Next COVID-19 Package
The House and Senate will return to session next week with the expectation that discussions will begin in earnest on the next COVID-19 response legislation. We expect that Senate Majority Leader Mitch McConnell (R-KY) will share the outline of his legislative proposal with the Senate Republican conference next week, with the goal of trying to secure support from his colleagues. Leader McConnell’s objective is a package tailored to COVID-19 related issues, with a specific focus on providing federal resources for children, employment growth, small business assistance, health care resources, and liability protections.
House Minority Leader Kevin McCarthy (R-CA) has spoken multiple times over the last couple of days to Leader McConnell, ensuring that House Republicans are in sync with the Senate’s efforts. Leaders McConnell and McCarthy also have had direct contact with the administration, as well as with Senate chairmen and House ranking members. It is expected that White House Chief of Staff, Mark Meadows, will play a major role in future negations as well as Treasury Secretary Steven Mnuchin.
We anticipate that, unlike previous COVID bills that received unanimous votes, the final vote on this package may lose support from some more hard-lined members—on both sides of the aisle. Members who are likely to support an overall package are more likely to have their priorities considered during negotiations.
Here are just a few of the issues that may be discussed in the coming weeks.
- Liability Protections – Leader McConnell and Sen. John Cornyn (R-TX) continue to keep a close hold on their proposed language. There is an expectation that the initial proposal may have liability protections for several years for businesses, schools, and non-profits that attempt to comply with COVID-19 related health guidance.
- Individual Stimulus Payments – Several Republicans and Democrats have expressed support for additional payments to individuals. There may be an effort to limit future payments to a lower income threshold than was in the original CARES Act.
- State and Local Funding – State and local leaders have called for between $500 billion and $1 trillion in new federal assistance.
- Health Care Funding – The focus could be on expanding the use of telehealth and additional funding for testing and health providers.
- School Aid – Federal funding may be provided for schools that reopen and adhere to the Centers for Disease Control and Prevention (CDC) guidelines.
- Small Business Assistance – In addition to including more resources for the Paycheck Protection Program (PPP), there may be efforts to repurpose existing PPP funds with the goal of helping more underserved communities. There will also likely be debate about potentially increasing loan forgiveness for previous PPP borrowers.
- Tax Incentives – Employee Retention Tax Credit (ERTC) modifications, business deduction of personal protection equipment, capital gains holiday, and accelerated tax breaks are priorities for some members and the administration.
- Unemployment Benefits / Return to Work Bonus / Rehiring Tax Credit / Hazard Pay
- Direct Assistance for Certain Hardest-Hit Industries
- Additional Food Security Assistance
The House is expected to spend the first half of next week on the National Defense Authorization Act (NDAA). Following consideration of the NDAA, the House is then expected to consider the Great American Outdoors Act, which has cleared the Senate. At the end of the week, the House will vote on the first of two appropriations packages. The first minibus package will consist of Agriculture, Interior-Environment, Military Construction-Veterans Affairs, and State-Foreign Operations funding bills.
The following week, the House is also expected to process a second minibus appropriations package, in addition to considering H.R. 7575, the Water Resources Development Act. Finally, the House is expected to stay in session in order to pass any final negotiated economic recovery package, assuming progress in negotiations.
Senate Filibuster Rule
As we mentioned in our previous memo, momentum is growing among the Democrats to change the Senate’s legislative filibuster rule. This week, former Vice President Joe Biden signaled his potential endorsement of changing the current 60-vote threshold by stating, “It’s going to depend on how obstreperous they [Republicans] become.”
Senate Democratic Whip Dick Durbin (D-IL) has secured Biden’s and Senate Majority Leader Schumer’s (D-NY) pledge to put immigration reform first in the cue if Democrats take control of the Senate and White House. This may be the first test-case for those favoring the elimination of the filibuster.