Yesterday, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer announced plans to release their latest legislative response to the ongoing coronavirus pandemic as early as next week, following Speaker Pelosi’s directive that House committees finish their text by week’s end. The package, which will originate in the House, is expected to top $1 trillion and will serve as a marker of Democratic priorities. Senate Majority Leader Mitch McConnell has voiced significantly more skepticism about the timing—and scope—of any fifth package. With that in mind, however, here is what we see to be the most likely provisions included in the House’s comprehensive package:

• Robust funds for states and localities. Soon after the passage of the third stimulus package, Democratic leadership signaled that aid to states and localities would be a top priority. State and local entities, especially those hardest hit by the coronavirus, have been clamoring for more funding, as response efforts coupled with much lower tax revenues are draining budgets.
• Increased, expanded unemployment benefits. With 20.5 million jobs lost in April and the unemployment rate hitting 14.7 percent in May, the largest one-month rise since the Bureau of Labor Statistics has been recording it, House Democrats are expected to push for an extension of enhanced unemployment benefits. The bill is also likely to include expanded COBRA subsidies geared towards covering the entirety of the cost of a recently laid-off person’s healthcare premiums, in addition to those of furloughed workers.
• More robust employee retention tax credit. Bipartisan legislation introduced today would more than double the value of the tax credit per employee per quarter and reduce limits on how many employees are required for an employer to qualify for the credit.
• Hazard pay. These provisions would increase pay for healthcare workers on the frontlines of the pandemic and other essential workers in high-risk environments. There is also a possibility of hazard pay for essential workers in the federal government, an idea recently promoted by a group of 19 bipartisan senators.
• Extended, expanded FMLA provisions. We expect to see expanded FMLA provisions that build on those included in previous COVID-19 legislation by protecting paid family leave for federal workers unable to take time off as a result of the pandemic.
• Extended and enhanced FMAP bump. This would be a further enhancement to the provision in previous legislation that authorized a 6.2 percent increase in federal Medicaid matching funds to help states respond to the pandemic. These funds currently last until the end of the quarter in which the public health emergency period ends.
• Changes to PPP. Given the widespread and bipartisan, bicameral support for modifications to the PPP, we expect to see the House include several targeted measures to clarify, improve and strengthen the PPP, particularly around loan forgiveness and payroll requirements.
• Other provisions included in the Speaker’s CARES proposal that were not included in the final package. The bill will likely contain Democratic priorities not included in CARES such as: direct payments to noncitizens residing in the United States in addition to another round of individual stimulus checks; election assistance; multiemployer pension reform; additional funding for testing; contact tracing and vaccine therapies; USPS funding; enhanced OSHA safety guidance; a collection of diversity data from any corporation that receives further aid; broadband funding; and further assistance to distressed borrowers and renters, possibly including help with utility payments or expanded forbearance.

We expect negotiations on this fifth package to be lengthy and difficult. As previously stated, Senate Majority Leader has taken a more cautious approach and tone when discussing the parameters of additional legislative action. Modifying his original stance on state and local aid, McConnell now appears open to its inclusion but has repeatedly said he will not agree to any bill without the inclusion of a liability shield for businesses. It is worth noting, however, that McConnell will likely place strict, COVID-related limits on any state aid and has been actively outspoken against “bailing out” states who have mismanaged their finances, specifically their pension funds.While the White House has struck a more conciliatory tone on state and local aid, similarly, it has also drawn a “red line” insisting on the inclusion of a payroll tax break in the next package, though Republicans and Democrats alike seem unconvinced of its necessity or value. Given the many competing political concerns and a dramatic election season nearly upon us, prepare for many offers and counteroffers before a final package can clear both chambers.