COVID-19 Federal Update 3-31-2020

March 31, 2020

Coronavirus Response Package #4 Discussions

House Speaker Nancy Pelosi has begun assembling a next round of stimulus legislation that would include significant funds for cash-strapped states facing record revenue shortfalls and more direct payments to individuals.

Just three days after the largest economic relief package in U.S. history was enacted, Pelosi said Monday she is aiming to have a bipartisan bill ready to vote on when the House returns from recess after April 20.

“We are not coming back for a few weeks but I do think we can do our committee work in the meantime,” Pelosi told reporters on a conference call.

Many of the priorities she and other senior Democrats listed had been previously outlined and were part of their alternative stimulus legislation but were rejected by Senate leaders in negotiations with President Donald Trump’s administration. Pelosi gave no details on how much the plan would cost.

In an interview with the New York Times published on Monday, she said that another possibility was getting rid of the limit on state and local tax deductions, or SALT, that was part of the president’s 2017 tax overhaul. Pelosi’s home state of California was among those affected by the SALT limits.

She also suggested that such a move, sure to encounter strong Republican opposition, should be retroactive.

A spokesman for Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, dismissed the idea as “a nonstarter.” “Millionaires don’t need a new tax break as the federal government spends trillions of dollars to fight a pandemic.” said the spokesman, Michael Zona.

Pelosi said she’s working with Energy and Commerce Chairman Frank Pallone (D-N.J.) on proposals to improve clean water facilities and promote better access to broadband. She said Education and Labor Chairman Bobby Scott (D-Va.) is working on plans for a fourth package that could be taken up as soon as the House returns to work later this spring.

The speaker didn’t mention the plans being developed by House Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) and whether she would attempt to include a highway and transit reauthorization plan in the package. She also didn’t discuss more funding for aviation programs or rail.

Pelosi said general fund financing will be used for these and many other priorities in the next passage. But she said there may be other sources.

“We want to use the tax code — Build America Bonds — for some of our infrastructure,” she said.

Trump signed the $2 trillion stimulus package into law last Friday. But there’s been a growing consensus in Washington that more will be needed to revive an economy being choked by business shutdowns and restrictions being imposed in states like New York where the outbreak has been most pronounced.

Trump has abandoned his ambition to return American life to normal by Easter and said guidelines for Americans to practice “social distancing” would remain in place until at least April 30, as he warned that 100,000 or more people may die.

There already appears to be appetite building in the Senate for another round of relief.

“If the crisis continues for substantially longer I have no doubt that the Congress will have to act again,” Texas Republican Senator Ted Cruz said Monday on Bloomberg Television.

House Energy and Commerce Chairman Frank Pallone said on the Democrats’ call that the supply chain for protective equipment for medical personnel is stretched and the shortages may not be completely alleviated by the last stimulus.

Pallone added that the next bill may create a federal point-person for the medical equipment supply chain and a database.

He said providing free treatment for Covid-19 and expanding access to Internet broadband and clean water also will be priorities for Democrats in the next congressional response to the coronavirus pandemic.

Education and Labor Chairman Bobby Scott said Democrats want to mandate that the Occupational Safety and Health Administration set enforceable standards for guarding against airborne diseases for health care workers and expand regulations to cover more workers, including individuals working at grocery stores and other essential businesses.

“It is clear we need to do more and that is particularly true in the case of protecting health care workers and front-line responders,” Scott said.

On Monday’s call, Pelosi also said she wants the next bill to have another round of direct cash payments for individuals, and these payments could be larger than the last round.

Last week’s bill provided direct payments of $1,200 for each adult and $500 for each child, with the payment phasing out for individuals making more than $75,000 per year and couples making more than $150,000.

Those without income, or with income solely from government benefits, like seniors on Social Security, are eligible. Individuals making above $99,000 and couples making more than $198,000 receive no payment. Checks are expected to go out in April.

Pelosi said Democrats will again attempt to increase food stamp benefits, expand family leave for those caring for covid-19 patients, include pension guarantees, and propose infrastructure projects.

House Democrats plan a caucus-wide call Friday afternoon to discuss ideas for the new bill. The House is not expected to return to Washington for votes before April 20, but could return if there is a need to pass legislation, Majority Leader Steny Hoyer told lawmakers Monday. Pelosi said she didn’t expect agreement on a bipartisan bill before April 20.

Democratic Sen.Bob Menendez is pushing to have his legislation that would allow the Fed to buy municipal debt included in a potential fourth coronavirus rescue package, according to a congressional aide. Menendez, who sits on the Senate Banking Committee, introduced a bill earlier this month that would amend the Federal Reserve Act to allow the U.S. central bank to purchase municipal bonds under “unusual and exigent circumstances”

While on Fox News Trump said that hazard pay for hospital workers dealing with the coronavirus is being “looked at.” “We are asking the hospitals to look at doing something, “including bonuses”, We are looking at doing it through the hospitals.

The White House and congressional Democrats are preparing for a fourth round of economic stimulus to get the U.S. through its coronavirus outbreak, even while they’re still arguing over the $2 trillion measure President Donald Trump signed Friday.

White House officials have compiled lists of requests from government agencies totaling roughly $600 billion, according to people familiar with the matter. The proposals include more state aid as well as financial assistance for mortgage markets and the travel industries.

Industries That Missed Out on Stimulus Shoot for the Next One

Industries that missed out on the largest stimulus bill in U.S. history are already lobbying to ensure they get a piece of the next one.

Restaurant owners are asking Congress for a new insurance program to cover pandemic-related losses. Hotel operators are pleading for larger loans. Renewable power developers want money to keep solar installers on the job. And the U.S. Chamber of Commerce is pitching its initiative to rebuild roads and bridges.

It’s a lobbying frenzy that has been stoked by the $2 trillion spending bill signed by President Donald Trump on Friday to blunt economic damage from the coronavirus pandemic.

Lawmakers have made it clear further help is likely.

“What we’ve done now is emergency relief,” Senator Ted Cruz, a Republican from Texas, said on Bloomberg Television. “If the crisis continues for substantially longer I have no doubt that the Congress will have to act yet again.”

House Speaker Nancy Pelosi said on Monday that she did not expect agreement on another bill before April 20 and vowed that a future package would do more to protect workers and help states.

“We are not coming back for a few weeks but I do think we can do our committee work in the meantime,” Pelosi told reporters on a conference call.

Here are some of the industries that will be in line when the legislation comes together:

Restaurants want insurance to cover shuttered eateries

Restaurateurs are looking to Congress to fill the gap for businesses that had business interruption insurance policies but haven’t been able to use them to cover Covid-19 claims. Many of those policies require a property to have suffered physical damage and some contain explicit exclusions for losses tied to viruses.

Sean Kennedy, executive vice president of public affairs of the National Restaurant Association, said the group may intensify calls for the federal government to create a federally-backed business interruption insurance program. The group supports creating a $100 billion initiative, akin to safeguards established for the airlines after the Sept. 11, 2001, terrorist attacks, that could be used to pay for coronavirus and other future pandemic-related claims.

Restaurants rely on business interruption insurance to weather “acts of God — force majeure,” said Kennedy, whose group which represents thousands of restaurant owners and chains including McDonald’s Corp. and Chipotle Mexican Grill Inc. “If this pandemic isn’t a force majeure with the federal government, with state governments ordering that we’d be closed, I don’t know what is.”

Calls to raise the gas tax for Gateway, other projects

The next stimulus bill should be heavy on infrastructure spending with the construction season approaching, and it should include raising the federal gas tax to pay for it, said Ray LaHood, a Republican and former transportation secretary under President Barack Obama who promotes infrastructure funding through the Building America’s Future coalition.

“It’s got to be big, it’s got to be bold,” LaHood said.

States across the U.S. have major projects underway or ready, and federal funds could finish them with state dollars used for other work, LaHood said. The bill should specifically provide money for the Gateway commuter rail tunnel under the Hudson River between New Jersey and Manhattan that has been embroiled in a dispute with the Trump administration over funding, LaHood added.

The chairman of the House Transportation and Infrastructure Committee, Democrat Peter DeFazio of Oregon, has already promised to “double down on an infrastructure package that repairs the breach left by years of neglect — that rebuilds failing bridges, restores damaged highways and puts people to work on projects with jobs that cannot be exported.”

Avoiding the ‘shovel-ready’ trap

Stimulus packages during the 2008-2009 recession sought to finance “shovel-ready” projects, only to have Obama later concede that “there’s no such thing as shovel-ready projects” because of the long lead times needed for major work.

The best way to get projects done is to increase federal dollars for existing programs and funding streams, said Jim Tymon, executive director of the American Association of State Highway and Transportation Officials.

“When you’ve got programs that you know already work, let’s utilize those to get the money out on the street as quickly as possible,” Tymon said.

Hotel groups want loans of up to 400% of costs

The American Hotel & Lodging Association is pushing lawmakers to lift a cap on small business loans that was set at 250% of monthly payroll last week. The trade group wants the threshold raised to 400% of operating costs — a sum it says is needed so that owners can both pay employees and pay off their debts as travel business slowly returns.

Tori Emerson Barnes, executive vice president of public affairs and policy for the U.S. Travel Association, said expanding the loan amount would “help folks retain employees.”

“We view the bill that just passed as a relief package and in all likelihood we’re really going to have to probably seek replenishment and extension.”

While the package passed last week set aside more than $70 billion to airlines and airports, some portions of the aviation industry weren’t included and may be asking for money in future legislation. For example, there are 256 towers at smaller U.S. airports operated by private companies that could seek federal assistance.

Clean energy backers tie aid to oil purchase

A Trump administration plan to spend $3 billion buying as much as 77 million barrels of crude oil for the nation’s Strategic Petroleum Reserve was cut from last week’s legislation, after Democrats made clear they would demand clean energy investments in exchange.

That same trade could arise in another round, and lobbyists for electric vehicles, power storage companies and renewable electricity developers are already preparing.

Wind and solar developers are asking for more time to get projects in service and still collect the full value of renewable energy tax credits that are set to begin phasing down next year.

Direct payments sought for renewables

Some renewable advocates are asking Congress to allow companies to take direct payments from the Treasury in lieu of the existing tax credits, an approach that was used after the financial crisis a decade ago. They say the flexibility is needed as tax equity markets dry up, blunting the effectiveness of existing credits used to finance wind farms and solar arrays.

“Companies are in dire need of emergency relief,” said Bill Parsons, chief operating officer for the American Council on Renewable Energy.

Other clean energy advocates are looking for Congress to heighten spending on weatherization, efficiency and research and development programs.

The nuclear power industry is seeking a 30% tax credit for some expenditures converted into grants among other aid, citing “severe financial strain” being experienced among utilities and reactor operators, according to the Washington-based Nuclear Energy Institute.

Auto-parts makers want tariff relief

The trade association representing auto parts manufacturers intends to ask lawmakers to provide relief from tariffs on steel and aluminum products as well as imports from China, said Ann Wilson, senior vice president of government affairs at the Motor & Equipment Manufacturers Association.

At a minimum, lawmakers should extend current exemptions to those tariffs for one year so that companies that have obtained waivers already don’t have to re-apply, the association’s president, Bill Long, said in a March 18 letter.

MEMA and the Alliance for Automotive Innovation, which represents nearly every major automobile manufacturer, had asked lawmakers to provide loans and loan guarantees as vehicle production comes to a standstill.

While the stimulus plan put “very important credit facilities and other programs in place” to help dealers, automotive suppliers and manufacturers, “we’re going to keep looking at the situation and we’ll have to see what more might be required,” said John Bozzella, president of the alliance.

Broadcasters, newspapers want help with ad ‘carnage’

Local broadcasters slammed by an abrupt slowdown in advertising say they, too, will seek relief in coming legislation.

“The carnage in the local ad business is the worst in decades, if not ever,” said Dennis Wharton, spokesman for the National Association of Broadcasters. “Some radio and TV stations are not going to survive without additional steps.”

Two newspaper trade groups also appealed for help “to sustain our local news ecosystem.”

“The rapid contraction of advertising markets is dealing a brutal blow,” the News Media Alliance and America’s Newspapers said in a letter to Trump and congressional leaders. “While many publishers have seen increases in online traffic and digital subscriptions, the additional revenue has in no way made up for the sharp losses in ad revenue.”

More help for governors to buy equipment

States as well will be lining up for aid.

Maryland Governor Larry Hogan, who serves as the head of the National Governors Association, said Monday he has requested that “half of the next stimulus package go to states.”

“No one in the country has enough gear,” Hogan said at a press conference Monday. “Every governor in America is concerned about that.”

House Democrats — including Pelosi — already indicated that they would be receptive.

Mnuchin Pressed on Payment Timing: Rep. Josh Harder (D-Calif.) is asking Treasury Secretary Steven Mnuchin to provide details about how quickly individuals will receive direct payments passed into law last week. Harder also asked Mnuchin to provide details about how the Internal Revenue Service plans to communicate with Americans on the money distributions. “Typical bureaucratic speed will not work in this crisis,” Harder wrote in a letter to Mnuchin. Read more from Laura Davison.

Research Efforts, Testing and Treatments

Trump Says Travel Ban May Be Extended: Trump said the U.S. might expand the travel ban affecting Europe and China as well as several other countries to include additional nations as the U.S. extends its effort to prevent the spread of coronavirus. “They’ll be staying and we may add a few more,” Trump said at a White House press conference yesterday. “But the guidelines will be very much as they are, maybe even toughened up a little bit. But they’re having a big impact, they’re having a tremendous impact.”

The White House has already moved to block entry of non-U.S. citizens traveling from China, Iran, the U.K., Ireland, and 26 European countries in the Schengen Area that allow unrestricted movement among them. Read more from Justin Sink.

Trump also said he considered a national stay-at-home order to combat the coronavirus, but that it’s “pretty unlikely.”

“We’ve talked about it,” he said at the news conference. Some parts of the country “are frankly not in trouble at all,” the president said. “If we do that, I will let you know, but it’s pretty unlikely, I would think, at this time,” Trump said, Sink and Josh Wingrove report.

Ford Aims to Start Making Ventilators With GE in Three Weeks: Ford is speeding up plans to produce ventilators in cooperation with General Electric by selecting a simpler design of the medical devices and will aim to churn out 50,000 units in the next 100 days. The automaker will convert an auto-parts plant in Michigan to make breathing machines designed by Airon Corp. and licensed by GE Healthcare starting the week of April 20, according to a statement. The new configuration they’ve chosen will allow the companies to start production before another type of ventilator they announced last week, which won’t be ready until June. Read more from Keith Naughton and Richard Clough.

Hospital, Telehealth Rules Relaxed by CMS: Hospitals will be able to care for Covid-19 patients in same-day surgery centers, hotels, dorms, and other locations, under changes announced yesterday by CMS. The agency said it is temporarily waiving regulations to give hospitals “maximum flexibility” to respond to the coronavirus pandemic. Hospitals will also be able to increase their staffing capacity under the waivers, which may be key if physicians begin falling ill, and will be able to use telehealth for additional services, Shira Stein and Alexis Kramer report.

Global Update: Spain had its deadliest day yet, while Italy is discussing an extension of lockdown measures into May. New York City, which is emerging as the new epicenter of the pandemic, reported a 16% increase in deaths in six hours. Bloomberg News follows the latest here.

New York City Marshals All Hospitals: New York City is reorganizing its entire public and private hospital system, transforming some or all of them into sites for Covid-19 patients needing intensive care while other patients are diverted to temporary facilities. The city today got closer to its goal of reaching over 60,000 beds by the beginning of May, which would triple its capacity from the beginning of March, Mayor Bill de Blasio said at a news conference.

The USNS Comfort, a U.S. Navy hospital ship with 1,000 beds, arrived in the city yesterday morning and will start treating patients who don’t have the coronavirus but still need care, relieving pressure on the system. De Blasio said that the city still needs “40 more” Comfort-size ships to reach a goal of tripling hospital capacity. “That’s the magnitude of what we’re talking about,” said de Blasio, who has said half of New Yorkers could contract the virus. Read more from Amanda Albright and Henry Goldman.

New York state reported a 26% increase in Covid-19-related deaths over the last day, pushing the total above 1,200. Gov. Andrew Cuomo (D) announced the 253 new coronavirus fatalities yesterday midday even as he offered some positive news: The rise in confirmed cases is slowing, and the rate of hospital discharges has risen. “People come into the hospital. They stay for a period of time, a number of days, and then they move on,” Cuomo said. Read more from Kehsia Clukey and Christian Berthelsen.

FDA Expands Access to Gear: The FDA is taking steps to expand the availability of surgical gowns, gloves, and device sterilizers to help shield employees against the coronavirus. The FDA issued final guidance yesterday to increase the supply of personal protective equipment used by surgeons to examine their patients. The agency also released final guidance on Sunday to help device makers keep a reasonable supply of medical equipment cleaners and air purifiers. Read more from Ayanna Alexander.

Converting Nursing Homes: States should direct nursing homes to create new units for Covid-19 patients as the facilities take on more overflow patients from nearby hospitals overwhelmed by the pandemic, an industry group urged. They should also explore moving nursing home residents to other facilities to create dedicated coronavirus treatment centers that can take hospital discharges, the American Health Care Association, which represents the nursing home industry, said in the letter. Read more from Tony Pugh.

Trump’s Easter Restart Undone by His Experts: As Trump’s coronavirus response team gathered at the White House Sunday to discuss re-opening the U.S. for business by Easter, his top health experts painted a troubling picture of what lay ahead.

Deborah Birx, an immunologist picked by Vice President Mike Pence to weigh the ailment’s impact, cautioned that the U.S. outbreak was still two weeks away from its peak. Her reading of the data also led her to an even more worrisome conclusion: that the nation was likely tens of thousands of hospital beds short of the anticipated need.

The conversation moved into the Oval Office, where aides presented Trump with their harrowing findings, according to two people familiar with the matter. Birx and her longtime mentor, Anthony Fauci, told the president that the virus could kill 100,000 to 200,000 Americans and infect millions.

The fresh information — and unanimity among Trump’s top public-health advisers — set the stage for a reversal on Sunday by the president, who had said a week earlier that he wanted to relax by Easter, April 12, the strictest social-distancing rules that were smothering the U.S. economy. Justin Sink, Jennifer Jacobs and Jordan Fabian have more on what led to Trump’s change in decision.

Inmates Feared at Risk: House Judiciary Chairman Jerrold Nadler (D-N.Y.) and Rep. Karen Bass (D-Calif.) called on Attorney General William Barr to move “medically-compromised, elderly, and pregnant prisoners” held by the Federal Bureau of Prisons to confinement at home to protect them from the coronavirus crisis. “In addition, we urge that you use every tool at your disposal to release as many prisoners as possible,” the lawmakers said in a letter to Barr, citing authority given to him under the stimulus package, Vivek Shaknar reports.

Europe Could Start Stabilizing Soon: European countries that took measures two to three weeks ago will probably begin to show some signs of stabilization soon, according to Mike Ryan, head of health emergencies at the World Health Organization. WHO hopes that Italy and Spain are almost at their peak, though reducing the number of new cases requires proactive measures, Ryan said at a press briefing yesterday.

To know if they’re testing widely enough, countries should be getting about 10 negative results for every confirmed infection, Ryan added. “If 80 or 90% of the people you test are positive, you are probably missing a lot of cases.” All Covid-19 patients should be taken to health facilities instead of staying at home, and any close contacts also ideally should be isolated outside the home, Ryan said. Read more from Bloomberg News.

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