Recent policy action on the coronavirus front:
(1) LENDING: On Monday June 15, 2020, the Federal Reserve opened the Main Street lending program initiated in March in the CARES Act.
(2) TESTING: Senator Ted Cruz introduced a bill to provide tax incentives to businesses that test workers for Covid-19.
(3) OVERSIGHT: On Monday June 15, 2020, it was revealed that the inspectors general designated by the CARES Act to monitor spending — the Pandemic Response Accountable Committee — wrote to key Congressional committee chairs last week expressing concern that the administration’s recent legal rulings were blocking their ability to provide oversight of the spending programs.
(4) LIABILITY: States explore limiting liability for COVID-19 related claims, including Iowa legislation signed by the governor on June 18 that limits liability retroactive to January 1, 2020 and North Carolina’s limited liability bill that passed the senate.
(5) PRIVACY: The most recent round of proposed federal legislation aimed at protecting privacy in COVID-19 contact tracing apps, follows on the heels of earlier proposals as well as state level action on the privacy front (see e.g. California bill; Minnesota bill). Around the globe, countries have introduced contact tracing apps — including Japan’s introduction today (June 19, 2020) of its national tracing app.
The Paycheck Protection Flexibility Act, H.R. 7010, which extends the period to use Paycheck Protection Program funds to 24 weeks, passed with unanimous consent in the Senate, and passed the House last week 471-1. The legislation also reduces the level of Paycheck Protection Program funds that must be used for payroll to 60% from 75%.
On Thursday May 28, 2020, the House passed H.R. 7010, the Paycheck Protection Program Flexiblity Act of 2020 by a vote of 417-1. The legislation would relax various requirements for small businesses accessing the loans and loan forgiveness originally provided in the Paycheck Protection Program (PPP) enacted in H.R. 748 on March 27, 2020. In particular, H.R. 7010 would extend the period of time businesses have to spend their PPP loans and would reduce the percentage that must be spent on payroll (from 75% to 60%) to qualify for loan forgiveness. Additionally, for those loan funds that must be repaid, the bill delays and extends the repayment period.
Late on Friday May 15, 2020, the most recent round of COVID-19 funding legislation, H.R. 6800, The Health and Economic Recovery Omnibus Emergency Solutions Act (“HEROES Act), passed the House by a mostly partisan vote of 208-199. The bill, which was introduced in the House earlier this week on May 12, 2020, includes approximately $3 trillion in relief for state and local governments, individuals, and the healthcare system.
The next major round of COVID-19 legislation, H.R. 6800, The Health and Economic Recovery Omnibus Emergency Solutions Act (“HEROES Act), was introduced in the house today, May 12, 2020. The package includes approximately $3 trillion in relief for state and local governments, individuals, and the healthcare system.
According to the Democratic staff of the House Committee on Appropriations summary , the bill includes, just in its funding for governments and financial services:
State Fiscal Relief – $500 billion in funding to assist state governments with the fiscal impacts from the public health emergency caused by the coronavirus.
Local Fiscal Relief – $375 billion in funding to assist local governments with the fiscal impacts from the public health emergency caused by the coronavirus.
Tribal Fiscal Relief – $20 billion in funding to assist Tribal governments with the fiscal impacts from the public health emergency caused by the coronavirus.
Fiscal Relief for Territories – $20 billion in funding to assist governments of the Territories with the fiscal impacts from the public health emergency caused by the coronavirus.
CARES Act Coronavirus Relief Fund Repayment to DC – Provides an additional $755 million for the District of Columbia to assist with the fiscal impacts from the public health emergency caused by the coronavirus
Treasury Inspector Generals – $35 million for the Treasury Inspector General for oversight of Coronavirus Fiscal Relief Fund payments to state and local governments, and $2.5 million for the Treasury Inspector General for Tax Administration for oversight of IRS payments.
Community Development Financial Institutions (CDFI) – $1 billion for economic support and recovery in distressed communities by providing financial and technical assistance to CDFIs.
Tax Credit Implementation – $599 million for implementation of additional payments to individuals.
Assistance to Homeowners–$75 billion to states, territories, and tribes to address the ongoing needs of homeowners struggling to afford their housing due directly or indirectly to the impacts of the pandemic by providing direct assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.
Elections – $3.6 billion for grants to States for contingency planning, preparation, and resilience of elections for Federal office.
Broadband – $1.5 billion to close the homework gap by providing funding for Wi-Fi hotspots and connected devices for students and library patrons, and $4 billion for emergency home connectivity needs.
Assisting Small Businesses – $10 billion in grants to small businesses that have suffered financial losses as a result of the coronavirus outbreak. Office of Personnel Management Inspector General Office (OPM IG) – $1 million for the OPM IG to combat healthcare fraud associated with COVID-19.
General Services Administration Technology Modernization Fund – $1 billion in funding for technology-related modernization activities to prevent, prepare for, and respond to coronavirus.
Postal Service – $25 billion for revenue forgone due to the coronavirus pandemic, plus language providing additional protections to Postal workers. An additional $15 million is provided for the Postal Service Inspector General for oversight of this funding.
The CARES Act legislation passed in late March 2020 included enhanced unemployment payments of $600 per week (Section 2104 of the Act). The Department of Labor, as part of Q&A guidance issued over the weekend on May 9, 2020, confirmed that part-time workers can be eligible to receive the extra $600 payments (Question A.4). The guidance also addressed other questions concerning payments, overpayments, recovery, and state reporting of the $600 payments (Federal Pandemic Unemployment Compensation).
This afternoon, H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, became law. The new legislation adds $310 billion of new funding to the Payroll Protection Protection Program (the small business loan/grant program) introduced in the CARES Act, which ran out of funds in under two weeks. In addition, the new legislation allocates $75 billion for health care related costs, and $25 billion for testing.
The Executive Order signed by California’s governor on April 16th states that “workers who are sick are more likely to go to work if they do not have paid leave, thereby increasing health and safety risks for their fellow workers and other members of the public with whom they, or the products of their work.” Whereas the federal Families First Coronavirus Response Act (“FFCRA”) extends emergency paid sick leave requirements only to employers with fewer than 500 employees, the executive order applies to entities with 500 or more employees in the United States. The order provides two weeks of supplemental paid sick leave to certain food sector workers — including farmworkers, agricultural workers and those working in grocery stores, fast food chains and delivery drivers — if they are subject to a quarantine order, advised by a health care provider to self-quarantine, or prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19.
On Wednesday April 15, 2020, U.S. Treasury Secretary Mnuchin and SBA Administrator Carranza announced that the Payroll Protection Program, introduced by the CARES Act has exhausted its $349 billion appropriation in fewer than 14 days, noting that “[b]y law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations . . . .[and] urg[ing] Congress to appropriate additional funds for the Paycheck Protection Program . . . at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.”
The April 7, 2020 emergency order requires companies with either 500 or more employees within the city of Los Angeles or 2,000 or more employees nationally to provide up to 80 hours of additional paid sick time for reasons related to COVID-19. The order, which covers individuals who perform any work in Los Angeles, aims to reach workers not covered by the federal paid sick leave legislation. A number of other cities — including San Francisco and Seattle — and states — including California, Colorado, Michigan, New Jersey, and New York — have also expanded leave policies in recent weeks.
An updated version of the Working Paper, Regulating in Pandemic: Evaluating Economic and Financial Policy Responses to the Coronavirus Crisis by Hiba Hafiz, Shu-Yi Oei, Diane M. Ring, and Natalya Shnitser has been posted. The Working Paper is revised and updated to incorporate the CARES Act (H.R. 748) as well as recent action by the Federal Reserve, the Department of Labor, and other agencies.
President Trump issued a signing statement on Friday that suggests he see limits on the extent of oversight to be provided by the new Special Inspector General for Pandemic Response (SIGPR). Created in the legislation, the SIGPR is intended to “conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments made by the Secretary of the Treasury under any program” under the new Act. The SIGPR is directed under the legislation to provide quarterly reports to Congress — and to inform Congress if agencies unreasonably refuse to provide requested information. In critiquing the role of the SIGPR in the signed bill, the President stated, “I do not understand, and my Administration will not treat, this provision as permitting the SIGPR to issue reports to the Congress without the presidential supervision required by the Take Care Clause, Article II, section 3.”
The House passed H.R. 748 by voice vote this afternoon with a quorum present and over the objections of one representative. The legislation now heads to the President. Treasury Secretary Mnuchin stated Thursday (referencing portions of the legislation that call for payments to individuals) that Americans should expect to see money in their hands (typically via direct deposit) in three weeks.