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BPAA Federal Policy Update - May 8, 2020

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COVID-19 & SMALL BUSINESS UPDATE

  • Pelosi to lay down multitrillion-dollar marker with new coronavirus package Speaker Nancy Pelosi is speeding to finalize a multitrillion-dollar coronavirus relief package, hoping to put the bill on the House floor next week — a timeline that even some senior Democrats dismiss as unlikely. Pelosi had hoped to release the draft bill — which some Democrats worry could cost upward of $2 trillion — on Friday.
    • Democrats are debating a host of proposals for the next round of aid, including extending jobless benefits and providing more cash payments to individuals. They’re also arguing over whether to pass a Democrats-only measure before starting talks with the GOP-controlled Senate and White House. Some moderates are showing an openness to Republican ideas such as tax breaks and liability protection for businesses.
    • The swing-district Democrats, who are key to the party’s House majority, are influential with Speaker Nancy Pelosi (D-Calif.), who said yesterday she’s not drawing hard lines on what the next relief package must include. She said House Democrats could present and vote on their plan as soon as next week, while also describing it as a starting point for negotiations with President Donald Trump’s administration and Senate Republicans.
    • But that timeline is slipping as members from all corners of the caucus pressure leadership to stuff the ballooning bill with their priorities, many of which were left out of the previous four aid packages negotiated with Republicans. Senior Democratic aides said Pelosi and the committees will be working through the weekend on the package. Speaking to members on a caucus call Thursday afternoon, Pelosi and House Majority Leader Steny Hoyer (D-Md.) said a vote next week is possible but not certain.
    • Still, several Democrats have privately complained they have no idea what will be in the final legislation, waiting like most of Washington for when Pelosi releases the text. And Pelosi said Thursday she isn’t negotiating with Republicans or the White House at this point as she builds a consensus within her own caucus first. Senior aides say much of the caucus wants the House to proceed first to put out a marker, though the idea has exacerbated concern among some moderate Democrats that the bill could look too much like a costly wishlist with no chance of being signed into law.
    • Some Democrats also fear they’re being seen as not doing enough during the pandemic, spooked by recent internal polling in battleground districts last month that found nearly a third of respondents said they couldn’t rate the job their member of Congress is doing to address the coronavirus. Read the full article at Politico

 

  • Senate GOP blocks Democratic oversight bill for small-business aid Sen. Marco Rubio (R-Fla.), the chairman of the Senate Small Business and Entrepreneurship Committee, blocked an attempt by Democrats to pass a bill that would require the Trump administration to report new details on how small-business aid is being dispersed amid the coronavirus pandemic. Rubio, speaking from the Senate floor, noted that some of the information Democrats have requested wasn't required on the application for federal funding and that Congress should work with the Small Business Administration (SBA) to provide details on its own.He added that lawmakers should work with the SBA so administration officials are not "overburdened" by reporting requirements from Congress, warning that added requirements could have "unintended consequences."
    • Democrats tried to pass a bill that would have created new oversight requirements for the Paycheck Protection Program and Economic Injury Disaster Loans. Read the full article at The Hill

 

  • 9 states seek $36B in federal advances for unemployment claims SACRAMENTO, Calif. — Nine states have told the Department of Labor they plan to ask for $36 billion in federal advances to cover the astronomical cost of unemployment payouts amid the coronavirus pandemic, according to new information provided to POLITICO Tuesday night by federal officials.
    • Illinois, which had fiscal problems before the coronavirus, tops the list with an $11 billion request in May and June.
    • California, the first state to borrow, plans to seek the next-highest amount over the same two months: $8 billion.
    • Texas will ask for advances totaling $6.4 billion in May, June and July and New York will ask for $4.4 billion in the same three months.
    • Connecticut, Hawaii, Massachusetts, Ohio and West Virginia have also signaled an intent to borrow between May and July to fund their unemployment systems. Some of the states, like Illinois and California, only requested advances for May and June.
    • There is no approval process for the advances, a department spokesperson said. States notify the Departments of Labor and Treasury of their needs, the spokesperson said, and the Department of Labor certifies those amounts to the Treasury Department. States are able to draw down advances as they need them, but won't necessarily end up using the full amounts. Read the full article at Politico

 

  • U.S. unemployment hit 14.7 percent in April amid the coronavirus pandemic, the highest unemployment rate since the Great Depression. The Bureau of Labor Statistics (BLS) reported Friday that the country lost 20.5 million jobs in April, “with particularly heavy job losses in leisure and hospitality.” The 10.3-point increase the unemployment rate from March to April is the largest ever recorded, and marks the first time in over a decade that unemployment has hit double digits. The previous worst jobless rate since the Great Depression, when unemployment hit 25 percent, was 10.8 percent in 1982. The labor force participation rate hit its lowest point since 1973, falling to 60.2 percent. Among different industries, employment in leisure and hospitality was nearly cut in half, falling by 7.7 million. Despite the virus, the healthcare industry lost 1.4 million jobs, primarily among dentists and private practitioners. One bright spot in the report showed that of those unemployed, 18.1 million — 78 percent — said that their layoff was temporary. But BLS revealed at the conclusion of its report that “the overall unemployment rate would have been almost 5 percentage points higher than reported” had individuals who were classified as employed, but who were not working, been included. On Thursday, the Labor Department said that over 33 million Americans have applied for unemployment benefits since mid-March. Read the full article at The National Review

 

  • Senators introduce bill to allow tax deductions for forgiven PPP loans A bipartisan group of lawmakers introduced legislation Wednesday to enable small businesses to deduct their expenses even if they have received a loan from the federal government’s Paycheck Protection Program that was later forgiven. The U.S. Small Business Administration’s Paycheck Protection Program was included as part of the CARES Act that Congress passed in April in response to the novel coronavirus pandemic. It aimed to provide funding to small businesses, giving them SBA-backed loans that the federal government would ultimately forgive as long as they kept their employees on the payroll for eight weeks.
    • Grassley, Wyden, along with Sen. John Cornyn, R-Texas, Marco Rubio, R-Fla., and Tom Carper, D-Del., introduced the Small Business Expense Protection Act, which would clarify the PPP so small businesses could still deduct the expenses they have paid with a forgiven PPP loan from their taxes. Under the bill, the receipt and forgiveness of coronavirus assistance through the PPP would not affect the deductibility of ordinary business expenses. He and the other senators noted that the goal of the PPP was to maximize small businesses’ ability to maintain liquidity, retain their employees and recover from the pandemic as soon as possible. The Small Business Expense Protection Act is supported by the American Institute of CPAs. The AICPA expressed its support in a letter Wednesday thanking the lawmakers.
    • According to the Small Business Administration, more than 2 million loans totaling over $175 billion have been made to small businesses since the second round of PPP loan processing began on April 27, surpassing the number of all loans made in the first round of PPP loans. The average loan size in Round 2 was estimated at $79,000, and almost 500,000 of the loans were made by lenders with less than $1 billion in assets and non-banks. Since this program started, the SBA has processed more than 3.8 million loans, providing more than half a trillion dollars of economic support. Read the full article at Accounting Today

 

  • White House considers measures to boost economy without Congress WASHINGTON — The White House is considering another delay in the deadline to file federal taxes, along with additional measures aimed at providing economic relief for Americans that can be adopted without legislation from Congress, two people familiar with the discussions said. Tax Day has already been pushed to July 15, but it could be extended further to Sept. 15 or as late as Dec. 15, these people said, although administration officials stressed that no decision has been made. Another proposal under consideration is a moratorium on new federal regulations, and White House officials are looking into whether the president can take executive action to protect businesses from lawsuits if employees become infected with the coronavirus while on the job. Lawmakers have discussed some liability protection, but administration officials see the issue as urgent. Read the full article at NBC News

 

  • Politico -- PPP Pressure A small business lobbying group is urging Congress to reverse an IRS decision on forgivable Covid-19 relief loan expenses and provide straight cash to small businesses. The IRS said earlier this month that expenses leading to PPP loan forgiveness don’t trigger deductions. That guidance triggered widespread outrage, however, from critics who believe the government should clearly be throwing as much money at small businesses as it can during the crisis. Earlier this week, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.), along with House Ways and Means Committee Chairman Richard Neal (D-Mass.), wrote Treasury Secretary Steven Mnuchin requesting a reversal of the notice. Sens. John Cornyn (R-Texas), Wyden, Grassley, and others also introduced a bill (S.3612) to roll back the IRS guidance. Wyden has also introduced a bill (S. 3549) to provide rebates to businesses with up to $1 million in gross receipts and up to 50 employees, to be distributed by the IRS. While Rep. Madeleine Dean (D-Pa.) introduced companion legislation (HR 6619), neither has Republican cosponsors so far. Over 33 million Americans lost their job during the pandemic. 77 percent believe they’ll get it back, Post-Ipsos poll finds.

 

  • Senate GOP blocks Democratic oversight bill for small-business aid Sen. Marco Rubio (R-Fla.), the chairman of the Senate Small Business and Entrepreneurship Committee, blocked an attempt by Democrats to pass a bill that would require the Trump administration to report new details on how small-business aid is being dispersed amid the coronavirus pandemic. Rubio, speaking from the Senate floor, noted that some of the information Democrats have requested wasn't required on the application for federal funding and that Congress should work with the Small Business Administration (SBA) to provide details on its own.He added that lawmakers should work with the SBA so administration officials are not "overburdened" by reporting requirements from Congress, warning that added requirements could have "unintended consequences."
    • Democrats tried to pass a bill that would have created new oversight requirements for the Paycheck Protection Program and Economic Injury Disaster Loans. Read the full article at The Hill

 

Budget & Appropriations Update

  • Deadline Approaches for First Drafts of House Spending Bills: Some House appropriators are wrapping up a first draft of their fiscal 2021 spending bills today, though plenty of issues are still up in the air due to the uncertainty surrounding the coronavirus response, according to a key lawmaker. One thing is clear about House Democratic funding priorities: They won’t offer any money for President Donald Trump’s border wall. “I’m not funding that,” Rep. Lucille Roybal-Allard (D-Calif.), chairwoman of the House Appropriations Homeland Security Subcommittee, said in an interview Thursday. At least some House Appropriations subcommittee leaders were asked to send in draft legislation by Friday so that House Democratic leaders could review it, Roybal-Allard said. It’s a sign appropriators have managed to make significant progress on funding legislation while mostly working from home over the last month.
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