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7.24.20 Washington Update

Next COVID-19 Package

Senate Majority Leader Mitch McConnell (R-KY) and his Republican colleagues continue to discuss appropriate response policies and their strategy before unveiling legislation, which will serve as a starting point for negotiations.  Leader McConnell is trying to keep the cost of this next COVID relief package as close to $1 trillion as possible.  Discussions amongst Republicans are still occurring so the total cost of the initial Senate Republican proposal is still evolving.  Senate Minority Leader Chuck Schumer (D-NY) continues to push for a much larger $4 trillion bill.  We expect the final price tag to fall between the bookends.

Following discussions with the administration, there is growing consensus to propose extending enhanced unemployment benefits, additional direct payments to the public, funding for schools, liability protections, business reimbursement for personal protective equipment, enhanced employee retention tax credit, a targeted second round of the Paycheck Protection Program, funding for COVID-19 testing as well for health care providers, and several other economic stimulus measures.

Republican senators who will be integrally involved include Senators Shelby (AL), Alexander (TN), Blunt (MO), Cornyn (TX), Rubio (FL), Grassley (IA), Wicker (MS), Thune (SD), and Crapo (ID).  Senators declaring opposition to advancing COVID legislation will have substantially less, if any, influence in changing the bill.

The fulcrum of the debate will likely turn on liability protection, enhanced unemployment benefits, and state and local funding assistance.  Democrats, while open to the idea of liability protection, could still fight to limit its scope, while Republicans are expected to oppose unemployment benefits that discourage recipients from returning to work.  It’s worth noting that the US Department of Justice provided technical drafting assistance to, and legal/Constitutional guidance on the liability provisions.  Enhanced unemployment benefits continue to be a redline issue for House Speaker Nancy Pelosi and Leader Schumer while many Republicans view the benefits as a deterrence to having workers return to work.

Attorney General Bill Barr and his team have been, and will continue to be, involved in liability negotiations.  McConnell’s ability to defend liability protection stands in direct proportion to rank-and-file Republican support for the overall package; that is, the more conference support McConnell gets, the greater his leverage to keep a robust liability section in the final bill.  Of course, don’t forget the obverse: His trouble delivering “yes” votes will weaken his ability to protect the liability shield.  We anticipate Schumer and Pelosi will oppose, and attempt to weaken, liability language, while fighting for higher funding levels, principally for states and localities.

Leader McConnell has also been working closely and coordinating with House Minority Leader Kevin McCarthy (R-CA).  House Republicans remain laser-focused on COVID issues relating to China (note: House leadership convened various China task forces last month), and proposals in this vein may be broached in future talks.

 

2020: Key Dates and Deadlines

The following is a comprehensive list of important dates and deadlines that will drive congressional and presidential actions for the remainder of the year.

 

Date Action(s)
July 25, 2020 Expiration: CARES Act: suspension of eviction for federally backed properties
July 31, 2020 Expiration: CARES Act: $600-per-week federal pandemic unemployment benefits
Aug 8, 2020 Application deadline: CARES Act: Paycheck Protection Program borrowers
Week of Aug 17, 2020 Democratic National Convention
Week of Aug 24, 2020 Republican National Convention
Aug 31, 2020 Expiration: Fannie Mae and Freddie Mac’s single-family moratorium on foreclosures and evictions
Sept 29, 2020 First presidential debate
Sept 30, 2020 Expiration: federal government fiscal year funding

Expiration: National Flood Insurance Program

Expiration: Fixing America’s Surface Transportation (FAST) Act

Expiration: CARES Act: student loan repayment and interest accrual suspension

Oct 7, 2020 Vice presidential debate
Oct 15, 2020 Second presidential debate
Oct 22, 2020 Third presidential debate
Nov 3, 2020 Election day
Nov 30, 2020 Expiration: various health care extenders
Dec 31, 2020 Expiration: CARES Act: Treasury/Fed business, state and local government loan authority

Expiration: CARES Act: various temporary tax breaks

Expiration: CARES Act: emergency sick and family leave programs

Expiration: CARES Act: pandemic unemployment assistance

Expiration: CARES Act: Medicare sequestration suspension

Expiration: CARES Act: changes to banking and accounting rules

Expiration: partial tax extenders

Expiration: General System of Preferences (GSP)

 

Appropriations

Next week, the House will take up its second minibus appropriations package, which includes the Defense, Commerce, Justice, Science; Energy and Water; Financial Services and General Government; Homeland Security; Labor, Health and Human Services Education; and Transportation, Housing, and Urban Development spending bills.  The House Rules Committee amendment filing deadline is 4:30 pm today.  After next week, the House will have passed all spending measures except for that covering Legislative Branch appropriations.

At this time, we still do not anticipate Senate appropriators reaching any agreement to consider any standalone appropriations legislation.  Therefore, come September, we expect a short-term continuing resolution for all 12 appropriations bills, likely extending past Election Day, possibly into early December.