Ten legislative days?

What remains for Congress before the August recess?

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The Senate reconvenes today, and the House returns to Washington for votes. This week both chambers will consider the National Defense Authorization Act (NDAA) on the floor. Behind the scenes, negotiations will begin on the next coronavirus relief bill, with the goal of passing legislation before the House’s scheduled adjournment for August recess on July 31. But with the Senate scheduled to remain in town through the week of August 3, smart money is on a bill going to the president in early August. Beyond the relief package, Congress is focusing on appropriations, policing reform, extending temporary telehealth waivers, and infrastructure. Here is a snapshot summary of what lies ahead.

CORONAVIRUS RELIEF LEGISLATION — PHASE 4

The next installment of COVID-19 legislation is likely to come with a price tag of over $1 trillion in economic support for individuals and businesses. With the pandemic’s continuing economic disruption and the resurgence of COVID-19 cases in several states, both parties acknowledge that legislative action is imminent, but the devil is in the details.

Federal Pandemic Unemployment Compensation

by Mary Beth Stanton

The Federal Pandemic Unemployment Compensation (FPUC) expires on July 31, and as many as 25 million unemployed Americans are receiving the $600 federal supplement to state unemployment aid. The House-passed Heroes Act extends the program through January 2021 and enjoys the support of Senate Democratic leadership. Senate Republicans and the Administration want to scale back the benefit and potentially pair it with a requirement to return to work. Earlier this summer, it seemed as if a FPUC extension was unlikely, but as the number of COVID-19 cases spike and the economic fallout continues, the probability of an extension is increasingly likely. Negotiators will need to determine whether to extend, extend and amend, or let the program expire.

State and Local Funding

by Mary Beth Stanton

State and local governments are leading the response to the COVID-19 pandemic. Governors and locally elected officials are implementing stay at home orders and public health strategies to help mitigate the pandemic at great cost to their state and local budgets. States remain concerned budget shortfalls will result in reductions of critical government services and employees. The House-passed Heroes Act provides $915 billion to state and local governments to use federal funding to maintain critical services and keep government workers on the payroll. The CARES Act signed into law in March provided some relief to states, but governors are asking for more as every state is now impacted. The CARES Act included $90 billion for K-12 school districts and universities, and many congressional Republicans acknowledge the need for more funding for schools and universities to reopen. Less clear is how they will propose such aid to be structured, including whether it will be conditioned on schools reopening. While federal investment in the states is very much on the table and becoming more of a priority for both parties, there were reports over the weekend the White House is trying to block billions of dollars to states for testing and contact tracing.

Liability and Safe Harbor

by Landon Stropko

Senate Republicans are expected to propose a safe harbor from COVID-19 lawsuits to everyone from businesses and health care providers to K-12 school districts and universities. Senate Majority Leader Mitch McConnell (R-KY) continues to call liability protection a “must” in the next COVID-19 package. The safe harbor is expected to extend from December 2019 through 2024 and still allow COVID-19 cases involving cases of gross negligence or willful misconduct. The Trump Administration and Leader McConnell are exchanging proposals to resolve other crucial details, including what COVID-19 standards entities will need to follow to qualify for the safe harbor. While House Speaker Nancy Pelosi (D-CA) is critical of the proposal, she is not dismissing it completely, and the proposal is likely to pick up some support among moderate House Democrats. Speaker Pelosi continues to push for new Occupational Safety and Health Administration (OSHA) regulations imposing requirements on employers to protect workers from COVID-19 exposure, which is failing to garner support from Republicans.

Payment Protection Program

by Quincy Enoch

The Payment Protection Program (PPP) was extended by unanimous consent in early July, moving the application deadline to August 8. Congress will consider additional PPP provisions as part of the next package, including further extension of the program, allowing small businesses that received PPP loans to obtain a second loan, allowances for a longer-term loan, and reducing the employee requirements for eligibility.

Whichever direction the program goes, many in Congress believe changes to the program’s framework are needed. The news of larger companies receiving PPP loans is giving some policymakers pause. Many believe the program needs to be retooled to ensure it is helping the businesses it was intended to help. Additionally, the mechanics of loan forgiveness are presenting problems to many smaller businesses. While the Small Business Administration (SBA) reduced the burden on borrowers with smaller loans, some policymakers would like to see the process further streamlined.

Taxes

by Carolyn Coda

As White House National Economic Council head Larry Kudlow recently said, the next relief bill is potentially a “grab bag” of tax provisions. Republicans, Democrats, and the White House are staking out their tax priorities. The House-passed HEROES Act includes an expansion of the Employee Retention Tax Credit (ERTC) and new paid sick and family leave credits, in addition to non-COVID provisions like the repeal of the State and Local Tax (SALT). Republicans are showing some receptiveness to expanding the ERTC, potentially making it an area of bipartisan compromise.

The White House remains consistent with its list of priorities, which includes a payroll tax and capital gains holidays. While the final deal on tax provisions remains unclear, leaders on both sides of the aisle are acknowledging the challenges they face in inking a deal on this portion of a relief package, particularly due to baseline differences between the parties on the size and the scope of provisions utilizing the tax code to provide relief during the pandemic.

APPROPRIATIONS

by Mark Friedmann

The House Appropriations Committee completed their markups of the fiscal year (FY) 2021 funding bills last week and is set to consider the first minibus package on the floor this week. The first minibus package includes: (1) State and Foreign Operations; (2) Agriculture and Rural Development; (3) Interior and Environment; and (4) Military Construction and Veterans Affairs, which are considered the least contentious of the 12 bills. The House funding bills included a series of partisan hang-ups, including restrictions on the Administration’s ability to reprogram any funding towards the president’s border wall and a provision that would all but strip the Department of Homeland Security’s reprogramming authority without deliberate congressional consent. On the other side of the Capitol, the Senate has yet to address the FY 2021 funding bills, including setting dates for committee markups. With the end of the fiscal year on September 30 and a high-stakes election in November, Congress will once again lean on a continuing resolution to fund the federal government through the end of December.

POLICING REFORM

by Nicole Venable

The Senate left for its July 4 recess without finding consensus on a policing reform bill. Two proposals are on the table: the House-passed H.R. 7120, the George Floyd Justice in Policing Act, and Senator Tim Scott’s (R-SC) JUSTICE Act. The two proposals remain far apart on scope and overall approach to police reform. Many believe Congress lacks the political will to negotiate further on this issue before the election. So, is the issue effectively stalled until after the election? Perhaps, but there remains significant pressure for Congress to act given continuing protests across the country. Further, a number of stakeholder groups — including many corporations and trade associations — are strongly encouraging Congress to pass a bill.

House Democrats remain committed, and members of the Congressional Black Caucus (CBC) are seeking to address systemic racism more holistically by introducing a revamped “Jobs and Justice Act.” This package of bills will be comprised of existing bills addressing issues ranging from comprehensive criminal justice reform to policies promoting economic empowerment. Originally introduced in 2018, CBC Chair Karen Bass (D-CA) hopes to introduce an updated package before the August recess.

TELEHEALTH

by Annabell McWherter

There is growing pressure to make the temporary waiver of telehealth regulations permanent (e.g., allowing providers to bill for telehealth services as if provided in person, including video and audio-only telehealth services; waiving geographical site restrictions; providing interstate licensure flexibility for telehealth; and providing more flexibility under HIPAA). Last month, both the Senate Committee on Health, Education, Labor and Pensions (HELP) and the House Energy and Commerce Committee held hearings on telehealth and the COVID-19 response. Lawmakers and hearing witnesses largely agreed the relaxation of restrictions on telehealth resulted in the expansion of access to care for both Medicare and Medicaid beneficiaries and led to improved health outcomes. As a result, committees of jurisdiction are expected to continue holding hearings and roundtables to discuss a path forward on telehealth as lawmakers on both sides of the political aisle contemplate proposals for redefining the future of health care.

INFRASTRUCTURE

by Tim Martin

The current surface transportation bill, Fixing America’s Surface Transportation (FAST) Act of 2015, expires on September 30, 2020. As this deadline quickly approaches, the reauthorization process is slowing because of policy disagreements on scope, funding levels, and how to pay for it.

On July 1, House Democrats passed a surface transportation bill wrapped inside the expansive climate-focused infrastructure package H.R. 2, the Moving Forward Act, which includes $1.5 trillion in funding. With the Senate unlikely to take up this legislation and the White House indicating it would veto the bill, attention is turning to the Senate and S. 2302, the America’s Transportation Infrastructure Act. Shepherded by Senate Environment and Public Works Committee Chair Senator John Barrasso (R-WY), the bill was approved unanimously in committee nearly a year ago, but three additional Senate committees — Banking, Finance, and Commerce — have partial jurisdiction and must weigh in to determine the exact cost of the bill and how to potentially pay for it. The president supports the Barrasso legislation.

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