COVID-19 Federal Update 4-2-2020
SBA Loans Guidance
Treasury Issues Guidelines, Application Form for SBA Paycheck Protection Program – SEE ATTACHMENTS
The Treasury Department Tuesday issued much-anticipated guidance for the Paycheck Protection Program, which starting this week will provide up to $350 billion in fully forgivable loans to help small businesses maintain payrolls during the coronavirus pandemic. The loans are fully guaranteed by the Small Business Administration, but the SBA will waive all SBA guaranty fees. PPP loans are made for two years at a 0.5% fixed rate with payments deferred for six months.
Coronavirus Relief Package #4 Discussions
Call Time: Potential coronavirus legislation may be discussed during press conferences this morning from both Republican and Democrat House leaders: Pelosi will hold a press conference call at 10:45a.m. House Minority Leader Kevin McCarthy (R-Calif.) will hold an 11:30a.m. press conference call with Republican Reps. Greg Walden (Ore.), Kevin Brady (Texas), French Hill (Ark.), and Patrick McHenry (N.C.).
Democrats Want Health Center in Next Bill: Speaker Nancy Pelosi (D-Calif.) said that the next coronavirus stimulus should include at least $760 billion over five years for water projects, broadband and transportation—plus $10 billion for community health centers and more for housing and education—as a way to enhance U.S. infrastructure and the economy.
“We need to invest in our infrastructure to address some of the critical impacts and vulnerabilities that have been laid bare by the coronavirus,” Pelosi said on a call with reporters yesterday.
Pelosi has said that the $2.2 trillion package signed into law last week, the third virus-related congressional effort, was aimed at rescuing the U.S. economy as businesses close and people stay home amid the widening outbreak. The next measure, which Congress could take up after April 20 when lawmakers return from recess, will aim to stimulate an economic rebound, she said.
Pelosi and other Democrats raised concerns yesterday that the outbreak will worsen inequality in health-care access and in the ability of Americans to keep working or going to school while following social distancing guidelines. House Majority Whip Jim Clyburn (D-S.C.) said that the virus response should focus on “equitable” recovery, unlike stimulus measures to respond to the 2008 recession and the Great Depression.
“I am very concerned that things are going to get worse in rural and poor areas” that don’t have internet access or community health centers, Clyburn said.
The total cost for this part of Democrats’ phase-four proposal would exceed the $760 billion infrastructure plan that they released in late January, by adding $10 billion for health-care centers and additional funding for housing and education, Pelosi said. Read more from Erik Wasson.
Senate Majority Leader Mitch McConnell (R-Ky.) is less enthusiastic about a phase four bill, telling the Washington Post in an interview yesterday he will move slowly on considering any follow-up coronavirus aid legislation, and will ignore attempts by Pelosi to jump-start discussions.
Industry Pipes Up on Dem’s Stimulus Bill: Speaker Nancy Pelosi (D-Calif.) said the next coronavirus stimulus bill should include at least $760 billion over five years for water projects, transportation and other items as a way to strengthen U.S. infrastructure and the economy.
“We need to invest in our infrastructure to address some of the critical impacts and vulnerabilities that have been laid bare by the coronavirus,” Pelosi said yesterday on a call with reporters.
Dean Scott highlights the aging water and wastewater infrastructure provisions in the plan. Five U.S. steel-industry groups are also pushing for infrastructure investments to be included in the next phase of coronavirus stimulus.
“Making a long-term and robust infrastructure investment now will not only respond to the urgent transportation system needs that are well known, but it also will create high paying jobs allowing businesses and families to recover from this extremely difficult economic shock,” they said in a letter to House and Senate leaders.
The next measure — the fourth phase of virus response, which Congress could take up when it returns April 20 — will be intended to stimulate an economic rebound, Pelosi said.
Senate Environment and Public Works Chairman John Barrasso (R-Wyo.), has also called for his $287 billion surface transportation renewal bill to be part of the next coronavirus package.
The $760 billion House Democrat plan is originally part of their January infrastructure framework to reauthorize federal funding for highways, transit projects, and bridges. The current authorization (Public Law 114-94) expires in September. However, leadership didn’t provide specific legislation or a way to pay for it, the latter of which has been the subject of talks between House Ways and Means Chairman Richard Neal (D-Mass.) and Treasury Secretary Steven Mnuchin.
The total cost for this part of Democrats’ phase-four virus proposal would exceed the plan they released in late January by adding $10 billion for health-care centers and additional funds for housing and education, Pelosi said.
Democrats have been reluctant to release a plan to pay for infrastructure without the White House also assuming some political risk for what would be an expensive proposal.
President Donald Trump said Tuesday that the U.S. should borrow the money to pay for infrastructure at the low interest rates currently available, but he hasn’t released his own plan for what should be in a bill. Pelosi has not said she would support borrowing money specifically for infrastructure.
Trump Considers Hazard Pay for Health Workers: President Donald Trump said his administration is considering ways to compensate health-care workers with supplemental hazard pay as they grapple with the coronavirus outbreak. “It’s something we’re discussing in terms of bonus or bonus pay,” Trump said last night during a White House briefing. “They’re like warriors, they’re like soldiers,” he said of doctors, nurses and other health-care workers dealing with the pandemic.
The administration has previously signaled it would pursue hazard pay for health workers as part of a phase four emergency plan with Congress. The call for additional pay has come amid reports that many hospital employees are caring for coronavirus patients without adequate protective gear, like masks. Read more from Mario Parker and Josh Wingrove.
Gas Tax Pros & Cons: The American Farm Bureau Federation and the American Trucking Associations are suggesting Congress include a federal gas tax increase in the upcoming recovery package to cover needed upgrades to infrastructure.
The policy could be implemented “without adding a dime to a federal deficit that has exploded in recent weeks,” Farm Bureau President Zippy Duvall and ATA President Chris Spear said in a letter to Senate Finance Chairman Chuck Grassley (R-Iowa), House Ways and Means Chairman Neal and the minority leaders of the two panels.
The groups say the 18.4 cents federal gas tax that supports the Highway Trust Fund hasn’t been raised since 1993 but the coronavirus crisis presents the right time to raise it. “Gas is selling at historically low prices,” they wrote. “Compared to one year ago, Americans are paying about 60 cents per gallon less today for fuel.”
Revenue from the gas tax is funneled into the trust fund, which that pays for highways, bridges, and roads.
However that funding source is declining due to coronavirus restrictions on travel. A Tax Foundation study released Tuesday found that personal travel has declined almost 40% since Feb. 22, meaning that the federal government is likely collecting fewer gas tax dollars.
Industry Concerns on Disbursing Relief Funds
Tomorrow is the deadline to distribute coronavirus aid from the third stimulus package (Public Law 116-136) to transit agencies. The Transportation Department would receive more than $36 billion, according to the BGOV Bill Summary, including:
- $25 billion for Federal Transit Administration grants that could be used for operating expenses relating to the coronavirus, including lost revenue, purchasing personal protective equipment, and preventative maintenance and cleaning.
- $10 billion for the FAA’s Airport Improvement Program. At least $500 million would be available to allow for a 100% federal share for grants provided under the fiscal 2020 appropriations law (Public Law 116-94). The measure would provide a separate $56 million for the Essential Air Service that preserves operations at smaller airports.
- $1 billion for Amtrak, including $526 million for National Network Grants and $492 million for Northeast Corridor Grants. The bill would require weekly reports on employee furloughs related to the coronavirus and would require that employees have the opportunity to be recalled when service is restored to pre-March 1 levels.
Airline Concerns: Speaker Pelosi and House Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) criticized the conditions the U.S. Treasury Department has proposed for providing emergency payroll-assistance grants to airlines, joining a growing backlash by industry and union groups, Bloomberg News reports.
The two lawmakers echoed comments from a regional airlines trade group and flight-attendant unions that the federal government’s demand for airline equity stakes could prompt carriers to decline the help. If the government requires airlines to give up large equity stakes, it would amount to “a poison pill” that will lead to job losses, three unions said in a letter to Treasury Secretary Mnuchin.
Small, non-commercial aircraft operators asked the Treasury Department yesterday to clarify how carriers that aren’t publicly traded will receive coronavirus aid, as the agency contemplates whether airlines should give up equity stakes in exchange for grants.
Treasury said Monday said airlines will be required to propose up-front how the government could retain financial stakes in their companies, possibly with stock, options, or warrants. Many non-commercial aircraft operators aren’t publicly traded, the group said in a letter. This would make it difficult for the government to take a stake in their businesses.
A separate pool of $100 million was set aside for this group.
Research Efforts, Testing and Treatments
Trump Seeks Help From Walmart on Surgical Gowns: Walmart will help the federal government procure surgical gowns to stem the shortage of personal protective equipment, after Trump placed a call directly to CEO Doug McMillon. The world’s largest retailer will delve into its sprawling global supply chain to identify a company to make an undisclosed number of gowns, a Walmart spokesman said by phone yesterday. Walmart does not sell surgical gowns in its stores, but some of its existing suppliers could have the capability to provide them. The ord er came in the wake of Vice President Mike Pence’s visit to a Walmart distribution center in Virginia.
“We just ordered a lot from Walmart,” Trump said last night at the press briefing, adding that McMillon “was very excited by it.” Read more from Matthew Boyle.
White House Equivocating on Masks: The White House is debating whether to advise Americans to wear masks in public to protect one another from Covid-19, as officials examine whether there’s a genuine public health benefit and worry it may undermine social distancing. Still, Trump’s coronavirus task force is nearing a consensus on the matter and could issue guidance within days, according to a person familiar with the matter.
But a second official said it’s not likely masks will be recommended in the short-term because the task force is still discussing the issue. Trump’s administration is awaiting a report from the Centers for Disease Control and Prevention, which Pence said hasn’t been finished yet. Trump’s task force “will bring those recommendations to the president at the appropriate time,” Pence said on CNN. Read more from Saleha Mohsin, Jordan Fabian and Josh Wingrove.
Neal Queries Trump Over Gear Shortages: House Ways and Means Chairman Richard Neal (D-Mass.) in a letter yesterday urged the administration to provide Congress more details on how it’s addressing shortages of personal protective equipment (PPE). Neal “raised concerns about the challenges states and health-care providers are facing in securing PPE from the Strategic National Stockpile (SNS) and called on the Administration to help states secure PPE from private vendors,” according to a statement. Read the letter here.
Trump at yesterday’s White House briefing confirmed reports the nation’s stockpile of PPE was nearly empty, and that supplies were now going directly to hospitals.
FDA Urged to Reverse Gay Blood Donor Ban: House Oversight and Reform Chairwoman Carolyn Maloney (D-N.Y.) and panel member Alexandria Ocasio-Cortez (D-N.Y.) urged the FDA in a letter yesterday to “revise its policy of turning away blood donations from gay and bisexual men in light of the long-term impacts of the coronavirus crisis on the nation’s blood supply,” according to a statement, saying the ban is “antiquated” and “undermines crucial efforts to increase the nation’s blood supply.” Read the letter here.
Birx Urges Researchers to Create Antibody Tests for Health Workers: Universities have been called by the White House coronavirus coordinator to develop tests quickly that could screen an entire health system for Covid-19 antibodies. “We have the most brilliant scientists in the world in our universities in state after state,” Dr. Deborah L. Birx said during yesterday’s White House press briefing. “Our universities can do that by Friday. So I’m putting that challenge out to them to really work on that and do that.”
ELISA tests—the enzyme-linked immunosorbent assay—are most commonly used to detect HIV antibodies and antigens in the blood. It would be very reassuring to front line health-care workers to know they are safe from re-infection if these tests could tell them they were infected but they now have the antibodies to protect them, said Birx, a State Department immunologist advising the White House on its response to the outbreak. Read more from Jeannie Baumann.
Drug Ready for Trial in Health Workers: The drug that Trump has touted as a treatment for coronavirus patients will be put to the test this month in a clinical trial assessing how well it really protects health-care workers. The Duke Clinical Research Institute will lead the study and begin by building a registry of health-care workers nationwide, according to the Patient-Centered Outcomes Research Institute, which is providing up to $50 million for the research. Clinicians will use the registry to recruit 15,000 people across 40 site s in the U.S. to participate in a randomized, placebo-controlled trial set to start this month. Jacquie Lee reports.
Demand for hydroxychloroquine-based drugs has surged since Trump first put it in the spotlight. The FDA formally put the substance on the drug shortage list Tuesday, following reports of hoarding and patients using it to prevent Covid-19. Some patients who took the drug before the pandemic, usually for arthritis and lupus, are now unable to get their prescriptions filled. Anna Edney reports.
Reopening Obamacare Amid Virus: Trump is falling under criticism for balking at taking full advantage of the Affordable Care Act as the number of coronavirus cases in the U.S. tops 200,000. The Trump administration signaled late Tuesday it won’t reopen Obamacare exchanges to let uninsured Americans purchase health coverage during the pandemic. Several congressional Democrats warned yesterday that such a decision could leave millions of Americans without health insurance and in need of health services. Critics say that could be Trump’s goal, aligned with his efforts to repeal the ACA, Alex Ruoff and Lydia Wheeler report. Trump at yesterday’s White House briefing said he recognized the issue and was looking into the matter.
Hyped Malaria Drug Not Showing Much Effect at One Paris Hospital: Hydroxychloroquine, the malaria medicine that some doctors have been trying as a treatment against Covid-19, hasn’t shown encouraging results so far at France’s Pitie Salpetriere hospital.
“We’ve used it a fair bit because it was one of the hopes,” Eric Caumes, head of infectious diseases at the Paris hospital, said on BFM TV. “But we don’t have the impression that there’s spectacular efficacy. It’s even probably not effective.” Caumes said he would have more formal data around the end of the week. Read more from Marthe Fourcade.
Congressional Coronavirus Task Force: House Homeland Security lawmakers want a congressional commission to evaluate how prepared the U.S. was for a global pandemic to better position the country for the next public health crisis, Homeland Security Chairman Bennie Thompson (D-Miss.) wrote in a statement. Thompson and others plan to unveil a bill to create an independent commission, demanding a “full accounting.” That task force would be modeled after the 9/11 Commission, Shaun Courtney reports.
Other News Stories
China Said Concealed Extent of Virus: China has been concealing the extent of the coronavirus outbreak in its borders, underreporting both the total cases and deaths it’s suffered from the disease, the U.S. intelligence community said in a classified report to the White House, three officials said. The thrust is that Beijing’s public reporting on both cases and deaths is intentionally incomplete, they said. Two officials said the report concludes that China’s numbers are fake. The report was received by the White House last week, on e of the officials said.
The outbreak began in China’s Hubei province in late 2019, but the country has publicly reported only about 82,000 cases and 3,300 deaths, according to data compiled by Johns Hopkins University. That contrasts with over 189,000 cases and over 4,000 deaths in the U.S., which has the largest publicly reported virus outbreak in the world. While China eventually imposed a strict lockdown, there has been considerable skepticism of China’s reported numbers. Nick Wadhams and Jennifer Jacobs have more.
China rejected the intelligence community’s conclusion, and accused the U.S. of seeking to shift the blame for its own handling of the outbreak. Foreign Ministry spokeswoman Hua Chunying on Thursday defended as “open and transparent” China’s response to the virus first identified in December in the central Chinese city of Wuhan. She was responding to a Bloomberg News report saying that the U.S. intelligence community had concluded in a classified report to the White House that Beijing under-repo rted both total cases and deaths from the disease.
“Some U.S. officials just want to shift the blame,” Hua told a regular briefing in Beijing. “Actually we don’t want to fall into an argument with them, but faced with such repeated moral slander by them, I feel compelled to take some time and clarify the truth again.” Hua questioned the speed of the U.S.’s response to the virus after banning arrivals from China on Feb. 2. “Can anyone tell us what the U.S. has done in the following two months?” she said. Read more from Bloomberg News.
Vape Shops Lobbying to Stay Open: Pro-vaping groups are mounting an uphill campaign to persuade federal and state authorities to let vape shops stay open, even as other retailers close their doors during the growing outbreak of the new coronavirus. Advocates say vape shops are essential businesses because they’re keeping Americans from buying regular cigarettes. If successful, an industry that was just granted more time to sell some popular flavors would score a key win.
Some of the largest sellers of vape products and e-cigarettes, including Juul and Imperial Brands, parent of Blu, could remain largely unhurt by shutdowns as the convenience stores and gas stations that sell their products have generally been permitted to stay open. And American Vaping Association President Greg Conley said the success of the firearms lobby to get gun shops added to a federal list of “essential critical infrastructure workers” showed that the Trump administration is open to expanding it. Read more from Alex Ruoff.
FTC Sues to Unwind Altria From Juul: The Federal Trade Commission moved to reverse Altria’s troubled $12.8 billion deal to take a stake in vaping company Juul Labs, saying the companies are competitors who shouldn’t be in business together. The FTC said Altria and Juul have monitored one another’s e-cigarette prices closely and “raced to innovate.” Altria, which makes Marlboro cigarettes, also leveraged its ownership of leading brands across the tobacco industry to secure favorable shelf space at retailers across the U.S., the complaint alleges.
“Altria and Juul were competitors in the market for closed-system e-cigarettes. By the end of 2018, Altria orchestrated its exit from the e-cigarette market and became Juul’s largest investor,” said Ian Conner, the director of the Bureau of Competition. The two companies “turned from competitors to collaborators by eliminating competition and sharing in Juul’s profits.” Read more from Angelica LaVito and Sara Forden.
Trump May Restrict Flights From New York: Trump said his administration is weighing whether to halt flights from some of the cities hardest hit by the coronavirus outbreak — including New York and Miami — but is wary of further harming the airline industry. “We’re certainly looking at it but once you do that you really are clamping down on an industry that is desperately needed,” Trump said last night at a White House press briefing.
“I am looking where flights are going into hot spots.” Trump said when asked if he was considering a temporary ban on all domestic flights. “Some of those flights I didn’t like from the beginning, but closing up every single flight on every single airline, that’s a very, very, very rough decision. But we are thinking about hot spots, where you go from spot to spot, both hot. And we’ll let you know fairly soon.” Read more from Mario Parker and Josh Wingrove.
Boeing Max Return at Risk: Of all the twists that have complicated the un-grounding of Boeing’s 737 Max, this one might be the strangest: A global pandemic is keeping regulators from being in the same room.
Boeing is sticking to its estimate of a mid-year return to service. But to do so, the Chicago-based manufacturer will have to pull off the ultimate work-from-home challenge: certifying an airplane with regulators who are self-isolating on different continents. Bloomberg News overviews how the company and regulators are handling the situation.
Boeing to Offer Early Retirement, Buyouts Due to Virus: Boeing is expected to offer early retirement and buyout packages to employees as it deals with impacts from the coronavirus outbreak, the Wall Street Journal reports, citing unidentified people familiar with the matter.
Coast Guard Warns Cruise Ships to Prepare: Cruise ships should be ready to care for passengers and crew with Covid-19 and other flulike symptoms at sea, the U.S. Coast Guard has advised in a memo dated March 29, saying medical evacuations are contributing to strained health-care resources in the Southeast. The Coast Guard isn’t saying it will refuse evacuations or not let ships dock. The advisory applies to cruise ships flying foreign flags — virtually the entire industry. Three Carnival vessels, including two with sick passengers, are s teaming toward Fort Lauderdale, Florida and are due to arrive in days. Read more from Jonathan Levin.
NTSB Investigations Hampered: Transportation investigators haven’t traveled to any of the seven reported U.S. plane accidents since March 16 because of the coronavirus pandemic, the National Transportation Safety Board said in a statement yesterday.
The NTSB typically investigates all deadly aircraft accidents that happen in the U.S., plus accidents that significantly damage the plane. Staff sometimes travels to see the damage up-close. That’s not happening right now, the board’s spokesperson said, stalling their accident investigations. That may change on a case-by-case basis, depending on if investigators can collect details from a particular accident without traveling.
Chao Thanks Truckers: Transportation Secretary Elaine Chao addressed the nation’s truck drivers by radio yesterday, and said the agency is working with states to make sure that they aren’t impeded by quarantine orders. For example, she has worked with locked-down states to keep rest stops and roads open to truckers so they can continue delivering food and supplies.
“The whole country is cheering for America’s truck drivers,” Chao said on Sirius XM’s Road Dog Trucking.
EPA Can’t Hide Emissions Modeling Equations: The Environmental Protection Agency can’t keep information about its vehicle emissions modeling program from an environmental group, the Second Circuit said yesterday. The EPA argued releasing the core model would reveal its decision whether to include various analytical tools, and expose agency thinking about the need for different types of analysis in a certain area.
The EPA has relied on its Optimization Model for Reducing Emissions of Greenhouse Gases from Automobiles since 2010 to set standards under the Clean Air Act. The model can predict which technologies car manufacturers will use, when they will incorporate those technologies, and how much it costs to apply. Maya Earls explains the judge’s ruling.
E-scooters in N.Y. Budget: New York state’s final budget for fiscal year 2021, which was approved by the Senate yesterday, included a measure that would legalize the use of electric bikes and scooters. The state Legislature had passed a similar measure last year, but the bill was vetoed by the governor who said it needed additional provisions. The new bill has Gov. Andrew Cuomo‘s (D) support and includes several tweaks: requiring the use of a helmet and allowing municipalities to set their own rules of operation. The Senate passed the bill yesterday in a 39-22 vote.
Today on the Hill
- Trump has no public events scheduled
- 10:00 am – In-House Pool Call Time
- 5:00 pm – Members of the Coronavirus Task Force hold a press briefing
- On recess and scheduled to return April 20th
- On recess