Congress, Administration Reach $484 Billion Deal for Phase 3.5

Today, congressional Democrats and Republicans reached a $484 billion deal with the Trump Administration for "Phase 3.5" of the coronavirus response to, in part, replenish the depleted Paycheck Protection Program (PPP). The proposal passed the Senate this afternoon and is expected to pass the House as soon as Thursday. The bill also includes priorities such as hospital funding and coronavirus testing. The deal does not, however, include aid for state and local governments. Additional provisions included in the package are outlined below. Unfortunately, lawmakers may have to revisit the issue of PPP funding sooner than anticipated as the additional funding in Phase 3.5 for the program is estimated to be fully allocated in a matter of days.

While Congress continues to develop legislation to respond to the pandemic facing the country, it is also considering how to reform its own practices to conduct oversight and write legislation in a new environment of social distancing. House Majority Leader Steny Hoyer (D-MD) sent a letter today to the Committee on House Administration and the Committee on Rules, urging consideration of his recommendations to enable remote voting and committee work. He reiterated his preference for voting by the use of video-conferencing technology, emphasizing the need to update House rules to explicitly allow remote committee proceedings or change the rules to define "present" in a way that allows for members' participation through an approved video-conferencing platform. 

The House vote on Thursday could also be used to contemplate the allowance of proxy voting, as enacting this rule would require passage of a House resolution. However, proxy voting would not be implemented prior to a vote on the Phase 3.5 package, and all House members who can safely return to Washington are expected to do so by Thursday to vote.

As public officials at all levels of government continue to escalate their responses to the pandemic, the latest actions and developments may be found below. Akin Gump will continue to provide regular policy developments related to COVID-19.

Summary: $484 billion Phase 3.5 Package

Paycheck Protection Program Increase Act of 2020:

  • Provides an additional $310 billion for the PPP, including $30 billion that must be set aside for PPP loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion, and $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions and Credit Unions with assets less than $10 billion.
  • Provides an additional $10 billion for the Emergency Economic Injury Disaster (EIDL) Grants.
  • Allows agricultural enterprises with fewer than 500 employees to receive EIDL grants and loans.
  • Provides an additional $2.1 billion for the Salaries and Expenses account.
  • Provides an additional $50 billion for the Disaster Loans Program Account.
  • Provides an additional $10 billion for Emergency EIDL Grants.

Department of Health and Human Services (HHS) Provisions:

  • Provides $75 billion for reimbursement to hospitals and healthcare providers to support the need for COVID-19 related expenses and lost revenue.
  • Provides $25 billion to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID-19 tests.
  • Includes $6 million for HHS Office of Inspector General for oversight activities.
  • Requires plan from States, localities, territories and tribes on how resources will be used for testing and easing COVID-19 community mitigation policies.
  • Requires strategic plan related to providing assistance to States for testing and increasing testing capacity.

States Take First Steps to Reopen  

A number of states have announced initials steps to reopen their economies in response to the three-phase guidelines issued by the Administration last week: 

  • Florida: Governor Ron DeSantis reopened beaches in parts of the state for "essential activities" on April 17. The state's stay-at-home order currently expires April 30.
  • Georgia: Governor Brian Kemp announced on April 20 that the state would allow gyms, hair and nail salons, massage therapist, bowling alleys and tattoo parlors to reopen on April 24 as long as owners follow strict social-distancing and hygiene requirements. Elective medical procedures would also resume. On April 27, movie theaters may resume selling tickets and restaurants limited to takeout orders could return to limited dine-in service.
  • Idaho: Governor Brad Little amended the "Order to Self-Isolate" on April 15 to allow certain business and facilities to reopen for curbside pickup, drive-in and drive-thru service and for mailed or delivery services. The order is still currently set to expire on April 30. The governor stated some nonessential businesses may be able to reopen on May 1, but no plan has currently been released.
  • Minnesota: Governor Tim Walz allowed certain recreational activities such as golfing, hunting, boating and hiking to resume on April 18. The state's stay-at-home order expires May 4.
  • Mississippi: Governor Tate Reeves stated that once the state's stay-at-home order expires on April 27, he plans to allow businesses to reopen. Schools will remain closed through the rest of the school year.
  • Oklahoma: Governor Kevin Stitt implemented a "safer-at-home" order which recommends people over age 65 stay at home until May 6. Previously suspended elective surgeries may resume on April 24 and other non-essential businesses may open on May 1.
  • Pennsylvania: Governor Tom Wolf announced on April 20 that once the state's stay-at-home order expires on May 8, he plans to ease restrictions on construction operations, curbside alcohol pickup and vehicle sales.
  • South Carolina: Governor Henry McMaster issued a "state of emergency" order closing all nonessential businesses through April 27. Gov. McHenry later announced that some public beaches and retail stores would be allowed to reopen beginning April 20. Public school are currently closed through April 30.
  • Tennessee: Governor Bill Lee announced he would not extend the state's stay-at-home order past April 30 and state parks will begin to reopen before then.
  • Texas: Governor Greg Abbot announced on April 21 that the state would allow retailers to sell items for curbside pickup, resume elective surgeries and begin reopening state parks beginning on April 24. The state's stay-at-home order expires on April 30.
  • Utah: Governor Gary Herbert announced that once the state's order expires on May 1, he plans to begin to reopen the state in three phases, beginning with sit-down dining, gym facilities and elective surgeries.
  • Vermont: Governor Phil Scott announced on April 17 that certain "low contact" businesses would begin to reopen with a two-person staff beginning April 20. The state's stay-at-home order ends May 15.

White House Coronavirus Task Force Briefing Highlights

On Tuesday, April 21, the White House Coronavirus Task Force conducted a briefing from the White House Press Briefing Room. Highlights of the discussion included:

  • President Donald Trump began the press briefing by noting that 20 state governments have announced plans to begin the reopening of their economies. He applauded the Senate's passage of the Paycheck Protection Program (PPP) and Health Care Enhancement Act, which he mentioned includes $382 billion for small businesses, $75 billion for hospitals and $25 billion for COVID-19 testing efforts.
  • Treasury Secretary Steven Mnuchin thanked Congress for its work to strike a bipartisan deal on Phase 3.5, stressing the importance of continuing to ensure access to Small Business Administration (SBA) loans. He indicated that the additional funding for PPP would have a significant impact on the economy and that the Administration expects it to be the last traunch of PPP funding. Sec. Mnuchin also emphasized that the intent of the PPP is for businesses that need access to capital, noting that they will issue more FAQs to explain the certification.
  • When asked about a Phase 4 bill and other potential future stimulus measures, Sec. Mnuchin mentioned that President Trump has voiced his intent to work on an infrastructure package. In particular, he highlighted that the Administration wants to rebuild the nation's bridges, tunnels and roads and expand access to rural broadband.
  • President Trump reiterated his decision to issue an Executive Order (EO) to temporarily suspend immigration into the United States for 60 days, arguing that it would help protect the jobs and health of American citizens. The EO would only impact individuals seeking permanent residence (green cards).
  • On testing, President Trump mentioned that the U.S. Food and Drug Administration (FDA) has authorized 50 diagnostic tests and accepted four applications for antibody tests. Dr. Stephen Hahn, FDA Commissioner, noted that the agency has re-issued the emergency use authorization (EUA) for the Laboratory Corporation of America (LabCorp) COVID-19 RT-PCR Test to permit testing of samples self-collected by patients at home.
  • Dr. Deborah Birx, White House Coronavirus Response Coordinator, indicated that there has been a decline in new coronavirus cases in metropolitan areas across the country, including New York City. When asked why the Centers for Disease Control and Prevention (CDC) has not held a media briefing call since mid-March, President Trump assured that the agency continues to be very involved in the government's response efforts to combat COVID-19.
  • On questions regarding the health and status of North Korea's leader Kim Jong-un, President Trump stated that he has a good relationship with Kim, but is unaware of any details regarding his condition.

Monday, April 20 highlights:

  • President Trump noted that the Administration continues to press Congress to replenish the PPP, indicating that they hope to have an agreement soon, with a vote in the Senate as early as tomorrow. He noted that the Administration is also pushing for the deal to include $75 billion for hospitals and other health care providers.
  • Based on the record-low price of oil, the Administration is filling up the Strategic Petroleum Reserve and is looking to put as much as 75 million barrels into the reserve itself.
  • CMS Administrator Seema Verma has announced new guidelines on how hospitals can move to providing non-emergent, non-COVID-19 care in states and regions where outbreaks are deemed under control.
  • The Coronavirus Task Force had its weekly conference call with governors today, where they discussed the Administration's plan for reopening America. The Task Force also presented a memorandum detailing laboratory capacity for diagnostic tests to perform coronavirus tests.
  • The White House is preparing to use Title III of the Defense Production Act to give Puritan, a Maine medical supplies company, federal funding to ramp up its production of swabs for coronavirus testing.
  • The Administration is also working with Oak Ridge National Laboratory to use its injection-molding capacity to potentially produce over 10 million collection tubes per week.
  • Lt. Gen. Todd Semonite, Chief of Engineers and commanding General of the Army Corps of Engineers, stated that the Department of Defense's top priority is to protect civilians and service members, and he indicated that progress has been made on the southwest border wall.

Relevant Links

Akin Gump Alerts and Other Resources

Akin Gump COVID-19 Resource Center

COVID-19 U.S. State and Local Response Map

50 State Survey – Coronavirus-Related "Stay at Home" Orders

International Trade: Executive Order and CBP Rule Authorize 90-Day Duty Deferral for Certain Imports

SEC/Financial Regulation: Statements issued by UK Regulators on the Impact of COVID-19 on the Senior Managers and Certification Regime

Privacy and Data Protection: U.K.'s Data Protection Regulator's Updated Guidance on "Empathetic and Pragmatic" Approach During the Global COVID-19 Pandemic


U.S. Food and Drug Administration (FDA):

  • Tweet at 11:39 AM, April 21, 2020 ( Link)
    • "FDA has authorized the first COVID19 diagnostic test with a home collection option. ( Press Release)"

U.S. Department of Health and Human Services (HHS):

  • Tweet at 12:13 PM, April 21, 2020 ( Link)
    • "HHS' Administration for Community Living is awarding nearly $1 billion in COVID19 response funding to support older adults and people with disabilities living in the community + their family caregivers and to advocate for nursing home residents. $500M will go to meals for seniors. ( Press Release)"
  • Tweet at 1:50 PM, April 21, 2020 ( Link)
    • "News: the Health Resources and Services Administration's Federal Office of Rural Health Policy has released a notice of funding opportunity w/ $15M for the Tribes to prevent, prepare, and respond to #COVID19 in rural communities through the CARES Act. APPLY by Wed, May 6 here."
  • Tweet at 3:13 PM, April 21, 2020 ( Link)
    • "News: the Substance Abuse and Mental Health Services Administration moves quickly to begin releasing $110 million in emergency grant funding to provide Americans with substance use treatment and Mental Health services during the #COVID19 pandemic. Read more here."

U.S. Department of the Treasury:

  • Tweet at 8:17 PM, April 20, 2020 ( Link)
    • "Treasury finalizes agreements with major airlines, disburses initial Payroll Support Program payments. ( Press Release)"

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma:

  • Tweet at 5:33 PM, April 20, 2020 ( Link)
    • "Yesterday, CMS announced recommendations on providing essential non-COVID19 care to asymptomatic patients in regions with low numbers of COVID-19 cases. Read our recommendations and requirements here."
  • Tweet at 10:35 AM, April 21, 2020 ( Link)
    • "CMS has announced a COVID19 data clinical trial – which will provide vital data to help drive improvement in patient care - through our Quality Payment Program that will allow clinicians to earn credit in the Merit-based Incentive Payment System. ( Press Release)"

Senate Majority Leader Mitch McConnell (R-KY):

  • Tweet at 3:10 PM, April 21, 2020 ( Link)
    • "I am encouraged that Democrats have finally agreed to reopen the Paycheck Protection Program and abandon a number of their unrelated demands. My full statement on Congress's new bipartisan agreement to provide additional small-business support, more funding for testing, and more here."

Originally Published 22 April, 2020

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