March: Breaking All the Records
News reports talk about the COVID-19 bills in phases, and it’s a helpful way to delineate what has been covered in each round of funding.
3/6 Phase One: H.R. 6074 This bill didn’t get as much attention because it was at the very beginning of the crisis. This emergency funding was designated to treat and prevent the spread of COVID-19 and significant portions of the funding went to the Department of Health and Human Services (HHS) to develop vaccines and testing kits for local communities, to state and local health departments to be used for staffing increases and additional laboratory equipment and to the federal government to aid in the international containment of the virus. This passed overwhelmingly, and Congress almost immediately moved into planning the next phase of legislation.
Phase 1 Cost: $8.3 billion
3/18 Phase 2: H.R. 6201 This bill was focused on alleviating immediate concerns over leave due to COVID-19. HR 6201 made significant changes to FMLA and to what employers are required to provide in paid leave to their employees, effective April 2 through December 31, 2020. You can read NPMA’s full breakdown of HR 6201 here.
Phase 2 Cost: $104 billion
3/27 Phase 3: The CARES Act This bill was the most wide-ranging of the phases, with support for specific industries and small businesses as well as checks sent directly to individuals. You can read NPMA’s full breakdown of The CARES Act here.
Phase 3 Cost: $2 trillion
March Spending: The total price tag of Phase 1, 2, and 3
$2,112,300,000,000
If this number seems so big it’s almost imaginary, you’re not alone in thinking that. Collectively, these funding packages are exponentially beyond any disaster aid in the history of our Congress. (For context, the 9/11 Victims fund was approximately $8.3 billion and TARP was authorized for $700 billion.)
These packages are remarkable not only for their cost but for the speed and the (relative) lack of bipartisan tomfoolery in their passage. These packages sped through Congress in a way I can’t ever remember seeing before. Once Congress understood the impacts to individuals and the economy, they stepped up to the plate and got packages across the finish line incredibly quickly.
That’s not to say these bills are perfect. While I may not agree with Sen. Ben Sasse’s description of The CARES Act as “a crap sandwich” it isn’t surprising that such a speedily created package will have rough edges, unnecessary spending, inconsistent drafting, and probable implications beyond what was intended. It will be some time before all of what was included will be fully understood.
April: What to Expect When You’re Expecting (another Stimulus)
With so many rumors going around DC about what the next month might hold, it is useful to separate what we know for a fact from what could or might or should happen.
The Facts:
Oversight Fight: There will be a showdown between the White House and Congress over the oversight aspects of The CARES Act, as Congress believes the legislative text gives them grounds to oversee some of the spendings under the bill and Trump has stated he intends to ignore those provisions.
(Another) Stimulus?: Discussions on whether another stimulus is needed and if so what would be included are happening at the time of writing. This is breaking down along partisan lines, surprising literally no one.
The Speculation
Oversight Fight: The CARES Act spends an unprecedented amount of money and Congress was very keen to exercise some oversight over how and when the money is being allocated. That interest was bipartisan, but the Democrats have been particularly outspoken about monitoring given their antagonistic relationship with the Trump Administration. Trump has stated publicly several times he views any oversight by Congress over the COVID-19 spending as unconstitutional, calling the provisions “impermissible forms of congressional aggrandizement with respect to the execution of the laws.”
This is setting up a major conflict with Congress, particularly the Democrats. Speaker Pelosi announced the formation of a special bipartisan House committee to oversee the spending within The CARES Act. While many Democrats may want to serve, this puts House Republicans in an awkward position. Do they agree with the President and therefore hesitate to nominate anyone to the committee for fear of breaking with him? Or do they toe the line of the legislation and directly contradict what the President wants? Will they nominate pro-Trump members or more moderate evenhanded ones? This will be a battle to watch.
(Another?) Stimulus: Last week there seemed to be a general bipartisan and bicameral consensus another stimulus would be needed, yet this week we see that discussion splitting along partisan lines in Congress, with the President coming down on the side of House Democrats when talking about infrastructure spending as part of the package. There would likely be daylight between their proposals as the Dems have indicated they want a package more aligned with the Green New Deal in terms of climate focus and union support. Their package is estimated at $760 billion and would be only one item among many in this next stimulus.
The Democrats are eager to get started on another stimulus bill, and will likely use their wish list from a few weeks ago as a starting point; you can read NPMA’s breakdown of that list here. Pelosi has also mentioned wanting to include a partial overhaul of the 2017 Tax Law in addition to the many other items listed. Democratic members have indicated they anticipate this next package costing another $2 trillion.
The President has tweeted that he supports the inclusion of infrastructure and actually goes above the Democratic proposal, advocating for $2 trillion just for infrastructure. It will be interesting to see if his support will sway some Congressional Republicans.
Republicans have come out this week against committing to another stimulus right now. McConnell stated that it’s too early to think of that, and other Republicans have joined in. However, early reports indicate small businesses may face a wait of weeks or more in getting their funding due to unclear guidance on how loans are being processed and jobless claims continue to rise astronomically every week, so I anticipate there will be a lot of pressure on Congress to act
Congress comes back into session on April 20th and given current trends, I would bet on another stimulus in late April or early May.
|
Other Political News Worth Noting
The Democrats have postponed their Presidential nominating convention until August (originally scheduled for mid-July).
The Administration will not reopen the health care exchanges to help those affected by COVID-19 get coverage.
Dr. Fauci is now getting a security detail due to threats against him online.
|
Canada
3.26 Canada & COVID: C-13 Becomes Law
Wednesday, March 25 Bill C-13 became law in Canada after extensive last-minute negotiations. The bill provides funding for individuals and businesses hurt by COVID-19 and expands the government’s ability to support those affected in the future.
There were multiple concerns that this package drastically expanded the power of the government and so became very contentious this week. Several problematic proposals were changed at the 11th hour to allow passage, including the removal of a provision that would have let the finance minister raise taxes without parliamentary approval.
Included are several important provisions on oversight and spending:
- Cabinet ministers can spend any amount of money they deem needed in a public health emergency through Sept. 30, 2020.
- The Finance Minister will begin biweekly reporting to Parliament starting next week to provide a status update on how the funding is being used.
Support for Individuals: Last week two different emergency benefits were announced and through this bill have puttied together and renamed The Canada Emergency Response Benefit (CERB).
Under the program, individuals can receive up to $2,000 a month for the next four months, with an online portal up for applications on or about April 6th, which checks received within 10 days of applying. This benefit will apply to any Canadian out of work due to reasons related to COVID-19, including for sickness, quarantine, caregiving, staying home to take care of children, furloughed workers, those who are still technically employed but not receiving income. The benefit would cover wage-earners, contract workers, self-employed and gig industry individuals. This would apply whether an individual is eligible for unemployment insurance or not. This is a taxable benefit.
Support for Small & Medium Sized Businesses
Formed earlier in March this year, the Business Credit Availability Program (BCAP) will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses. This program will allow BDC and EDC to work with private lenders and help individual businesses. Companies interested in taking part can get more information here and can contact their lending institutions to get started.
C-13 also provides eligible small employers a temporary wage subsidy for a period of three months (March 18, 2020 through June 19, 2020) based on a formula within the legislation.
Click here for the latest information on Canadian Government actions surrounding COVID-19.
|
