Last Friday, President Trump signed into law $8.3 billion in emergency funding to fight COVID-19. As emergency spending, this funding is exempt from discretionary spending caps. It is also three times more than the President initially requested from Congress for new funds—and certainly will be followed by additional spending.
This initial spending provides $3.1 billion—and enormous spending flexibility—to the Secretary of Health and Human Services (HHS). The funds were designated for the HHS Secretary’s public health emergency account and can be spent on vaccine development and additional supplies, including masks and personal protective equipment.
An additional $950 million is provided for state and local public health departments and can be used for hiring, to buy equipment, and on improving data analytics. The emergency spending package does not address how much money will go to reimburse medical care providers or patients for expenses related to COVID-19 treatment.
President Trump and Congressional Republicans are currently working on a proposal to reverse the economic impact of COVID-19. Initial ideas include payroll tax relief, Small Business Administration loans for businesses hurt by the economic slowdown, targeted relief for the travel industry, and relaxed loan repayment obligations. Congressional Democrats are developing their own proposals, including support for paid sick and family leave, the expansion of unemployment insurance, food stamps and other public assistance programs, and free medical testing and care.
Given the unprecedented potential impacts of the COVID-19 outbreak, all options are on the table for the scale and scope of federal stimulus programs. In 2009, Congress passed the American Recovery and Reinvestment Act, a $787 billion bill which included a range of taxes and appropriations. This stimulus measure was seen as a success at reducing unemployment and preventing further economic collapse. The Trump Administration and Congress may even be able to use this crisis to align on direct government spending on infrastructure, which has broad bipartisan popularity and would likely drive down unemployment.
Stakeholders in nearly every industry have an important opportunity to engage with DC policymakers as Washington considers new tax breaks and additional spending as part of a national fiscal policy response to COVID-19.
