[co-author: Taylor Daly, Policy Specialist]

Senate Negotiates Phase 3, Aims for Passage by Monday

Senate bipartisan working groups met well into the night on Friday and throughout the day on Saturday to negotiate Phase 3 of the Coronavirus response following Senate Republicans’ release of the Coronavirus Aid, Relief, and Economic Security (CARES) Act with an overarching goal of having a deal and legislative text by 5 p.m. today. The timeline has slipped, but negotiations continue in a positive and bipartisan manner, with the hopes of having a deal and legislative text by midnight tonight.

Procedurally, the Senate is in the intervening day of the cloture process. At 3:00 pm on Sunday, March 22, the Senate will proceed to a roll call vote on the motion to invoke cloture on the motion to proceed to H.R. 748, the legislative vehicle for Phase 3. Both Congress and the White House have outlined a shared goal of holding a vote on final passage of the Phase 3 package by Monday.

As federal, state and local governments continue to escalate their responses to the pandemic, the latest actions and developments may be found below, and Akin Gump will continue to provide regular policy developments related to COVID-19.

Stimulus Update: Senate Continues Negotiation on Phase 3, Additional Phases Likely

• Phase 3: Leader McConnell (R-KY) released his proposal for Phase 3 of the COVID-19 response on Thursday (Bill Text). In response, Democrats released a document outlining their concerns about the package on Friday. The Senate began negotiations on the package Friday and has continued to engage in discussion over the weekend.
• In light of the guidance issued by the Centers for Disease Control and Prevention (CDC), the House will be adjusting its schedule moving forward and is expected to adjust its voting procedures to adhere to these recommendations.

Section-by-Section Summary of GOP Phase 3 CARES Act

• Division A — Small Business Interruption Loans: Would increase the maximum 7(a) loan amount to $10 million for eligible businesses with 500 employees or less from March 1, 2020 to December 31, 2020 and expands allowable uses of 7(a) loans to include payroll support. The bill includes provisions for entrepreneurial development which authorize the Small Business Administration (SBA) to provide additional financial rewards to resource partners. The measure also provides loan forgiveness equal to the payroll cost from March 1, 2020 to June 30, 2020, and directly appropriates $299.4 billion for loan guarantees, $300 million for salaries, and $240 million for small business development centers. The proposal authorizes $10 million for the Minority Business Development Agency (MBDA) and waives prepayment penalties for loans made during the covered period.
• Division B — Relief for Individuals, Families, and Businesses: Would provide up to $1,200 recovery checks directly to individuals, extend the tax filing deadline by two months to July 15th, waive early withdrawal penalties from qualified retirement accounts for coronavirus-related purposes, and alter regulations on charitable contribution deductions in 2020. Additionally, the CARES Act includes several measures of relief for businesses, providing for a delay in estimated tax payments for corporations and allowing employers to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees.
• Division C — Assistance to Severely Distressed Sectors of the Economy: Would provide a total of $208 billion in collateralized loans and loan guarantees to impacted entities, including 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 measure would also repeal Federal Excise Taxes collected in relation to commercial aviation through the end of the year.
• Division D — Health Care Response: Would provide liability protection for manufacturers of personal respiratory protective equipment, and require the Food and Drug Administration (FDA) to expedite the review of drug applications and inspections to mitigate a drug shortage, as well as establish new reporting requirements for device shortages. In an aim to increase access to COVID-19 care, the bill would eliminate sequestration payment cuts to Medicare providers from May 1 through the end of 2020, provide an add-on payment to hospitals for COVID-19 patients, and increase Medicare rates to home equipment suppliers for the duration of the national emergency. It would also clarify that all testing for COVID-19 be covered by private insurance plans without cost sharing and provide $1.32 billion in supplemental funding to community health centers to test and treat patients for COVID-19. The measure aims to speed up innovation by removing the cap on other transaction authority (OTA) and extending the FDA’s priority review voucher program. The package’s education provisions would waive the institutional matching requirement for campus-based aid programs and allow institutions to transfer unused work-study funds to supplemental grants. Under the measure, employers would not be required to pay more than $200 per day and a total of $10,000 for paid family and medical leave or more than $511 per day and a total of $5,110 for sick leave.
• Division E — Temporary Permit Use to Guarantee Money Market Mutual Funds: Would temporarily suspend the statutory limitation on the use of the Exchange Stabilization Fund for guarantee programs for the money market mutual fund industry.
• Division F — Budgetary Provisions: Emergency designation.

Administration Updates

Coronavirus Task Force Briefing Highlights

On Saturday morning, March 21, the White House Coronavirus Task Force conducted a briefing from the White House Press Briefing Room. Highlights of the discussion include:

• White House officials reiterated that the Administration currently has no plans for a federal quarantine, noting states “have been creating the rules day by day.”
• Last night, President Trump approved a major disaster declaration for New York, noting that he is working with states such as California to potentially do the same thing.
• President Trump noted that House and Senate Leadership is negotiating a Phase 3 solution, indicating that the group is close to reaching an agreement. He reiterated his opposition to stock buybacks, noting that he is strongly recommending a buyback exclusion. Vice President Pence indicated that they are looking to pass this package on Monday in both chambers.
• Vice President Pence stated that the Task Force is working closely with the Federal Emergency Management Agency (FEMA) to process requests for states most impacted by the outbreak. He reported that the Department of Health and Human Services (HHS) has recently placed an order for “hundreds of millions” N95 surgical masks, with this effort being coordinated through FEMA.
• ADM Brett Giroir, Assistant Secretary for Health, stated that 91 state public health labs are currently up and running. This number accounts only for the CDC’s state public health labs and labs that are members of the American Clinical Laboratory Association. This number does not account for hospital-based labs, but HHS plans to obtain data this week on all labs.
• Secretary Ben Carson indicated that the Department of Housing and Urban Development is in contact with public housing agencies (PHAs) across the country and is petitioning Congress for power to protect renters in PHAs.

Relevant Links

• Phase 3: Majority Leader McConnell (R-KY) remarks on the Senate floor regarding the CARES Act: “We Need to Finish Up These Negotiations and Move Forward”
• Phase 3: McConnell on CARES Act: We’re Going to Stay Until We Get This Done
• Phase 3: Senate GOP CARES Act
• Phase 3: Senate GOP CARES Act Section-by-Section Summary
• Phase 3: Senate GOP CARES Act High-Level List of COVID-19 Relief
• Phase 3: Senate GOP CARES Act Finance Health Section-by-Section
• Phase 3: Senate GOP CARES Act HELP Section-by-Section
• Phase 3: Senate GOP Rubio/Collins RESCUE Business Act
• Phase 3: Senate Dems Leader Schumer Memo providing more details around his policy goals for the third COVID-19 response package
• Phase 3: Senate Dems public health and economic emergency proposal presentation
• Phase 3: House Dems Speaker Pelosi Dear Colleague on Families and Workers First Response to Coronavirus
• Phase 3: House Dems Financial Services Committee Analysis of CARES Act
• Phase 3: House Dems Energy and Commerce Committee Memo on Oversight of the Administration’s Response to COVID-19
• Phase 3: House Dems Energy and Commerce Committee National Emergency Declaration Fact Sheet
• Phase 3: House Dems Energy and Commerce Committee COVID-19 Testing Fact Sheet
• Phase 3: House Dems Blue Dog Recommendations for Coronavirus Economic Support and Stimulus Package
• Phase 3: Problem Solvers Caucus Health Crisis and Economic Revival Package
• Phase 3: Department of Treasury Recommendations
• Treasury, IRS, and Labor Announce Plan to Implement Coronavirus-Related Paid Leave for Workers and Tax Credits for Small and Midsize Businesses to Swiftly Recover the Cost of Providing Coronavirus-Related Leave

Akin Gump Alerts and Other Resources Related Content

• COVID-19 Policy Update (March 20, 2020)
• Overview of Federal Coronavirus (COVID-19) Stimulus Measures
• President Trump and Congress Move to Make Small Business Loans Available in Wake of COVID-19
• COVID-19: Business Continuity and Succession Planning
• Coronavirus, the Economic Impact and the Board’s Role
• Insurance Coverage Questions In Light of Coronavirus
• SEC Guidance for Public Companies and Investment Advisers
• Tax Filing Extensions Due to Coronavirus
• Federal Income Tax Payment Deadline Delayed to July 15 Amid COVID-19 Crisis
• United States Suspends Visa Services Abroad, Cancels ESTA Entry Authorizations for European Visitors and Closes USCIS Field Offices, in Response to the Novel Coronavirus (COVID-19) Pandemic
• Coronavirus and the Workplace by Richard J. Rabin, Grace Margaret O’Donnell.
• SEC Permits Late Filing of Form ADV due to COVID-19
• The March to Cancel: Contract and Insurance Implications of Coronavirus-Related Event Cancellations
• COVID-19 Impact on Annual Shareholder Meetings
• COVID-19’s impact on global corporate transactions

Tweets

U.S. Department of the Treasury:

• Tweet at 6:18 PM, March 20, 2020 (Link)
  • “Treasury, IRS, and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small to midsize businesses to swiftly recover the cost of providing Coronavirus-related leave. (Press Release)”

White House National Security Council (NSC):

• Tweet at 7:49 PM, March 20, 2020 (Link)
  • “PSA: Text messages and emails about national quarantines are absolutely false and started by those wanting to cause fear and confusion in our country. Continue to listen to CDC, coronavirus.gov and your state/local officials for latest updates and definitely guidance.”

U.S. Food and Drug Administration (FDA) Commissioner Dr. Stephen Hahn:

• Tweet at 5:16 PM, March 20, 2020 (Link)
  • “Today, FDA issued a policy allowing manufacturers of certain FDA-cleared, non-invasive, vital-sign-measuring devices to expand their use so that health care providers can use them to monitor patients remotely. (Press Release)”

Senate Majority Leader Mitch McConnell (R-KY):

• Tweet at 9:09 PM, March 20, 2020 (Link)
  • “Laid-off workers cannot wait. Struggling Main Street businesses cannot wait. Our hospitals and health centers cannot wait. This crisis is moving fast. The Senate is here, we are working, and we need to deliver.”

Senate Minority Leader Chuck Schumer (D-NY):

• Tweet at 5:46 PM, March 20, 2020 (Link)
  • “Pres. Trump told me today he'll IMMEDIATELY use Defense Production Act to get critical medical equipment made & into the hands of those who need it. We need this now—Hospitals in NY & nationwide need tests, ventilators, personal protective equipment, more.”

• Tweet at 7:10 PM, March 20, 2020 (Link)
  • “Pres. Trump just approved a major disaster declaration for New York to fight coronavirus. Senator Gillibrand and I pushed for this! FEMA needs to get to work NOW to open these MANY billions in direct aid for New York and individuals to help save lives and protect public health.”