COVID-19 Federal Updates: May 13, 2020
Updated: Jun 9
Dr. Anthony Fauci, the administration's top infectious disease expert, warned the U.S. Senate yesterday that states should not reopen faster than White House guidelines.
The $3 trillion economic rescue bill that the House Democrats unveiled yesterday would make major changes to small business loan programs. The text of the HEROES Act, H.R. 6800, is here.
A one pager on the legislation is here.
A section-by-section summary is here.
A resource on the state and local relief provisions is here.
The bill would make several adjustments to the Paycheck Protection Program (PPP), which offers low-interest loans that can be forgiven if borrowers agree to maintain their payrolls. The revisions would expand the universe of organizations able to receive the loans and limit the Trump administration's ability to restrict how the loans are used.
Among the provisions in the bill is one that would allow nonprofits of any kind to apply for Paycheck Protection Program loans. While the idea has bipartisan support, it will likely also create controversy because it would open-up the program to 501(c)(6)s, which include business trade associations.
Another measure would prevent the Small Business Administration (SBA), which runs the program, from limiting the portion of the loans that can be spent on non-payroll costs if borrowers want the loans forgiven. The SBA and the Treasury Department decided at the outset of the program that businesses could spend no more than 75 percent of the forgivable amount of the loans on expenses outside of payroll. Some businesses are concerned that the cap is too onerous. Treasury Secretary Steven Mnuchin has refused to ease the requirement on his own but says he's open to working with Congress on that.
Addressing another criticism from businesses, the bill would give borrowers 24 weeks to spend loan funds, an increase from the current eight weeks set now.
The bill would not appropriate new funding for the program, but it includes carve-outs for nonprofits and small businesses with fewer than 10 employees, as well as a set-aside for community financial institutions.
In addition, the bill includes $10 billion for Economic Injury Disaster Loan grants.
The House plans to vote on the bill this Friday.
"This is not a time for aspirational legislation, this is a time for practical response to the coronavirus pandemic," Senate Majority Leader Mitch McConnell told reporters after the House bill was released.
Senate Republicans are privately putting together possible priorities of their own for the next COVID-19 relief package, which some believe will set the stage for a bill to be passed this summer.
Issues Senate Republican may want to address include: a litigation shield for businesses that reopen as the pandemic carries on and a reform of beefed-up unemployment benefits that Congress approved in March.
A group of legislators including Representative Marcy Kaptur and Representative Anthony Gonzalez want upcoming coronavirus relief packages to include help for the auto industry.
They sent a letter Tuesday that asked Republican and Democratic leaders in the U.S. House of Representatives to ensure “that American workers in the automotive industry can help drive a robust recovery.”
Representatives Anthony Gonzalez, Dave Joyce, and Brad Wenstrup introduced a bi-partisan bill on Tuesday to help small businesses, those that are unable to fully reopen in the coming weeks.
The Promoting Flexibility for Small Business Owners Act would provide restaurants, retailers, and other similar businesses with more time to meet the requirements to receive full forgiveness of their Paycheck Protection Program (PPP) loan.
Treasury Secretary Steven Mnuchin on Monday encouraged states "that have cash flow issues" to take advantage of low interest rates and borrow money to cover revenue lost due to the coronavirus pandemic.
The Federal Reserve Board on Tuesday announced additional information regarding borrower and collateral eligibility criteria for the Term Asset-Backed Securities Loan Facility (TALF).
The facility was announced on March 23 as part of an initiative to support the flow of credit to U.S. consumers and businesses.
To help ensure that U.S. consumers and businesses remain able to access credit at affordable terms, TALF initially will make up to $100 billion of loans available.
With steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon today, for a chance at quicker delivery.
Stay informed with Economic Impact Payment FAQs and social media platforms - taxpayers should check the Frequently Asked Questions (FAQs) for more information.
On Tuesday, the Internal Revenue Service issued proposed regulations under the Tax Cuts and Jobs Act (TCJA) that provide guidance to taxpayers and governments with respect to fines, penalties and certain other amounts.
The U.S. Department of Labor today issued targeted guidance and reminders that provide states with details regarding required integrity functions for their regular unemployment compensation programs, as well as those authorized by Pandemic Unemployment Assistance, Federal Pandemic Unemployment Compensation and Pandemic Emergency Unemployment Compensation of the Coronavirus Aid, Relief and Economic Security (CARES) Act, in UIPL 23-20. The guidance aims to help states guard against fraud and abuse of their unemployment insurance systems.