Senate COVID-19 Funding Draft Proposal Delayed
Due to internal disagreements within their own membership and with the White House, Senate Republicans have pushed back their planned draft proposal release of another COVID-19 emergency funding bill to at least early next week. Citing a lack of consensus on cost and substance, Republicans Senators insisted that this brief pause will not put the goal of getting a bill done by next Friday in jeopardy. Specifically, Senate Leader Mitch McConnell (R-KY) said that committee chairmen and other Republicans would begin introducing components of their COVID-19 stimulus plan starting on Monday. The supplemental unemployment insurance approved in the CARES Act back in March is set to expire at the end of July. Despite not reaching an agreement this week, Republicans have coalesced around several key provisions which are expected to be included in the next COVID-19 emergency relief bill. This includes:
- Stimulus Payments: Some sort of additional financial assistance will be included in the Republican bill, but the amount of the payment and eligibility criteria are still being debated. There will also be no payroll tax reduction favored by President Trump. Secretary of Treasury Steve Mnuchin said he would like to see any proposed additional stimulus payments structured in a way that would be similar to the way payments were structured in the CARES Act
- Unemployment Insurance: Negotiators have indicated there will be some type of extension of the enhanced benefit, but likely not $600 a week. Most likely, there will be a transition period during which there will be a flat amount of extra unemployment insurance per week. A new policy is also expected to be created that better aligns with an individual’s lost income (possibly by multiplying a person’s state benefit), but will cap out at 100 percent of income.
- Paycheck Protection Program (PPP): Discussions have centered on another streamlined loan forgiveness process for small loans under $150,000 and an intermediate forgiveness process for loans under $1 million. Additional funding for a second round of PPP loans is also expected for businesses employing less than 300 workers or that fall within the Small Business Administration size threshold for their industry and that can demonstrate 50 percent lost revenue compared with a reference period. These loans would be calculated similarly to those included in the last round of PPP, but would have a smaller cap.
- Loan forgiveness may be expanded to include certain supplier costs, operating expenses, and damage caused by rioting. There is also a proposal for a new working capital loan that would be offered to businesses with under 300 workers and would be an alternative to a second round of PPP loans.
- Liability Reform: Businesses, schools and other organizations would receive protection from lawsuits arising from exposure to COVID-19 due to reopening. It is thought that lawsuits would be moved to federal courts, and plaintiffs would have to show “gross negligence” by employers in order to win, rather than just showing “simple negligence”. Additionally, a cap would be placed on damage awards.
- Rental Assistance: There is no proposed rental assistance provisions currently being discussed. Republicans have stated that if they do negotiate on rental assistance, it would have to be a much narrower and targeted form of rental assistance, with only $5 billion to be provided in funding. Democrats are requesting $100 billion for rental assistance (HEROES Act).
In the absence of an agreement on scope and size of the next round of COVID-19 relief, White House Chief of Staff Mark Meadows has started outlining a possible fallback position: separately passing a supplemental unemployment insurance provision with funding for schools while allowing negotiators more time to continue to seek consensus on a bigger COVID deal. Meanwhile, the Senate still plans on adjourning on August 7 for their month long recess, leaving them roughly two weeks to get an agreement.
Several Senators Request HUD, USDA and FHFA Enforce Eviction Ban
On July 22, Senators Elizabeth Warren (D-MA) Jon Tester (D-MT) and Doug Jones (D-AL) sent a letter to U.S. Department of Housing and Urban Development Secretary Ben Carson, U.S. Department of Agriculture Secretary Sonny Perdue, and Federal Housing Finance Agency Director Mark Calabria urging the agencies to enforce bans on housing evictions for the duration of the COVID-19 emergency. The letter states that an estimated 32 percent of renters were unable to make rent payments in July, and that despite a ban on evictions for renters in federally-subsidized housing, some tenants have still been unlawfully evicted during the pandemic. The Senators cited a June 9 oversight hearing of housing regulators by the Senate Committee on Banking, Housing and Urban Affairs. During that hearing, members heard testimony that communities in several states had allowed landlords to move forward with eviction proceedings, despite the mandated temporary protections for federally assisted renters the CARES Act had established. In their letter, the Senators request that the agencies use every tool at their disposal to help renters understand their protections in the CARES Act, including by creating a toll-free hotline for renters to ask questions about their protections. To view the full letter, click here.
House Financial Services Holds Hearing on Economic Recovery from COVID-19
On July 23, the House Committee on Financial Services held a hearing entitled “The Heroes Act: Providing for a Strong Economic Recovery from Covid-19”. The hearing focused on the HEROES Act and the role it could play in providing relief from COVID-19. The Heroes Act (H.R.6800) was passed by the House of Representatives on May 15 in response to the COVID-19 pandemic. If enacted into law, it would provide $3 trillion in COVID-19 relief including critical investments in affordable housing and community development. During the hearing, Chairwoman of the Finance Committee, Maxine Waters (D-CA) voiced her concerns that no action has been taken in the Senate since the House passed the HEROES Act in May and that the COVID-19 pandemic has only surged since that point. The Chairwoman mentioned how 36% of renters were unable to make full July rent payments and 4.2 million homeowners were in forbearance plans. The Chairwoman also described the steps the Committee is taking to ensure all lending institutions can access federal lending programs, such as the Payment Protection Program. Hearing witnesses included Mr. Shaun Donovan, former HUD Secretary, and former Director of the Office of Management and Budget. To view the full hearing, click here.