March 20, 2020
The following breaking news update on the Covid-19 pandemic is courtesy of Winning Strategies Washington.
Summary of “Phase Three” Legislation – the Coronavirus Aid, Relief, and Economic Security (CARES) Act
Last night, Senate Republicans introduced the latest installment of coronavirus relief legislation — the Coronavirus Aid, Relief, and Economic Security (CARES) Act — which is Phase Three in Capitol Hill’s effort to ease the blow from the economic downturn occurring related to the COVID-19 pandemic. Senate Republicans, in an effort to push for agreement on the massive $1 trillion package as soon as the end of Friday, included Senate Democrats in their deliberations today.
Senate Republicans have framed the package as providing relief directly to American citizens, support for business sectors and industry to ensure economic resilience in the face of the shocks rippling through the economy, and additional support for the health care field on the front lines of responding to the COVID-19 pandemic. For example, the legislation delays the filing date for taxes from April 15 to July 15 — shortly after the IRS had delayed payments associated with filings until July 15. Similarly, the Department of Education formally announced all federal student loan borrowers 60 days of 0% interest rates, and that federal loan servicers should grant administrative forbearance to any borrower who requests it.
Please note that this is a starting point. Senate Democrats and House Democrats have not yet had input on the Senate Republican package, so the measure detailed below is subject to negotiation and modification. But it is an important starting point that will help frame this effort or future packages as well.
Key provisions in the Phase Three CARES legislation package are as follows:
- Provides recovery checks to most taxpayers so that they have ready cash support. Individuals would receive up to $1,200, married couples filing jointly up to $2,400, with an extra $500 for each child. Eligibility will be phased out starting at $75,000 in 2018 income for individuals and $150,000 in 2018 income for joint filers. Individuals whose 2018 income exceeded $99,000 and joint filers whose income exceeded $198,000 will not receive payouts.
- Extends the traditional April 15th tax filing deadline to July 15th and allows individuals required to make estimated tax payments to postpone them until October 15th.
- Allows an additional $300 deduction for charitable contributions “above the line” whether or not taxpayers itemize deductions.
Health care response
- Expands testing and ensures coronavirus tests are free for patients, specifically that private insurance plans supply testing without cost-sharing.
- Prioritizes FDA review of new drug applications and inspections to prevent or mitigate drug shortages and supply chain disruptions.
- Requires drug manufacturers and medical device manufacturers to provide more information on when there is an interruption in supply, including an interruption in the supply for Active Pharmaceutical Ingredients (API). Further, it requires manufacturers
- Provides $1.32 billion in supplemental funding for community health centers on the frontline of COVID 19 response.
- Increases Medicare payments to hospitals treating a patient admitted with coronavirus.
- Reauthorizes Healthy Start grants that help improve access to services for women and their families.
- Allows the Biomedical Advanced Research and Development Authority (BARDA) to more easily partner with private sector on research and development by removing the cap on other transaction authority (OTA).
Small business relief
- Provides cash-flow assistance through federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers to remain employed and affected small businesses and our economy to quickly snap-back after the crisis.
- Expands the allowable uses for certain small business loans to permit payroll support, including paid sick leave, supply chain disruptions, employee salaries, mortgage payments, and other debt obligations to provide immediate access to capital for small businesses who have been impacted by the coronavirus emergency.
- Temporarily increases the interest expense businesses can deduct from 30% to 50%.
- Related to the recent expansion of sick leave, creates a limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee.
- Related to the recent expansion of family and medical leave, creates a limitation stating an employer shall not be required to pay more than $200 per day and $10,000 in the aggregate for each employee.
Education and students
- Allows the Secretary of Education to defer student loan payments for 3 months (with an additional 3 months possible depending on the duration of the public health emergency and allows students who were forced to drop out of school due to coronavirus to keep their Pell grants.
- Grants colleges and universities flexibility to continue work-study payments to students who cannot work due to coronavirus closures and waives the institutional matching requirement for campus-based aid programs.
- For students who dropped out of school as a result of COVID -19, the student’s grades do not affect a student’s federal academic requirements to continue to receive Pell Grants or student loans.
- Provides the Secretary of Education with broad waiver authority to provide waivers from the Elementary and Secondary Education Act, the Higher Education Act, and the Carl D. Perkins Career and Technical Education Act, except civil rights laws, that are necessary and appropriate due to the COVID-19 declaration of disaster.
- Provides local workforce boards with additional flexibility to use funds received under the Workforce Innovation and Opportunity Act for administrative costs, including for online resources.
Aviation sector relief and stability
- $50 billion in secured loans for the airline industry with limits on increases in executive compensation until they are repaid
March 19, 2020
Phase Three Coronavirus Relief Package Could Move as Early as This Weekend
Senate Majority Leader Mitch McConnell announced this evening that Senate Republicans have agreed internally on a multibillion-dollar Phase Three coronavirus relief package, and will now begin expeditious negotiations with Senate Minority Leader Chuck Schumer in an effort to move the package forward as soon as this weekend.
Details are slowly becoming available, and your WSW team will share them as they are known. The package is expected to include cash payments to American families, small business loans and grants, and support for the aviation sector. Relief is also in play for other key sectors of the economy. Current estimates are individual payments of $1,200, $2,400 for families, and another $500 per child. Cutoffs for payments could be set at $99,000 in income for individuals and $198,000 for families, but those levels remain in flux.
For additional sectors of the economy that may or may not be addressed in the Phase Three legislation, talks are already underway across Capitol Hill about future phases of relief that will be needed and soon.
Coronavirus Task Force Update: Vice President Pence Announces Private Sector Mask Production
At today’s briefing, Vice President Pence announced that companies are ramping up production of protective masks for health-care workers on the front lines. Pence further stated the federal government will need the private sector to supplement its Strategic National Stockpile, a reserve of emergency medical supplies and countermeasures for first responders.
President Trump and FDA Commissioner Hahn announced that the FDA had approved the use in coronavirus patients of the prescription drugs chloroquine and hydroxychloroquine, which have been used to treat malaria – as well as allowing patients to gain access to an experimental drug, remdesivir, through “compassionate use” policies. Neither drug has been through a clinical trial to determine effectiveness against coronavirus.
President Trump participated in a videoconference with the nation’s Governors from FEMA headquarters today. National Governors Association Chairman and Maryland Governor Larry Hogan requested that the federal government dedicate 50 percent of the emergency supplemental funds to the states.