COVID-19 – Morning Federal Update – 3-23-2020

March 23, 2020

Over the Weekend

Senate Democrats blocked Majority Leader Mitch McConnell’s attempt to advance a coronavirus economic rescue package Sunday after leaders in both chambers disagreed on how to spend nearly $2 trillion.  The 47-47 vote, with 60 needed to advance the measure, puts in question McConnell’s plan for the Senate to pass the bill Monday. Both parties want an immediate and extensive rescue for an economy ravaged by the coronavirus. But they continue to differ on key sections, including a $500 billion chunk of the bill that could be used to help corporations, including airlines, or state and local governments.  McConnell had urged senators to advance the measure, which he called a “shell” that would allow lawmakers to continue negotiating toward a final plan.

House Speaker Nancy Pelosi left a meeting in McConnell’s office earlier Sunday saying they had no deal and the House would write its own package — a move that could add days of partisan wrangling.

McConnell’s team of senior Republicans had agreed to add hundreds of billions of dollars in spending, including additional unemployment aid and public health spending, but Democrats remained unsatisfied and charged that Republicans were focused on corporations over workers.

A major package remains likely but now could take additional time for the two parties to work out their differences.

Additional legislation introduced over the weekend


  • S.3557 — 116th Congress (2019-2020)A bill to amend the Internal Revenue Code of 1986 to terminate required minimum distributions under tax-favored retirement plans.
  • S.3558 — 116th Congress (2019-2020)A bill to require the Securities and Exchange Commission to prevent the Financial Industry Regulatory Authority from enforcing a certain rule of that Authority.
  • S.3559 — 116th Congress (2019-2020)A bill to provide emergency financial assistance to rural health care facilities and providers impacted by the COVID-19 emergency.
  • S.3560 — 116th Congress (2019-2020)A bill to amend the Truth in Lending Act to extend the consumer credit protections provided to members of the Armed Forces and their dependents under title 10, United States Code, to all consumers.
  • S.3561 — 116th Congress (2019-2020)A bill to require Federal agencies to permit employees to telework full-time during the public health emergency relating to COVID-19, and for other purposes.
  • S.3562 — 116th Congress (2019-2020)A bill to provide supplemental appropriations for the Child Care and Development Block Grant program, and the Head Start and Early Head Start programs, and for other purposes.
  • S.3563 — 116th Congress (2019-2020)A bill to modify nutrition programs to address the Coronavirus Disease 2019, and for other purposes.
  • S.3564 — 116th Congress (2019-2020)A bill to amend title XIX of the Social Security Act to require States to provide medical assistance for COVID-19 treatment services for individuals who are diagnosed with COVID-19, and for other purposes.
  • S.3565 — 116th Congress (2019-2020)A bill to amend the Fair Debt Collection Practices Act to provide additional protections for consumers and small business owners from debt collection during a major disaster or emergency.
  • S.3566 — 116th Congress (2019-2020)A bill to prohibit depository institutions from assessing overdraft and non-sufficient fund fees during the novel coronavirus crisis and other disasters, and for other purposes.
  • S.3567 — 116th Congress (2019-2020)A bill to provide State funding to ensure that essential workers can access child care.

McConnell’s $2 Trillion economic package

Senate Majority Leader Mitch McConnell unveiled a $2 trillion economic rescue package Sunday with money for middle-class taxpayers, the unemployed and even local governments.

Republicans continued to negotiate the deal after Democrats blocked the first effort to advance the measure because they said it gave too much discretion to the Treasury Department and didn’t do enough for workers.

Checks to unemployed and middle class

The plan includes payments of $1,200 to many middle-class individuals or $2,400 for married couples, plus $500 per child. The payments start to phase out for people making more than $75,000 or couples making $150,000.

Democrats were able to secure a change from a previous version that allows low-income taxpayers to get the full $1,200 payment. The initial plan would have given smaller checks, or in some cases, no money at all, to very-low income people.

Unemployment insurance payments would be boosted under the draft and recipients would be eligible to receive those funds for longer. Democrats have insisted throughout the negotiations that any bill include much more generous payments to those who find themselves without a job during the pandemic.

Loans become grants if workers kept on payroll

The pot of money for loans that could go to corporations and state and local government grew to some $500 billion available for as many as five years. Of that, $50 billion would be available for loans to passenger airlines and $8 billion for cargo carriers. Another $17 billion would be available to “businesses critical to maintaining national security.” The draft text doesn’t offer more detail on the types of companies that would be eligible.

Separately, the draft includes about $350 billion in loans for small businesses that would convert to grants if the companies retain their employees.

The aid includes restrictions. Corporations getting money would be prohibited from share buybacks and would be required to maintain their employment levels as of March 13, 2020.

The companies also would have to freeze compensation for employees earning more than $425,000 for two years, and they’d be prohibited from offering departing executives so-called golden parachutes, or payments worth more than twice their annual salary.

The government would be able to take equity stakes in businesses, without voting rights.

Fed could amplify loan support

The bill would authorize the Treasury to use $425 billion of the $500 billion “to make loans, loan guarantees, and other investments in support of programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system that supports lending to eligible businesses, states or municipalities.”

Senate Banking Committee Chairman Mike Crapo told Bloomberg News that the legislation would expand the Fed’s authority to include state and local governments as entities it can lend to, and buy debt from, to assist them.

Millions for private-plane airports

The nation’s airports would receive $10 billion. Of that, $3.7 billion would be split between commercial airports based on how many passengers boarded planes there in 2018, with another $3.7 billion allocated to airports based on their debt. Airports that serve private, small, and charter planes would receive $100 million.

Restaurants can deduct cost of renovations

This version retains a sizable tax perk for restaurants and retailers.  Businesses would temporarily be able to have more flexibility to use losses to offset their tax bills. They could also write off more of the interest they pay on debt during the crisis. Restaurants and retailers would be able to deduct the entire cost of renovating their stores in a single year. A mistake in the 2017 tax law meant they had to spread those costs over several years.

Taxpayers who take the standard deduction could write off up to $300 charitable donations in 2020. Typically that benefit is only available to those who itemize. The bill would also temporarily lift some limits on the charitable tax break for those who itemize.

Businesses can defer paying employer-side payroll taxes during 2020. They have to pay half of those taxes by the end of 2021 and the second half in 2022.

Railroads get grants if they recognize unions

Passenger railroads and public transit agencies would receive a direct infusion of federal aid under the draft bill. The aid wasn’t part of the original bill introduced by McConnell.

Amtrak would receive about $1 billion, with roughly half earmarked for the Northeast Corridor, according to the draft bill released Sunday. To receive a grant, the passenger rail system would be required to recognize unions, maintain worker benefits, and provide unemployment assistance. States would also not have to pay their full share of operating and capital costs for rail service.

Transit systems would receive $20 billion in grants, with $4 billion of that marked for rural areas only, according to the draft bill.

Relief for oil industry, not renewable energy

The draft legislation includes $3 billion for the acquisition of oil for the nation’s Strategic Petroleum Reserve. The funding for the emergency stockpiles had been requested by the Trump administration for the purchase of up to 77 million barrels of crude oil to support the domestic industry and boost reserves at cheap prices.

The bill would also apparently permit the government to buy commercial crude inventories without stashing the oil in the strategic petroleum reserve sites along the Gulf Coast.

Companies that refine oil into gasoline could also benefit from a large pool of funds in the bill reserved for loans and loan guarantees for businesses that are deemed “critical to maintaining national security.”

Attempts by the renewable energy and Democrats to add billions in tax credits for wind, solar, batteries, and electric vehicles were left out of the bill.

Student loan payments suspended

The new draft language released Sunday would suspend payments on federal student loans without interest for six months. A previous version would suspend payments for three months and give the secretary discretion to extend non-payment for another three months. The bill also would suspend payments for both federal Direct Loans and federally guaranteed student loans. Previous language included only Direct Loans.

The legislation also includes a $20 billion education stabilization fund for K-12 schools and public colleges and universities.

Next steps for the Virus Rescue Plan Negotiations

Negotiations to break the impasse over the stimulus legislation continued into last night after Senate Democrats voted to reject Majority Leader Mitch McConnell’s (R-Ky.) latest version of the plan, which had been the product of frenzied bipartisan negotiations a day earlier.

Senate Minority Leader Chuck Schumer (D-N.Y.) met several times last night, including at 11:45 p.m., with Treasury Secretary Steven Mnuchin, who has been conducting what amounted to shuttle diplomacy between the two sides.

While many details of the plan had been hashed out, some fundamental differences hadn’t been bridged. The recriminations began immediately after McConnell’s bid for a procedural vote failed.

An incensed McConnell cited plummeting stock futures to express the urgency to act today, and he ripped Schumer and Speaker Nancy Pelosi (D-Calif.). “We’re fiddling here. We’re fiddling with the emotions of the American people, fiddling with the markets,” McConnell said on the Senate floor. “This obstruction achieves nothing.”

Schumer complained that McConnell’s bill was partisan. He said it amounts to “a large corporate bailout” with insufficient oversight, and shortchanges the health-care response to the pandemic. He said there should be “much more money” for hospitals for equipment that is rapidly becoming in short supply.

Negotiations will continue today, with the Senate planning another procedural vote at noon. Read more from Steven T. Dennis


Pelosi pushes forward with her own emergency coronavirus package

Speaker Nancy Pelosi is hitting pause on bipartisan negotiations on a $1.6 trillion-plus emergency package in the Senate, saying the House will forge ahead with its own bill to address coronavirus after congressional leaders failed to reach a deal earlier Sunday.  Pelosi and McConnell met with Senate Minority Leader Chuck Schumer (D-N.Y.), House Minority Leader Kevin McCarthy (R-Calif.) and Treasury Secretary Steven Mnuchin in hopes of hammering out a final agreement before the afternoon Senate vote.  Pelosi’s outlook for a deal wasn’t any better as she left the hour-long meeting, declaring plans for the House to introduce its own bill. Pelosi said the two sides were “still talking” but made clear that the Monday timeframe to pass something is McConnell’s self-imposed deadline, not hers.

“It’s on the Senate side because that’s their deadline for a vote,” Pelosi said about the Monday deadline. “We’ll be introducing our own bill and hopefully it will be compatible.”  Despite saying the House would move ahead on its own, Pelosi also continued to engage in bipartisan negotiations on the Senate bill Sunday afternoon, according to a source.  Senior House Democrats have been working on dual tracks for days — simultaneously drafting language for their own bill while also conferring with Senate Democrats on what they’d like to see in the McConnell-Schumer proposal.

It’s unclear what exactly will be in the final House Democratic package. The caucus held several hours of conference calls this week for members to promote their ideas, including a significant expansion of unemployment insurance, direct cash payments to Americans under a certain income threshold, funding for hospitals and medical supplies, and grants to keep small businesses from folding. Hundreds of proposals were submitted from all corners of the caucus.

“I’m anxious to see what Speaker Pelosi would put on the table. She needs to be part of this conversation,” said Senate Minority Whip Dick Durbin (D-Ill.) when asked about Pelosi’s plans. “We do have a bicameral Congress and the House of Representatives will ultimately consider whatever is sent to them. And I hope we can have a bipartisan agreement when that’s sent.”

Many of those same provisions are also being negotiated in the Senate bill but some House Democrats wanted to go even further, using the urgency of the herculean package to achieve broader, long term policy goals like a massive infrastructure deal.

But even some House Democrats are privately wondering what is Pelosi’s endgame, especially given that lawmakers, including many in her own caucus, don’t even want to return to Washington at all, much less for a standoff with the Senate. Already, two House members have tested positive for coronavirus and Sen. Rand Paul (R-Ky.) on Sunday said he’s contracted the virus.

McConnell, meanwhile, has sought to drum up the pressure on House Democrats to support the Senate’s package, comparing it to last week’s multi-billion dollar “Phase 2” emergency package that Congress approved, which was largely crafted by Pelosi and Mnuchin.

“It would be best for the country if the House would take it up and pass it just like we did earlier this week when the House passed a bill that I had only marginal participation in because the country was desperate for results. So I hope that’s the way this ends,” McConnell told reporters.  Read more by Heather Caygle, Sarah Ferris and Marianne Levine at Politico.


Hill Covid-19 cases

Republican Senator Rand Paul, who was among a handful of Republican lawmakers to opposed a $100 billion stimulus package to offset the impact of Covid-19 on the U.S. economy and was the lone vote against an $8 billion emergency spending package aimed at boosting funds for testing and lowering the cost of certain related medical treatments – tested positive for Covid-19.  He’s the first U.S. senator, and third member of Congress, known to have become infected.  Sen. Kyrsten Sinema (D-Ariz.) responded angrily to reports that Paul had been at the congressional gym on Sunday morning, and swam in the pool there—after taking the test, but before receiving the results. Read more from Ros Krasny.

On March 18, Representative Mario Diaz-Balart, a Florida Republican, and Representative Ben McAdams, Democrat of Utah, both revealed they had been diagnosed as positive.   They join three Hill staffers, that we know of who have tested positive for the coronavirus.  Additionally we learned that an official working for Vice President Pence has tested positive for the coronavirus,


Today on the Hill

White House

  • 10:00 am In- House Pool Call Time (Press)
  • 12:30 pm Trump has lunch with Vice President
  • 5:30 pm Members of the Coronavirus Task Force hold a press briefing


  • Will meet next in session at 12 pm today.


  • The House meets in pro forma session today


Also in the news

Pence Vows Testing Backlog Resolved by Midweek: Vice President Mike Pence said the backlog in coronavirus testing in the U.S. should be resolved by midweek. Pence, speaking at a White House press conference yesterday, said health-care workers should prioritize in-patient testing. “We want people checked into a hospital, that are treated for what they thought was the coronavirus, to receive the test more quickly,” Pence said. Pence added that about 254,000 people in the U.S. have now been tested for coronavirus and received their results. More than 32,000 have tested positive, Josh Wingrove reports.

National Guard Ramps Up Virus Efforts: The National Guard ramped up its role in containing the coronavirus in the U.S., with 7,300 troops deployed across the country to combat the outbreak as President Donald Trump ordered new force activations to aid California, New York and Washington state. The president’s order yesterday will waive the typical cost-sharing arrangement where the federal government pays 75% of the costs and states pay the remaining 25%. The move affects the three states most impacted by the virus so far but could q uickly be extended to other states, said Gen. Joseph Lengyel, the chief of the National Guard Bureau. Read more from Travis Tritten.

Small Tweaks to Ventilators Allowed to Boost Supply, FDA Says: Ventilator manufacturers are free to modify devices that have already been approved by the FDA in order to boost supply of the machines to combat the coronavirus outbreak. The Food and Drug Administration issued new guidance yesterday that allows limited modifications of previously approved models of ventilators, anesthesia gas machines, and other respiratory devices without worrying about federal enforcement. The agency still recommends using conventional respirators whenever possible to treat patients suffering from Covid-19. Read more from Andrew Childers.

GM, Ford Rush to Try to Make Ventilators: Trump caused consternation in Washington, Detroit and beyond when he tweeted yesterday that he had given automakers the “go ahead” to start producing ventilators and other equipment desperately needed in the coronavirus pandemic. No one seemed to know what this pronouncement meant.

What is clear, though, is that companies were already racing to try to determine how — or if — they could contribute. And that they recognize there will be no easy switch-over to manufacture something like a ventilator, which pumps oxygen into a Covid-19 patient’s lungs and removes carbon dioxide through a hose. Read more from Hailey Waller and Keith Naughton.

DHS Says No Plans Now for Broad Domestic Travel Ban: The Trump administration has no immediate plan to restrict domestic travel, but may consider “targeted” measures aimed at states where the coronavirus outbreak is the worst, acting Homeland Security Secretary Chad Wolf said, Josh Wingrove reports.

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