OCTOBER 6, 2020 LEGISLATIVE INSIGHTS
What We’re Watching on Capitol Hill This Week
INCLUDED IN TODAY’S COVID-19 UPDATE
LAST WEEK’S HIGHLIGHTS ...... 2
Jobs Reports...... 2
Continuing Resolution Signed into Law...... 2 WHAT TO WATCH THIS WEEK...... 2
Congress Breaks...... 2
President Heads to back to the White House...... 2
Stimulus Deal?...... 2
COVID Trends Raising Concerns...... 2 STIMULUS TALKS MAY RESUME...... 3 FIVE COVID-RELIEF BILLS TO WATCH...... 4
Sustaining Tourism Enterprises During the COVID–19 Pandemic (STEP) Act – S.4299...... 4
Paycheck Protection Small Business Forgiveness Act – S.4117...... 5
Keeping Critical Connections Act – S.3569...... 5
Workplace Safety Tax Credit – S.4178...... 6
Reviving the Economy Sustainably Towards a Recovery in Twenty-Twenty (RESTART) Act – S.3814...... 6 IMPORTANT COVID-19 RELATED LINKS...... 7
HBS Legislative Insights | October 6, 2020 1 Last Week’s Highlights
Jobs Reports
Last week’s report shows that 877,000 private-sector jobs were added to the economy in September and an additional 145,000 jobs from July and August. However, the report reflects a seasonally adjusted loss of 350,000 jobs in public and private education. Large gains were made in lower-wage jobs in retail and leisure and hospitality, and manufacturing added 66,000 jobs, its largest increase since June. This report indicates that more than half the jobs lost from the pandemic have now been restored, and the third quarter ended with a 7.9 percent unemployment rate. The Congressional Budget Office predicted in May that the unemployment rate would be at 15.8% in the third quarter of 2020.
Continuing Resolution Signed into Law
H.R. 8337 became law on October 1, 2020 and extends government funding through December 11, 2020, by H.R. 8337, averting a government shutdown that would otherwise have begun Oct. 1. The CR includes an agreement between Democrats and Republicans over farm and food aid programs.
All HBS COVID-19 Federal Response Updates can be found by clicking here.
What to Watch This Week
Congress Breaks
While the House and Senate remained poised to return if necessary (to pass a COVID-relief bill), both bodies have left Washington, D.C. and are not in regular session this week.
President Heads to back to the White House
President Trump, who was diagnosed with COVID on Friday, returned to the White House last night after a three day stay at Walter Reed Hospital. Yesterday afternoon, Trump said on Twitter that he’ll leave Walter Reed hospital this evening after being treated for COVID-19, calling on Americans not to fear the coronavirus. According to his doctor, Sean Conley, the President Trump continues to improve even though he isn’t entirely out of the woods.
Stimulus Deal?
Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin engaged in another round of virus stimulus talks over the last few days with little sign that they are close to a deal, despite the urging of Trump. The biggest matter slowing down progress remains how to bridge the funding gap between the Democratic $2.2 trillion proposal and a $1.6 trillion White House counteroffer.
COVID Trends Raising Concerns
Most U.S. states are seeing worsening trends in new cases as Covid-19 again spreads across much of the nation. In 34 states, the seven-day average of new cases is higher now than it was a month ago. Although
HBS Legislative Insights | October 6, 2020 2 the virus has waned in populous states including California and Florida, it is wreaking unprecedented havoc in the Midwest and there are ongoing concerns of the virus making a comeback in the Northeast. The U.S. Centers for Disease Control and Prevention updated its guidance to say Covid-19 can be spread indoors to people more than 6 feet away. Global infections surpassed 35 million.
Stimulus Talks May Resume
Despite the fact that talks between top Democrats and the Trump administration broke off at the beginning of summer and remained off track most of the August recess, fiscal markets believe that President Trump’s diagnosis boosts the likelihood of Congress and the White House reaching a deal on pandemic relief before the election.
Markets steadied Monday on easing fears over President Donald Trump’s health and increased optimism over fresh U.S. fiscal stimulus. Increased confidence that U.S. lawmakers may agree on fresh fiscal stimulus is helping the mood on Wall Street.
This week began with a more positive tone on talks. When combined with the news of the President’s release from hospital today, there appeared to be a new push for Congress and the White House to reach a deal on pandemic relief before the election.
Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin maintained talks by telephone since last week when they met in person for the first time since early August. They’re attempting to bridge the gap between the Democratic $2.2 trillion proposal and a $1.6 trillion White House counteroffer for another stimulus bill.
President Trump’s has signaled – via tweet from the hospital Saturday – to continue pressing forward on negotiations and told Congressional leaders to “get it done.” Despite these messages from the President, there was not an implicit agreement from the White House that the administration would endorse a bigger stimulus package.
There are numerous variables at play in the ongoing conversations and negotiations taking place on the Hill. For instance, the President’s pressure to keep the negotiations moving forward may be a direct result of a less than glowing jobs report from last week and an increasing number of polls showing President Trump falling behind former Vice President Biden. However, major hurdles still exist to reach a final agreement. Issues include ongoing concerns and disagreements on the topline number for the COVID- relief package, serious disagreements about unemployment insurance and the total amount of funding for state and local governments.
Additionally, with increased illnesses in the U.S. Senate, the ability to procedurally move legislation forward has been hampered. Furthermore, even an agreement to some sort of stimulus deal in the next few days would not guarantee the flow of any benefits to Americans for weeks to come. Once an agreement – or outline – is reached, Congress will most likely take 2-3 weeks to write the bill, be called back to Washington, overcome procedural delays in the Senate and pass the legislation.
HBS Legislative Insights | October 6, 2020 3 Although there appears to be widespread consensus in Washington that another stimulus is needed, particularly for hard-hit sectors of the economy - like airlines, White House Chief of Staff Mark Meadows indicated the administration may still resist a further move toward Pelosi’s bigger proposal. With that in mind, we suspect that Washington will be able to come to some agreement in the near future, and perhaps even before Election Day; however, the size and scope of the package will most likely be very limited.
Five COVID-Relief Bills to Watch
Numerous pieces of legislation that could be included in a final version of a COVID-relief package are making their way through Congress. We have identified a few key initiatives that are gaining broad bipartisan support.
Sustaining Tourism Enterprises During the COVID–19 Pandemic (STEP) Act – S.4299
U.S. Senators Catherine Cortez Masto (D-Nev.), Roy Blunt (R-Mo.), Amy Klobuchar (D-Minn.), and Kevin Cramer (R-N.D.) introduced bipartisan legislation to provide economic support for organizations involved in promoting and hosting tourism, travel, or other special events. The Sustaining Tourism Enterprises During the COVID–19 Pandemic (STEP) Act would modify existing Economic Development Administration (EDA) grant programs to provide direct support to the hard-hit tourism and travel industry to promote economic recovery and help increase public confidence as these industries look to reopen safely in the future.
Senator Blunt noted that “the travel and tourism industry is a critical part of our state’s economy and one that’s been hit hard by the COVID-19 pandemic. This bill will help tourism-related businesses, and the hundreds of thousands of jobs they support, get back to full speed as quickly and safely as possible. I urge all of our colleagues to support this bill and the hardworking men and women who have made Missouri a national and international travel destination.”
The travel industry has historically taken the longest to recover from economic downturns, and travelers understandably need reassurance that travel is safe during a pandemic. The STEP Act would authorize $10 billion in funding through the EDA to provide grants for tourism and event entities impacted by COVID–19. Grants are available to any entities (states, tribes, regional groups, nonprofits, quasi-governmental organizations, and private businesses) that:
• perform tourism promotion operations;
• host, organize, own, operate, or staff event venues, conventions, or trade shows; or
• provide services as a concessionaire to events and tourism locations.
Applicants will be asked to provide the local negative economic impact, including job losses, and there is no local funding match requirement. The funding would support:
• tourism marketing and promotion activities necessary to assist with economic recovery;
HBS Legislative Insights | October 6, 2020 4 • paying cleaning and sanitary costs, including physical modifications, associated with precautions to provide for safe worker, traveler, or event environments;
• paying costs of salaries and expenses associated with the operations of the applicants.
The complete text of S. 4299 can be found by clicking here.
Paycheck Protection Small Business Forgiveness Act – S.4117
Senator Cramer with Senator Bob Menendez (D-NJ) introduced the bipartisan Paycheck Protection Small Business Forgiveness Act in June. The legislation streamlines forgiveness of approximately 4.2 million PPP loans of $150,000 or less, which account for 86 percent of PPP loans but only 27 percent of PPP funds.
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress created the “Paycheck Protection Program” (PPP) to provide loans to help small businesses stay afloat and retain employees during the COVID-19 pandemic. The PPP delivered over $500 billion to struggling businesses who used it to save jobs and keep themselves afloat. The PPP also provided a path for the loans to be forgiven if they were used properly. The legislation was backed by 31 senators including Senators Doug Jones (D-AL) Joe Manchin, (D-WV), and Kyrsten Sinema (D-AZ).
According to some experts, the current procedures to receive loan forgiveness could cost small businesses $2,000 and lenders $500 for PPP loans of less than $150,000. The legislation helps countless small businesses avoid the burdensome cost of superfluous bureaucracy required to arrive at the forgone conclusion of loan forgiveness by implementing a few commonsense changes. The bill would give small businesses peace of mind by eliminating unnecessary bureaucratic requirements and simplifying the process for forgiving smaller loans. The Act offers forgiveness for PPP loans of $150,000 or less if the borrower submits a simple, legally-binding, one-page attestation form to the lender.
The complete text of S. 4117 can be found by here.
Keeping Critical Connections Act – S.3569
Senators Cramer and Klobuchar introduced the Keeping Critical Connections Act in March to provide funds for smaller broadband providers to be compensated for broadband services — if they provided free or discounted broadband services or upgrades — during COVID-19 for low-income families who could not afford to pay their bills or provided distance learning capability for students.
This bill provides funds with which the Federal Communications Commission will reimburse small business broadband providers for costs incurred during the COVID-19 (i.e., coronavirus disease 2019) emergency period to voluntarily (1) provide free or discounted service to students in need of distance learning capacity, or (2) refrain from disconnecting low-income households that cannot afford to make a full payment.
The proposal is cosponsored by 35 senators including Senators Gary Peters (D-MI), Tina Smith (D-MN), Tammy Baldwin (D-WI), Jon Tester (D-MT), Jacky Rosen (D-NV), and Doug Jones (D-AL). Representatives Peter Welch (D-VT-AL) and Roger Marshall (R-KS-01) introduced the House companion.
The complete text of S. 3569 can be found by here.
HBS Legislative Insights | October 6, 2020 5 Workplace Safety Tax Credit – S.4178
Senators Cramer and Sinema introduced the bipartisan Workplace Safety Tax Credit. The legislation would establish a workplace safety tax credit to help small businesses and nonprofits implement COVID-19 prevention measures. The proposal would offset the costs of safely and smartly reopening in 2020 and provides a slightly lower tax credit to employers in 2021 as they continue to maintain safe workplaces. It is limited to two years and to companies with less than 2,000 full-time employees.
The complete text of S. 4178 can be found by here.
Reviving the Economy Sustainably Towards a Recovery in Twenty-Twenty (RESTART) Act – S.3814
Senators Michael Bennet (D-Colo.) and Todd Young (R-Ind.) introduced the Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART) Act to support the small- and mid-sized businesses most affected by the Coronavirus Disease 2019 (COVID-19) crisis. The legislation helps the hardest-hit restaurants, gyms, hotels, retailers, and other businesses facing economic harm from COVID. The RESTART Act would give business owners who took out Paycheck Protection Program (PPP) loans the flexibility they need to utilize the PPP effectively. The RESTART Act would also create a loan program to provide funding to jump-start the hardest-hit businesses for the remainder of 2020 and provide loan forgiveness as a backstop against ongoing economic challenges.
The RESTART Act is supported by numerous associations and trade organizations, including the National Association of Theatre Owners (NATO), the American Society of Travel Advisors (ASTA), the Equipment Leasing and Finance Association, the National Independent Venue Association, the PLAY Sports Coalition, the Live Events Coalition, the National Restaurant Association, the Outdoor Amusement Business Association, the Sports Events and Tourism Association, the Broadway League, Snowsports Industries America (SIA), the American Sportfishing Association (ASA), the Outdoor Industry Association (OIA), the National Marine Manufacturers Association (NMMA), the Marine Retailers Association of the Americas (MRAA), the Vail Valley Partnership, the International Franchise Association (IFA), the National Independent Talent Organization (NITO), and the National Association of Manufacturers (NAM).
Some Key Aspects of the RESTART Act include a near-term fix to PPP for hardest-hit businesses. The RESTART Act includes a simple fix to address a shortcoming of the PPP for many of the most-affected businesses: extend the 8-week covered period to deploy PPP funds and earn loan forgiveness to 16 weeks after the loan is disbursed for the hardest-hit businesses that have seen revenues decline by at least 25%.
Additionally, the PPP has worked well for some businesses, but is often less effective for the businesses that should be receiving the most assistance – the smallest businesses or those who have seen revenues decline the most. Its limited duration will also leave many of the most-affected businesses without support in the difficult months ahead. The RESTART Act provides funding to cover the next 6 months of payroll, benefits, and fixed operating expenses for businesses that have taken a substantial revenue hit during the COVID-19 pandemic.
HBS Legislative Insights | October 6, 2020 6 Under the program, a share of that loan will be forgiven based on the revenue losses suffered by the business in 2020, and the remainder can be repaid over 7 years, with no interest payments due in the first year and no principal due for the first two years. This program is designed to provide small- and medium-sized businesses with loans to get their businesses going again and ensure that they receive loan forgiveness to help fill in a loss in revenues.
The complete text of S. 3814 can be found here.
Important COVID-19 Related Links
• For information on the Federal Reserve Board’s Main Street Lending Facility, please visit: https://www.federalreserve.gov/newsevents/pressreleases/monetary20200430a.htm
• For information on the Department of Education’s CARES Act’s Higher Education Emergency Relief Fund, please visit: https://www2.ed.gov/about/offices/list/ope/caresact.html
• For Department of Treasury resources on COVID-19 and Small Business’ Assistance programs, please visit: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for- small-businesses
• For Department of Treasury resources on the Coronavirus Relief Fund for payments to State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak, please visit: https://home.treasury.gov/policy-issues/cares/state-and-local-governments
• For information on the Small Business Administration’s Paycheck Protection Program, click here.
• For information on Unemployment Insurance Program Letter (UIPL) 16-20 providing guidance to states for implementation of the Pandemic Unemployment Assistance (PUA) program, click here.
• For more information on UIPLs or previous guidance, please visit: https://wdr.doleta.gov/ directives/.
• For Department of Labor resources on COVID-19, please visit: https://www.dol.gov/coronavirus.
• For Department of Agriculture resources on COVID-19, please visit: https://www.usda.gov/ coronavirus
• For Department of Homeland Security resources on COVID-19, please visit: https://www.dhs. gov/coronavirus
• For U.S. Immigration and Customs Enforcement resources on COVID-19, please visit: https:// www.ice.gov/coronavirus
• For Department of State resources on COVID-19, please visit: https://www.state.gov/ coronavirus/
• For United States Agency for International Development resources on COVID-19, please visit: https://www.usaid.gov/coronavirus
• For more information about COVID-19 from the Centers for Disease Control and Prevention (CDC), please visit: https://www.cdc.gov/coronavirus/2019-ncov/index.html.
HBS Legislative Insights | October 6, 2020 7 • For more information about COVID-19 from the National Institutes of Health (NIH), please visit: https://www.nih.gov/health-information/coronavirus
• For information on the U.S. Election Assistance Commission’s 2020 HAVA Coronavirus Aid, Relief and Economic Security (CARES) Act Grants, please visit: https://www.eac.gov/payments- and-grants/2020-cares-act-grants
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