May Policy Issues Overview

May 4, 2020

QUICK FIX

— Half of Congress is back this week, even as local officials say coronavirus cases in Washington have yet to peak. The Senate resumes business today after an extended recess due to the coronavirus, and Majority Leader Mitch McConnell is looking to advance judicial and executive branch nominees. In-person hearings are also starting back up this month: President Donald Trump’s pick for director of national intelligence is set to appear before the Senate Intelligence Committee on Tuesday, while a 5G spectrum fight that’s divided the Trump Cabinet gets a hearing in front of the Senate Armed Services Committee on Wednesday. The House is not planning to come back until next week, but an Appropriations subcommittee will still hold an in-person hearing Wednesday on coronavirus response (though the Trump administration has blocked Dr. Anthony Fauci from testifying).

 

— Another coronavirus relief package is expected within weeks, as lawmakers continue to find ways to help struggling Americans despite a swelling federal deficit. House Speaker Nancy Pelosi has said states and local governments may need as much as $1 trillion in additional federal relief to keep economies afloat. But the administration seems to be taking a wait-and-see approach on more stimulus: “There may well be additional legislation. There’s kind of a pause period right now,” White House economic adviser Larry Kudlow said Sunday on CNN. “We'll wait and see. … We have to execute the last package.” Updated employment numbers coming soon could change the administration’s tune. More than 30.3 million unemployment claims have been filed in just six weeks as the coronavirus batters the economy. The continuing damage to the labor market will be clearer Friday, when the Department of Labor releases the jobs report for the month of April.

LOOKING AHEAD TO THE NEXT STIMULUS

Workplace health insurance the latest bailout target: An unusual coalition of big business and labor interests is rallying around a proposal to bail out employer health plans in the wake of staggering losses to the insurance industry amid the pandemic. With tens of millions of people rapidly losing their jobs, the idea of tying coverage to the workplace is facing its biggest test yet, and some worry that a surge in uninsured Americans could revive the push for “Medicare for All.” The powerful interests have strong economic motives to keep the current system of employer-based care, and are rallying behind a Democratic effort to subsidize temporary extensions of newly unemployed Americans’ workplace health plans in Congress’ next coronavirus rescue package. — Susannah Luthi

 

Loan reckoning: A massive small-business lending program designed to avert layoffs during the pandemic will run out of funding for a second time by early May. That will force Congress to consider whether to replenish the so-called Paycheck Protection Program, which quickly used up the $670 billion lawmakers allocated, or look for other ways to support workers. The small-business loans have proven to be hugely popular, but the system for doling them out has been saddled with technical problems, lender confusion and concerns of inequity after several large corporations secured tens of millions of dollars in aid. — Mark McQuillan

 

Billions more for the Pentagon? Ellen Lord, the department's top acquisition official, said months-long delays to major weapons programs could cost billions and that the Pentagon would ask Congress for more money to fill the gap. It's a move that's sure to raise eyebrows among skeptical lawmakers who've argued for years that the Pentagon's budget is already too large. The Defense Department already received an extra $10.5 billion to bolster its coronavirus response in March. The replenishment of more than $300 billion in small-business loans in the fourth round of aid last month will likely aid some smaller defense companies, but defense industry groups have said additional assistance is needed to keep contractors solvent through the pandemic. — Connor O'Brien

 

Bipartisan support for more checks for farmers: The Agriculture Department’s farm stimulus programs will start pumping out billions of dollars to producers this month while lawmakers consider a second, potentially even bigger infusion of funding for the struggling sector. There’s bipartisan support for adding another $50 billion to the USDA’s arsenal, but also a debate over whether Congress should impose stricter guidelines on how the money is spent. — Ryan McCrimmon

 

More tax breaks coming? With all eyes on whether Congress will enact a fourth economic stimulus package, K Street, Capitol Hill and the White House are mulling possible tax provisions. Trump is advocating for more payroll tax cuts, while Democrats and Republicans on Capitol Hill seem more interested in tax breaks targeted to health care workers and first responders. The hard-hit retail and restaurant industries may also seek to add to the tax breaks they got in the last rescue package, the CARES Act. Another round of direct payments to individuals is also a possibility. — Toby Eckert

 

Eyeing worker protections: Worker safety advocates want the next coronavirus aid package to include mandatory safety protections for workers, and Democrats have introduced legislation that would require the Occupational Safety and Health Administration to issue within seven days an emergency Covid-19 standard. But the business community is opposed to mandatory rules, and such a requirement will more than likely face opposition from Republicans. Democrats also will likely demand hazard pay for emergency and health workers. Pelosi said last week that House Education and Labor Chairman Bobby Scott (D-Va.) is working with Senate HELP ranking member Patty Murray (D-Wash.) “to see if [Republicans] will have a go on that.” — Rebecca Rainey

 

More money for broadband: Democrats say they want at least $2 billion to help close the so-called digital homework gap, with subsidy money going to fund Wi-Fi hotspots to help students stuck at home. Republicans are treading cautiously and say Congress may want to pair any funding with telecom industry regulatory relief. Meanwhile, FCC Chairman Ajit Pai says Congress needs to find money to implement recent laws requiring the agency to come up with more accurate broadband data and root out Chinese telecom gear from Huawei and ZTE, which U.S. national security officials deem a risk. Expect shared Republican and Democratic interest in funding these