March 17, 2020
COVID-19: Daily Digest
As we all navigate the swirling uncertainty regarding the Novel Coronavirus (COVID-19) pandemic, we will be producing a newsletter dedicated to the issues spawning from this global crisis. It is of utmost importance that we stay connected and our clients to have the most current information to help mitigate disruption.
As always, we stand ready to help however we can; please reach out if you have questions.
April 2, 2020
Jobless Claims Report: U.S. Weekly Jobless Claims Double to 6.6 million
During the Great Recession that started more than a decade ago, the United States lost around 8.7 million jobs over a sustained number of months. Now, just two weeks into this new economic crisis, almost 10 million Americans have filed jobless claims.
Payday, For Some
In a memo obtained by NBC News, The Trump Administration estimates that Americans will start receiving direct deposit payments from the $2 trillion coronavirus bill starting on April 13. However, this memo also suggests that paper checks, for those who don’t use a direct deposit for their tax filings, may take up to 20 weeks to arrive.
Pelosi Forms Committee to Oversee Coronavirus Relief Package
Today, House Speaker Nancy Pelosi (D-CA) announced the formation of a bipartisan House Select Committee to oversee the $2.4 trillion coronavirus relief package. This committee will be chaired by House Majority Whip Jim Clyburn (D-SC.)
In a Dear Colleague letter, Speaker Pelosi said that the committee “will root out waste, fraud, and abuse and protect against price gouging and profiteering.” The committee will have subpoena powers over the Trump Administration, but Speaker Pelosi has said in a press call today that “we would hope that there would be cooperation because this is not a kind of an investigation of the administration it’s about the whole coronavirus response.”
House Minority Leader Kevin McCarthy opposes the special committee as he believes that the initial oversight mechanisms implemented in the CARES Act are sufficient.
DNC Postpones July Presidential Convention
The Democratic Presidential Convention has been pushed back until August 17 due to concerns surrounding travel and Coronavirus. Presumptive nominee Joe Biden said this week that “We just have to be prepared for the alternative and the alternative, we don’t know what it’s going to be unless we have a better sense of whether this curve is going to move down or up.”
However, a strange development factored into Democrat’s decision to move the convention: The NBA’s schedule, specifically, the schedule of the #1 playoff-seeded Milwaukee Bucks.
Because the DNC is hosting their convention in the Fiserv Forum in downtown Milwaukee, they are contractually entitled to retrofit the stadium for use from July 13 to July 16. However, a clause in the contract specifically stipulates that convention planners can’t use the venue unless the Bucks have been eliminated from the playoffs. And, there’s the problem; the NBA is postponed indefinitely and has yet to make a determination if they will return this summer.
This left the DNC with little choice. Even if the COVID-19 outbreak is largely contained by July – a big if – the DNC cannot guarantee Antetokounmpo and the Bucks will be eliminated from the playoffs, so were forced to postpone.
FDA Makes Changes to Blood Donation Guidance
The Food and Drug Administration (FDA) provided updated guidance to address the need for blood during the coronavirus pandemic, and they have made several changes that will be implemented immediately. Included, is shortening the recommended deferral period from 12 months to three months for male donors who would have been deferred for having sex with another man, for female donors who would have been deferred for having sex with a man who had sex with another man, for those with recent tattoos and piercings, and for those that have traveled to malaria-endemic areas.
Defense Production Act Invoked
Today, the President invoked the Defense Production Act for additional companies to ensure that “domestic manufacturers can produce ventilators.” Among the companies mentioned in his statement are General Electric, Hill-Rom, Medtronic, ResMed, Royal Philips, and Vyaire Medical.
April 1, 2020
April’s Cruel Days: Conducting a Census in a Crisis
As you may know, the United States is performing a nationwide census in 2020. This task is mandated by the Constitution and provides critical data that lawmakers, business owners, teachers, and many others use to provide daily services, products, and support for you and your community. With the current pandemic state of the U.S, the circumstances for a nationwide accounting, traditionally performed door-to-door, are less than ideal. So, what is the government doing to get an accurate count?
The issues presented by the spread of COVID-19 are not insignificant. The Census Bureau has been forced to suspend field operations for a month, from mid-March to mid-April, when the hiring process would normally be ramping up to 500,000 temporary census takers. A lack of free movement across the country will also make it much harder to accurately count those in group housing, such as nursing homes and college dorms that have been let out of school.
However, in addition to the traditional response methods such as phone and mail, this year the Census Bureau also has an online submission portal where information can be submitted electronically. We encourage all of our clients to fill out their census, as the results will be used to carve up congressional districts and draw state legislative districts. The more representation your state has, the more likely you have to identify a Member of Congress who understands your business and is sympathetic to your legislative priorities.
U.S. COVID-19 Daily Testing … Flat-lining?
The U.S. has reached 200,000 confirmed cases of coronavirus, a number that has continued to grow exponentially. Our testing, however, is not keeping pace.
An Unsurprising Headline: “China Concealed Extent of Virus Outbreak”
A Bloomberg report, out today, corroborates what foreign policy and healthcare experts have long suggested: China has been manipulating their Coronavirus cases statistics. It reveals that,”China has concealed the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House, according to three U.S. officials.”
Stop, You’re Going Too Fast: Senators Push for USMCA Implementation Delay
The bipartisan congressional push for the Administration to push back their USMCA implementation date is gaining steam. For several weeks, Members of Congress and business leaders have expressed skepticism and concern regarding USTR’s plan for a June 1 implementation date. This week, a bipartisan group of 19 members – seven Republicans and 12 Democrats – including the Chairman and Ranking Member of the Senate Finance Committee sent a letter to USTR urging them to “seriously reconsider” the proposed entry into force date. Citing the ongoing COVID-19 pandemic, the group expressed concern that businesses will not have the “information they need to adjust to the new rules and comply by that date.” As of now, USTR has shown no willingness to detour from the current plan.
Malaria Drugs Added to Shortage List
Hydroxychloroquine and chloroquine, two drugs that have been used to treat malaria that have been touted as COVID-19 treatments, have been added to the FDA’s drug shortage website. Patients who take the medications for lupus and rheumatoid arthritis, among other diseases, have reported that they are struggling for prescriptions to be filled. To help with supply concerns, Novartis has donated 30 million doses of hydroxychloroquine and Bayer has donated one million doses of chloroquine to the national stockpile for use by COVID-19 patients.
Jobless Claims Continue to Rise
The U.S. weekly jobless claims data will be released tomorrow, and experts expect the report will reveal more bad news. Morgan Stanley estimates a rise in jobless claims last week, ending March 28, from 3.28 million to 4.45 million.
March 31, 2o2o
The End of the Month: Where Are We?
March has been a tough month for Americans. As of today, there have been 169,539 confirmed cases of coronavirus and 2,893 confirmed fatalities. New York City has been hit hardest, with over 75,000 of cases in the state alone and 1,550 fatalities.
The Slides of March
To make matters worse, the government’s aggressive response has led to the worst quarter for the stock market since the 2008 financial crisis, ushering in an era of uncertainty that many Americans have little to no experience dealing with.
Locally Executed, State Directed, and Federally Supported
So, what are states doing in response?
The good news is that states are taking this threat seriously. So far, 39 states have issued an order relating to coronavirus, 30 of which have issued formal stay at home orders. Unlike other government responses, most of the heavy lifting is being done at the state and local level; action is locally executed, state directed, and federally supported.
Limited Tariff Relief: Defer, to Reassure
The White House is expected to announce the ability of businesses to delay certain tariffs payments for three months. However, the delay applies only to most-favored nation tariffs, not tariffs imposed by the Trump Administration through Section 232 or Section 301. The text of the order is likely to be released this week, at which point the details will become clearer as to when the deferral will begin and when further payments will be due.
Phase IV Outlining Begins
Speaker Nancy Pelosi has already begun to outline a Phase IV coronavirus relief package, just days after Phase III was signed by President Trump.
During a conference call on Monday, the Speaker said “Our first bills were about addressing the emergency. The third bill was about mitigation. The fourth bill would be about recovery. Emergency, mitigation, recovery…I think our country is united in not only wanting to address our immediate needs – emergency, mitigation, and the assault on our lives and livelihoods – but also, how we recover in a very positive way.”
Among other things, Pelosi hopes this legislation will address U.S. infrastructure, including: broadband connection, the energy grid, and water systems through the country. As of now, the House is recessed until at least April 20.
Vaccine, Treatment, and Testing Action
There has been a lot of action out of the FDA as of late. Our healthcare experts at Prime have summarized the significant actions in the last couple of days below:
- The Department of Health and Human Services (HHS) announced that they will be working with Johnson and Johnson and Moderna to accelerate and expand the manufacturing capacity of a coronavirus vaccine. Both vaccines may be ready for testing this Fall.
- The Food and Drug Administration (FDA) announced a new program, known as the Coronavirus Treatment Acceleration Program (CTAP), to rapidly provide input to developers of coronavirus treatments.
- Gilead announced that it would be expanding its access to its coronavirus drug remdesivir that has previously been used to treat patients with Ebola. The drug is still awaiting regulatory approval, but Gilead is expanding access to allow hospitals and physician to apply for the emergency use of remdesivir for multiple ill patients at a time, in addition to its current availability under the “compassionate use” program. Gilead has also rescinded its request for orphan drug designation for remdesivir.
- The FDA issued an emergency use authorization for hydroxychloroquine and chloroquine, two drugs that have been used to treat malaria. The drugs are unproven and the longer-term use of the drug to prevent the coronavirus is not covered under the authorization. The drugs will be distributed to hospitals as the FDA believes trying unproven treatments is worth the risk to slow the coronavirus. The FDA also announced that it does not intend to object to registered outsourcing facilities using hydroxychloroquine to compound the drug.
The FDA also approved an emergency use authorization for a second coronavirus test made by Abbott Laboratories. This test is capable of delivering results in as little as five minutes, is portable, and uses molecular technology. Abbott expects to produce around 5 million tests per month between its two products. As reported in the Wall Street Journal, the FDA has granted 20 emergency authorizations related to the new coronavirus and worked with about 230 test developers who have or are expected to seek that approval.
March 30, 2020
President Trump Signs CARE Act
On Friday, shortly after publication of our Daily Digest, President Trump signed the CARE Act into law, extending $2.2 trillion of aid to increasingly anxious Americans.
Trump Extends Social Distancing Guidelines Through End of April
Late this past weekend, President Trump announced that he is extending the suggested federal guidelines that Americans should avoid all nonessential travel until at least April 30.
“During this period, it’s very important that everyone strongly follow the guidelines. Have to follow the guidelines, ” President Trump told reporters, with members of the government’s coronavirus task force nearby. “Therefore, we will be extending our guidelines to April 30 to slow down the spread.”
Who Says Oversight is Unfun(ded)?
Today, it was announced that Glenn Fine, the acting Inspector General of the Department of Defense, will be overseeing the stimulus package, including the disbursement of all corporate loans. However, there seems to be a small technicality that may inhibit his oversight – the CARE Act provides absolutely zero Congressional funding for the oversight program.
This “technicality” is expected to be addressed in the Phase IV package.
Sterile, for Those in Peril
The FDA has approved the first ever system for sterilizing face masks worn by health workers battling the coronavirus in an effort to ease the shortage of Personal Protective Equipment (PPE.)
Initially, the FDA only approved the machines to clean a maximum of 10,000 masks per day; but, after pushback from Ohio Gov. Mike DeWine, the FDA reversed its decision on a daily cap. The decontamination system will now be shipped out to sites throughout the country as quickly as possible.
The Acceleration of Our Vaccination
The Department of Health and Human Services (HHS) announced that they will be working with Johnson and Johnson and Moderna to accelerate and expand the manufacturing capacity of a coronavirus vaccine. Johnson and Johnson will start phase one trails with financial support from HHS for Ad26 SARS-CoV-2, a vaccine against the coronavirus. The goal is to have this vaccine’s phase I clinical trial to be done no later than September, and have the vaccine available for emergency use in the United States in early 2021. HHS and Johnson and Johnson are working to prepare 300 million doses of its vaccine per year.
Moderna is also working with HHS to prepare for phase II and III clinical trials for a gene-based vaccine known as SARS-CoV-2 mRNA-1273. HHS will provide support and funding in producing thousands of doses of the vaccine for the studies.
Pentagon to Buy Ventilators
Bloomberg reported yesterday that “The Pentagon’s logistics agency has modified an existing contract and will spend $84.4 million to buy 8,000 ventilators from four vendors, with delivery of an initial 1,400 by early May.”
March 27, 2020
- Have the House approve the legislation by unanimous consent in an effort to prevent Members from having to fly back to Washington; or
- Establish a quorum, meaning a minimum of 218 Members must be present, and then pass the bill by voice vote.
The Speaker would have much preferred the first option. Now, enter the 5th term Congressman from Kentucky.
March 26, 2020
Phase III Passed
Last night, the Senate passed the 880-page, $2 trillion emergency package unanimously, by a vote of 96-0. For those with too much time on their hands, here is the link to the final bill text.
Friday Vote in the House: So, What’s Next?
Now that the bill has passed the Senate, it will be sent to the House and voted on quickly… right?
Not so Fast.
While Speaker Pelosi has said that her intention is to pass the Senate-passed CARES Act by voice vote in the House, it remains unclear if all members of her caucus or House Republicans will go along with that.
The House will convene at 9 a.m. tomorrow. House Leadership does not expect any objection to taking up the bill, which would be followed by two hours of debate where we expect several Republicans to speak on the bill. After that, it is likely that Democrats will recognize committee members to speak to provisions in the bill in response.
Now the fun starts.
The Speaker has signaled that the she will call for a vote tomorrow if there is a quorum comprised of a majority of Democrats in order to pass the bill as soon as possible. A quorum currently requires 216 members present. If Democrats do not outnumber Republicans, Speaker Pelosi will be forced to delay the vote to ensure that enough Democrats are present to pass the measure. Theoretically, this could require a final passage vote to be delayed for 24 hours to give members time to return to Washington.
The takeaway? This puts us anywhere from the bill being voice voted and passed tomorrow morning, to final passage not occurring until Saturday or, perhaps, Sunday.
Trump Tells Governors U.S. Should Rank Counties by Virus Risk
Today, President Trump sent a letter to U.S. Governors asking them to rank each of their counties by those at most risk for the coronavirus.
In the letter, President Trump said, “My administration is working to publish new guidelines for state and local policymakers to use in making decisions about maintaining, increasing, or relaxing social distancing and other mitigation measures they have put in place.”
“This is what we envision: Our expanded testing capabilities will quickly enable us to publish criteria, developed in close coordination with the nation’s public health officials and scientists, to help classify counties with respect to continued risks posed by the virus,” he wrote.
DOL Issues New Guidance
Today, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced more guidance to provide information to workers and employers about how each will be able to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA) when it takes effect on April 1, 2020.
Malaysia’s glovemaking association is warning of a chronic shortage of medical gloves. Malaysia is the producer of two-thirds of the world’s medical gloves and the Malaysian government has restricted movement in the country to stop the spread of the coronavirus allowing factories to only be staffed at 50 percent. Top Glove Corporation, the world’s largest producer said the demand from throughout the world is currently greater than its capacity and even at full capacity they wouldn’t be able to meet the current worldwide need.
Bloomberg has reported that drug manufacturers in China may have cut production close to 40 percent as the coronavirus has spread. A disruption in China’s output could result in shortages of medicine as they are a leading contributor of the world’s drug supply. Supply-chain experts say that some of the medications that may become scarce are ones that are needed for patients that are being kept alive by ventilators, such as certain antibiotics. Currently the coronavirus has not led to a widespread shortage of drugs in the United States.
March 25, 2020
Individuals making up to $75,000 a year would receive checks for $1,200.
The payments would decrease for those making more than $75,000, with an income cap of $99,000 for individuals or $198,000 for couples.
Couples making up to $150,000 would receive $2,400, with an additional $500 per child.
- The Senate Finance Committee’s Relief section-by-section can be found here.
- This legislation would increase the maximum state unemployment benefit by $600 per week for up to four months. This would include gig economy workers, furloughed employees and freelancers.
- ***This provision is stalling consideration of the CURES Act, as the four Senators seek an amendment vote to cap benefits commensurate with pre-COVID-19 wages.
- Roughly $350 billion would go toward loans for small businesses.
Companies with fewer than 500 employees could be eligible for up to $10 million in forgivable small-business loans to allow them to keep paying their employees.
Small businesses that maintain payroll would be eligible for assistance for costs such as mortgage interest, rent and utilities.
- The Senate Small Business Committee’s one-page summary can be found here.
- The bill is expected to provide $500 billion in aid for corporations, such as airline companies, that have been hurt by the coronavirus outbreak.
- Senate Democrats negotiated the inclusion of a Special Inspector General for Pandemic Recovery to ensure proper oversight and audit Treasury’s assistance to corporations.
- Trump’s businesses barred from bailout money in Senate coronavirus bill, as are businesses controlled by the president, vice president, members of Congress and heads of executive departments from receiving these loans.
- In addition to the Special Inspector General a five-person congressional oversight board was established and made responsible for selecting and confirming payments to companies. Additionally, Treasury Secretary Steven Mnuchin will be required to testify about the transactions.
- Further, the measure would create real-time public reporting of Treasury transactions under the act, including terms of loans, investments or other assistance to corporations.
- The bill would give more than $100 billion in assistance to hospitals.
- Additional funding would also be provided for the Centers for Disease Control and Prevention, transportation agencies, food stamps, child nutrition and other health care-related programs.
- The Senate Finance committee’s Health One-Pager can be found here.
- The measure would also provide about $150 billion in stimulus funds for state and local governments.
March 24, 2020
Phase III: Where Are We?
It appears that Congress is close to finalizing their Phase III agreement. After several days of tough negotiations, Speaker Pelosi and Senate Democrats are getting closer to yes on the deal. This morning, on CNBC, the Speaker told Jim Cramer that she had “real optimism that we could get something done in the next few hours.”
Phase IV? Phase V? Phase…
Today, Bloomberg reported that, “House Majority Leader Steny Hoyer said on a Democratic caucus call that Congress expects there to be a fourth and a fifth bill aimed at providing relief from the coronavirus, according to two people who were on the call.”
It remains unclear what would be in these packages or what a realistic timeline on their passage would be, but it would likely not be anytime soon.
President Trump Reconsiders COVID-19 Rhetoric
In an apparent change of tone, President Trump tweeted this morning that Americans want to return to work and that we can do that along with social distancing to ensure that the cure of the pandemic is not worse than the problem. The President later stated in a Fox New virtual town hall that he wanted the economy to “open” by Easter, which is in just three weeks.
House Economic Adviser Larry Kudlow also told Fox Business that they will be looking with health experts at the end of the week to identify where it’s possible to reopen the economy in areas that aren’t considered “hot zones”. These statements signal the Trump administration is beginning to consider how to move on from the current social distancing measures that have been put in place and send Americans back to work. This decision has raised concerns from health experts and it is likely that many Governors from around the country would maintain their current state directives around social distancing as they try to stop the spread of the coronavirus.
Defense Production Act Implemented
FEMA Administrator Peter Gaynor said today that the Trump Administration will formally implement the Defense Production Act for the first time, specifically to increase the number of medical equipment available in fighting the coronavirus pandemic. Gaynor said that the implementation of the Defense Production Act will allow access to 60,000 test kits and that the federal government will insert Defense Production Act language into the federal government’s order of 500 million personal protective masks.
Community Health Centers receive funding
The Department of Health and Human Services awarded $100 million to community health centers through the Health and Resources Services Administration that will be available immediately. The funding will go to the 1,381 community health centers to help with coronavirus testing and screening needs, boost telehealth capacity, and acquire medical supplies to best help deal with the coronavirus pandemic.
Politico reported today that, “Three sailors aboard the aircraft carrier USS Theodore Roosevelt in the Pacific have tested positive for the coronavirus, marking the first time the virus has spread to a deployed ship… The news is a significant cause for concern for Navy leaders given the high transmission rate of the virus. The danger is that the carrier, which has more than 5,000 people aboard, becomes a new cluster of Covid-19, as occurred on several commercial cruise ships in recent weeks. The sailors have been quarantined and are being flown off the ship today.”
March 23, 2020
Phase III: Where Are We?
The last 24 hours in the Senate have been as whirlwind. The Senate has now failed twice to clear a procedural hurdle to limit debate on H.R. 748, which is Majority Leader McConnell’s vehicle for his stimulus package. The cloture votes failed last night and today because Democrats want changes to the package that McConnell plans to offer – specifically, they want stricter oversight on the administration of the $500 billion stabilization fund. In response, Republicans have accused Democrats of acting politically in a time of crisis.
Minority Leader Chuck Schumer and Treasury Secretary Mnuchin have continued to negotiate today, and it possible that they will come to some sort of agreement in the coming days that would pass in both the Senate and the House. With that being said, the failed vote today has procedural consequences that may or may not slow down the legislative process.
Because Leader McConnell forced a vote today, he has now lost the ability to quickly vote again on cloture. That means that the bill must now be moved by unanimous consent – meaning, that if even a single senator opposes the deal, the next possible vote on cloture would be pushed back to one hour after the Senate convenes on Wednesday, which could be as early as 1:00 a.m.
This timeline would push back the cloture vote until Thursday, meaning the final vote on the substitute amendment – which, in this context, is McConnell’s bill – could be pushed back to Saturday. House members would then need over at least 24 hours of notice before they are called back to Washington for a vote.
The takeaway? Even if Schumer and Mnuchin come to an agreement tonight, they must get every senator on board with their agreement to get this legislation passed quickly.
Pelosi Releases a Competing Phase III Bill
To further complicate things, House Speaker Pelosi introduced Phase III legislation of her own this afternoon. House Speaker Nancy Pelosi released a statement regarding the bill that we have summarized below.
- The bill would require corporations that take taxpayer dollars to protect workers’ wages and benefits and not CEO pay, stock buybacks, or layoffs.
- Small business would be provided with grants and loans, unemployment insurance would be strengthened.
- Hospitals and health institutions would get increased funding for Personal Protective Equipment.
- Increases in direct payments to America’s families and the strengthening of the Child and Earned Income Tax Credits.
- Ask the President to invoke the Defense Production Act immediately.
- Schools and Universities would get an additional $40 billion in funding, $30 billion would go directly into states to stabilize school funding, and $10 billion to higher education institutions.
- GI bill benefits and SNAP benefits would both be increased and strengthened.
- Provide billions in grant funding to states to ensure that elections can be carried out including a national requirement for both 15 days of early voting and no-excuse absentee vote-by-mail, including mailing a ballot to all registered voters in an emergency.
Fed Announced Unlimited Bond Purchases
According to this morning’s Washington Post, “The Federal Reserve on Monday announced a sweeping measure to backstop all credit markets in the U.S. economy, without limits, the latest sign central bankers consider this economic crisis worse than the Great Recession, as millions of American households and businesses are getting crushed by the shutdown of daily life to slow the spread of the coronavirus.
The Fed will purchase Treasurys and mortgage-backed securities “in the amounts needed to support smooth market functioning,” effectively putting no limit on how much the Fed is willing to buy, saying the economy faces “severe disruption.” This extraordinary move goes much further than the 2008-09 financial crisis playbook, the last time the Fed injected trillions of dollars into the financial system through asset purchases and Wall Street bailouts.
The Fed is trying to prevent the recession from turning into a depression. With so many parts of the economy in a standstill at once — restaurants, airlines, hotels, auto manufacturers — there’s a massive need for short-term loans to triage the shocking loss of income until people can leave their homes again.”
Well, That’s a Headline:
U.S. Jobless Rate May Soar to 30%, Fed’s Bullard Says
Last night, Bloomberg reported that “Federal Reserve Bank of St. Louis President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50% drop in gross domestic product.”
FDA Authorizes New Testing
Over the weekend, the Food and Drug Administration (FDA) authorized its first test that can detect the novel coronavirus in approximately 45 minutes. This is the first emergency use authorization for a point-of-care COVID-19 diagnostic for the Cepheid Xpert Xpress SARS-CoV-2 test allowing results to be delivered directly to patients instead of samples being sent to medical labs. Cephid is hoping they can roll out the availability of this testing by March 30th.
It’s no secret that airlines have been hit particularly hard and will continue to struggle for the foreseeable future, however, it’s still shocking to see their decline in numbers.
Take United Airlines, for instance. According to Politico, “Last year, on the next-to-last Sunday in March, United flew 419,000 passengers at a load factor of 91%. Yesterday, United flew 64,000 domestic passengers at 24%. Last Sunday — March 15 — United flew 233,000. They lost 169,000 passengers from last week to this week.”
Pour Some Out…
It is our great displeasure to report to you that the 2020 Tokyo Olympics will be postponed indefinitely.
March 20, 2020
Majority Leader Mitch McConnell released the Senate Republican draft stimulus package last night. In it, he outlined Republican’s plan to provide recovery checks to Americans, delay filing deadlines, give government assistance to struggling businesses, and much more. Now that there is draft text, Democrats and Republicans will negotiate with the hopes of reaching a deal tonight. McConnell hopes to pass the bill on Monday, March 23.
- The legislation provides a total of $208 billion to the Secretary of the Treasury, through the Exchange Stabilization Fund, to provide sufficiently collateralized loans and loan guarantees to eligible entities, broken out in the following amounts:
- Up to $50 billion for passenger air carriers;
- Up to $8 billion for cargo air carriers; and
- Up to $150 billion for other eligible entities.
- The Treasury Secretary is afforded flexibility to provide collateralized loans and loan guarantees to domestic businesses that have incurred losses as a direct result of the coronavirus global pandemic, so they can maintain operations.
- Entities eligible for loans or loan guarantees are those for whom credit is not otherwise reasonably available at the time of the transaction.
- An entity is only eligible for relief if the Treasury Secretary determines its continued operations are jeopardized as a result of losses stemming directly from the coronavirus outbreak.
- Interest rates on any loans extended by the Treasury Secretary may be no less than the current average yield on outstanding marketable obligations of the United States of comparable maturity.
- The legislation explicitly bars the Treasury Secretary from using the funds provided to make grants or direct cash payments to entities: “Nothing in this Act shall be construed to allow the President or [Treasury] Secretary to provide relief to eligible entities except in the form of sufficiently collateralized loans and loan guarantees.”
- The legislation also mandates that entities receiving assistance under the Act do not increase compensation for, or provide golden parachutes to, executives over a two-year period from the date of enactment.
- The legislation directs the Secretary of the Treasury, to the extent feasible and practicable, to ensure that the Government is compensated for the risk assumed in making loans and loan guarantees. To that end, “the [Treasury] Secretary is authorized to enter into contracts under which the Government, contingent on the financial success of the eligible entity, would participate in the gains of the eligible entity or its security holders through the use of such instruments as warrants, stock options, common or preferred stock, or other appropriate equity instruments.”
Tax Filing Deadline Extension
The tax filing deadline for 2019 has been pushed back to July 15, after Treasury announced on Wednesday it was allowing taxpayers to delay payments until July. Treasury Secretary Steve Mnuchin said today that, “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties…. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
Federal student loan borrowers can suspend payments for 60 days
President Donald Trump announced that the Department of Education would allow federal student loan borrowers to suspend payments for 60 days. This announcement impacts over 42 million federal student borrowers. In addition to suspending payments, the Education Department announced that interest rates would be set to zero for all loans until at least May 12. This carries out the announcement President Trump make last week that interest for student loans would be waived.
Medical Licenses Across State Lines
Providers throughout the nation are seeking clarifications on Vice President Mike Pence’s announcement that would allow doctors and medical professionals to cross state lines to practice medicine allowing them to meet the needs of patients in different states. It is generally up to the state to waive restrictions on licenses and even with the emergency declaration that was declared by the President it is unclear how HHS could waive the state restrictions.
Navy Hospital Ships Update
The U.S. Navy is activating two hospital ships, the USNS Mercy and the USNS Comfort, to the Bay Area and to New York to help combat the coronavirus and alleviate hospitals. At full strength both ships can provide up to 1,200 doctors, nurses, and other medical specialists. The ships will be boarded by U.S. Navy medical personnel and be filled with medical supplies and equipment. The USNS Mercy is based in San Diego and is ready for activation immediately while the USNS Comfort which will be going to New York is currently in a maintenance period that will delay its activation.
March 19, 2020
State Department’s Advisory
Today, the State Department issued a Global Level 4 Health Advisory, encouraging Americans abroad to either come home immediately or to shelter in place until the COVID-19 crisis ends.
In a statement, the Department said the following: “The Department of State advises U.S. citizens to avoid all international travel due to the global impact of COVID-19. In countries where commercial departure options remain available, U.S. citizens who live in the United States should arrange for immediate return to the United States, unless they are prepared to remain abroad for an indefinite period. U.S. citizens who live abroad should avoid all international travel. Many countries are experiencing COVID-19 outbreaks and implementing travel restrictions and mandatory quarantines, closing borders, and prohibiting non-citizens from entry with little advance notice. Airlines have cancelled many international flights and several cruise operators have suspended operations or cancelled trips. If you choose to travel internationally, your travel plans may be severely disrupted, and you may be forced to remain outside of the United States for an indefinite timeframe.”
McConnell’s Phase III outline
Senate Republicans released their initial outline for the Phase III Coronavirus package today. We will feature a summary of this in tomorrow’s edition.
Governors Call with President Trump and Vice-President Pence
Today, President Trump and Vice President Pence had a conference call with state governors from across the nation. The governors asked the federal government for the following:
- Dedication of at least 50 percent of supplemental funding to the states, including direct funding and quick action on waiver requests.
- Increasing access to personal protective equipment, masks, test kits, extraction kits, and accelerating production of life-saving equipment, such as ventilation.
- Supporting Title 32 authorization to give governors maximum flexibility for use of the National Guard.
- Providing guidance on implementation of Defense Production Act to include what health and medical resources Secretary of Health and Human Services Azar is prioritizing under his new authority.
- Allowing more time and flexibility for completion of both the Census and the transition to REAL ID.
Food and Drug Administration Exploring Use of Therapeutic Drugs
President Trump said at his coronavirus press briefing today that the Food and Drug Administration (FDA) would accelerate the testing of therapeutic drugs to treat the Coronavirus by eliminating out-of-date rules and bureaucracy. President Trump said that there is Chloroquine, a drug used to treat malaria, is showing promise and that review of the drug would be fast-tracked. FDA Commissioner Stephen Hahn emphasized the importance of safety in finding a vaccine and that Chloroquine needs to be looked at in a clinical trial. Hahn also said that a vaccine would not be ready for another 12 months.
Food and Drug Administration Postpones Routine domestic inspections
FDA Commissioner Stephen Hahn announced the FDA will be cutting back on domestic inspections of all regulated products including drugs, devices, tobacco and food to protect inspectors from the coronavirus. For-cause inspections that are deemed mission critical by the administration will continue include responses to national disasters and other emergencies that impact products that are regulated.
Quarantined House Members
Reps. Mario Diaz-Balart (R-FL) and Ben McAdams (D-UT) became the first two members of congress to test positive for the Coronavirus. Both members are in good condition and are in self-quarantine for the time being. At least fourteen other members of congress announced they would also self-quarantine after they were in close contact with the lawmakers including Minority Whip Steve Scalise (R-LA).
The Alcohol and Tobacco Tax and Trade Bureau announced that any permitted distillery would be allowed to transition to making hand sanitizer without needing additional authorization or permits. TTB’s move allows these distillers to fill a critical need, while also helping an industry that has been hit hard by the current economic circumstances.
March 18, 2020
- This provision would appropriate an additional $50 billion to the ESF and authorize use of those funds for secured lending to U.S. passenger and cargo air carriers
B. Other Severely Distressed Sectors of the U.S. Economy ($150 billion)
- This provision would appropriate an additional $150 billion and authorize use of those funds for secured lending or loan guarantees to assist other critical sectors of the U.S. economy.
- Temporarily suspend the statutory limitation on the use of the Exchange Stabilization Fund for guarantee programs for the United States money market mutual fund industry.
- This provision would authorize and appropriate funds (fixed and tiered based on income level and family size) for two rounds of direct payments to individual taxpayers, to be administered by the IRS and Bureau of the Fiscal Service.
- Two rounds of $250 billion to be issued on April 6th and May 18th.
IV. SMALL BUSINESS INTERRUPTION LOANS
- To provide continuity of employment through business interruptions, this provision would authorize the creation of a small business interruption loan program and appropriate $300 billion for the program.
March 17, 2020
Following is a brief overview of the federal government’s response to the ongoing COVID-19 emergency. This includes the President’s declared state of emergency and the House-passed COVID-19 response legislation (H.R. 6201; the Families First Coronavirus Response Act.)
COVID-19: A National Emergency
On Friday, March 13, President Trump signed an executive order declaring the Coronavirus a national emergency. This was a two-part announcement; it activated parts of statues within the Stafford Act and the National Emergencies Act.
President’s Trump’s declaration did the following:
- Freed up $40 billion in funding reserved for the Federal Emergency Management Agency (FEMA) for supplies and personal. FEMA may also now coordinate, and, in rare cases, direct other federal agencies in their response to the disaster.
- Gave Health and Human Services (HHS) Secretary Alex Azar broader authority and new emergency powers in containing the virus. This includes the ability to “waive provisions of applicable laws and regulations to give doctors, hospitals – all hospitals — and health care providers maximum flexibility to respond to the virus.” This includes loosening restrictions on telehealth usage.
- Allowed the Department of Treasury to give tax filing flexibility to those affected by the virus.
- Gave HHS the power to grant states flexibility around testing for COVID-19.
Phase One: H.R. 6074
On Friday March 6th, President Trump signed H.R.6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act. This emergency funding package totaled $8.3 billion and supplied additional funding to the HHS, the State Department, USAID, and the Small Business Administration (SBA.)
Phase II: H.R. 6201
The House passed H.R. 6201 early in the morning on Saturday, March 14 on a bipartisan vote of 363-40 (1 present). Last night, the House passed a package of technical corrections to H.R. 6201 and sent the legislation to the Senate. The Senate is expected to vote on this bill as soon as possible and before moving on to a third package.
H.R. 6201 top line provisions:
- Creates an emergency paid sick leave program for those affected by the virus. Companies that employ less than 500 workers and government employers will be required to provide sick leave for those who are subject to self-quarantine or isolation, are diagnosed with COVID-19 or have symptoms, or are caring for a child that are sick or have had their school close because of the virus. All full-time employees are required to be given up to 80 hours under this program and part time workers will be compensated for their recent work history. Paid sick leave is based on salary and capped at $511 a day, while quarantine and childcare pay is based on 2/3rd of pay and capped at $200.
- Creates a refundable tax credit for the companies providing the paid sick leave described above. Companies that employ less than 500 workers are eligible for this refund while government employers are not. The credit expires on December 31, 2020.
- Creates an emergency paid family sick leave program for those affected by the virus. Companies that employ less than 500 workers will provide paid family sick leave for employees affected by the Coronavirus. Paid family sick leave is based on salary and capped at $200 a day.
- Creates a refundable tax credit for the companies providing the paid family sick leave described above. Companies that employ less than 500 workers are eligible for this refund while government employers are not. The credit expires on December 31, 2020.
A third broad economic stimulus package is being put together; unlike the other two packages, the Senate will be taking a larger role in drafting this legislation. Majority Leader McConnell has promised to keep the Senate in session until an economic package is passed and has created three different task forces who will work with Treasury Secretary Mnuchin in writing the bill. We expect a final package in the neighborhood of $1+ trillion, included but not limited to:
- Payroll holiday and/or direct checks to individuals ($500-550b)
- Creating liquidity for small businesses ($200-300b)
- Airline relief ($50-100b)
Senator Schumer has also advocated for an additional $750b focused on public health and social safety net measures:
- Hospital beds, ventilators, masks and equipment, child care, small businesses, public transportation, seniors, public housing, infrastructure, schools and children, and state and local relief ($400b)
- Unemployment insurance, Medicaid, the Supplemental Nutrition Assistance Program, and student debt ($350b)
Treasury Secretary Mnuchin promised that the stock market would continue to stay open, though trading hours are likely to be curbed. Mnuchin also announced that the Treasury would defer an additional $100 billion in Internal Revenue Service payments bringing the total of deferrable tax payments up to $300 billion, individuals will be able to defer up to $1M in tax payments, and that any direct payment to Americans would seek to exclude those who are well-off.