging during emergencies.
  • S.3575 — 116th Congress (2019-2020)A bill to amend title 38, United States Code, to restore entitlement to rehabilitation programs for veterans affected by school closures or disapprovals, and for other purposes.
  • S.3576 — 116th Congress (2019-2020)A bill to clarify that the Federal Trade Commission Act prohibits excessive and unjustified price increases in the sale of certain products and services when an emergency or disaster results in abnormal disruptions of the market, and for other purposes.
  •  S.3577 — 116th Congress (2019-2020)A bill to amend the Internal Revenue Code of 1986 to provide a tax exemption for distilled spirits used for hand sanitizer.
  • S.3578 — 116th Congress (2019-2020)A bill to provide oversight for the care and assistance provided to businesses under the coronavirus relief package.
  • S.Res.551 — 116th Congress (2019-2020)A resolution providing that the salaries of Senators shall be held in escrow until the Senate has passed legislation that appropriately addresses the COVID-19 outbreak.
  • S.Res.552 — 116th Congress (2019-2020)A resolution supporting an international investigation into the handling by the Government of the People’s Republic of China of COVID-19 and the impact of handling COVID-19 in that manner on the people of the United States and other nations.
  • S.Res.553 — 116th Congress (2019-2020)A resolution expressing the sense of the Senate that the Government of the People’s Republic of China made multiple serious mistakes in the early stages of the COVID-19 outbreak that heightened the severity and spread of the ongoing COVID-19 pandemic, including the intentional spread of misinformation to downplay the risks of COVID-19, a refusal to cooperate with international health authorities, internal censorship of doctors and journalists, and a malicious disregard for the health of ethnic minorities.

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