On Monday, July 27, Senate Republicans released a series of bills to embody the latest COVID-19 relief package. Proposing several separate bills at once gives the Senate the option of passing provisions that enjoy broader support without endangering the entire effort. Congressional Democrats have so far rejected the approach, preferring to negotiate one large package based on the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act passed by the House in May. Opposition from Senate Republicans to another stimulus in excess of $1 trillion would imperil passing another large relief package, and Majority Leader Mitch McConnell (R-KY) is seeking a viable path forward even while negotiations between the Trump administration and Congress intensify ahead of the July 31 expiration of the $600 per week bonus to unemployment recipients. Congress will not want to depart for its annual August recess without addressing these important issues.
Here are some highlights of what is in the Republican package and a reminder of Democrats’ priorities as laid out in the HEROES Act.
A key sticking point among Republicans that led to a delay in the release of their legislative package was how to handle the expiring additional $600 a week in unemployment benefits previously authorized in March under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The expanded benefits are set to expire on July 31.
Under the Republican plan:
- The benefits would be extended at $200 per week on top of state-level benefits, which vary state-by-state for two months.
- After two months, states would provide benefits equal to 70 percent of previous wages, with the federal supplement capped at $500 per week.
- States would be allowed to apply for a waiver to secure up to two additional months to transition to the new calculation.
What the Democrats want: Democrats are advocating to extend the increased $600 payment into January.
Economic Assistance to Individuals
The Senate proposal includes a second round of stimulus payments at the same amount and thresholds as the original round authorized under the CARES Act:
- $1,200 payments at individual incomes of $75,000 or less a year, with $500 in benefits for each child or adult dependent.
What the Democrats want: The HEROES Act also included $1,200 stimulus payments, but has $1,200 benefits per child, up to a total of $6,000 per household.
McConnell has stated repeatedly that broad liability protections are a red line for Senate Republicans in any future COVID-19 relief package. A liability protection measure championed by Senator John Cornyn (R-TX) was included in the Republican package. This proposed measure would:
- Shield businesses, schools and other organizations from COVID-19-related lawsuits through October 1, 2024, as long as they make “reasonable” efforts to follow public health guidelines and don’t commit acts of “gross negligence” or “intentional misconduct.”
- Place medical liability claims against caregivers for coronavirus-related care under federal jurisdiction. Again, to prevail, plaintiffs must show that the defendant was grossly negligent or engaged in willful misconduct and violated relevant public health guidelines in place at the time the incident occurred. Simple negligence is not enough.
What the Democrats want: Democrats have strongly pushed for consistent and higher worker safety standards instead of liability protections for businesses. Notably, the HEROES Act included a $200 billion “heroes’ fund” to provide hazard pay to workers deemed essential during the pandemic.
Health Care Provider Funding
The provider relief fund originally authorized under the CARES Act and further funded under the Paycheck Protection Program and Health Care Enhancement Act, which passed in April, has been a key mechanism enabling the administration to distribute emergency dollars to health care providers, including hospitals.
The Senate proposal includes an additional $25 billion for the provider relief fund.
What the Democrats want: The HEROES Act included $100 billion for this fund and increased the federal governments’ contribution to state Medicaid plans, something many governors and hospitals have recently requested. The Senate proposal does not address the Medicaid match rate.
Testing, Surveillance and Contact Tracing
The Senate proposal includes $16 billion for testing, contact tracing, and surveillance despite the White House’s reported desire to not include any funding.
What the Democrats want: The HEROES Act included $75 billion to support testing and contact tracing activities to monitor and suppress the virus.
Health Centers and Health Care Workforce
The Senate proposal includes $8.1 billion for the Public Health and Social Services Emergency Fund to support health care workforce capacity needs.
What the Democrats want: Of the Republican’s $8.1, $7.6 billion would fund health centers through the Health Resources Services Administration, the same amount funded in the HEROES Act.
Telehealth use and popularity has seen an unprecedented uptick during the pandemic in large part due to Congress’s allowing HHS to temporarily waive certain statutory restrictions on the use of remote care in Medicare. To address this expanded demand, the Senate proposal includes the following measures:
- The Department of Health and Human Services (HHS) would be allowed to continue the expansion of telehealth services through at least the end of 2021.
- Federally qualified health centers and rural health clinics would see a limited continuation of their CARES Act-authorized telehealth services for five years after the public health emergency ends.
- The bill would require a MedPAC report on the use of telehealth during the pandemic by July 2021, presumably to help inform new policies as the bill’s expansion expires at the end of that year.
- The Secretary of HHS would be directed to create best practices for nursing homes to use telehealth.
- A proposal by Senator Lamar Alexander (R-TN) in the package would allow employers to offer telehealth as an excepted benefit to employees who are neither full-time nor eligible for the employer’s coverage.
These measures fall short of advocates’ desire to make permanent the expansions provided under previous COVID-19 relief packages and could ignite a new debate around the bill’s restricting certain services only based on an existing provider-patient relationship.
What the Democrats want: The HEROES Act included no expansion of telehealth services, but several bills have been introduced in recent weeks on both sides of the Hill and on both sides of the aisle to usher in more sweeping permanent changes to Medicare’s telehealth policies.
Most COVID-19 relief packages to date have included extensive funding for HHS to respond to the current pandemic and prepare for subsequent public health emergencies. Much of this funding has helped fuel initiatives like the newly formed Operation Warp Speed, an effort by the Department of Defense and HHS’s Biomedical Advanced Research and Development Authority (BARDA) to expedite the development of a COVID-19 vaccine. This initiative has included the following expenditures:
- $20 billion to BARDA for vaccine, therapeutic and diagnostic development.
- $6 billion for vaccine distribution campaign through the Centers for Disease Prevention and Control (CDC).
- $2 billion for the nation’s strategic national stockpile.
What the Democrats want: The HEROES Act included only $4.5 billion for BARDA and no additional, specified funds for vaccine distribution work at the CDC.
Public Health and Research Funding
The Senate proposal includes the following allocations for public health and research:
- $15.5 billion for the National Institutes of Health, $10.1 billion of which will be dedicated to offset costs to research activities incurred as part of the pandemic.
- About a half-dozen institutes and centers would receive additional funding, ranging from a $1.2 billion allocation to the National Center for Advanced Translational Sciences to $64 million in funding for the National Institute on Minority Health and Health Disparities. Nearly half a billion would go to Dr. Fauci’s National Institute of Allergy and Infectious Diseases.
- $3.4 billion to the CDC, including $1.5 billion to continue supporting state, local and territorial public health needs; $500 million to enhance seasonal influenza vaccination efforts; $200 million to enhance global public health security efforts; and $200 million to modernize public health data reporting.
- As recent reports have shown deaths from the still ongoing opioid epidemic have reach a record number during the pandemic, the GOP proposal includes $4.5 billion for the Substance Abuse and Mental Health Services Administration (SAMHSA).
What the Democrats want: The HEROES Act offered the following funding for public health and research:
- $4.7 billion for COVID-19 research at the National Institutes of Health.
- $500 million more — $2 billion — in CDC funds specifically for state, local, territorial and tribal public health departments.
- $1.5 billion for SAMHSA. Further, a group of 19 Democrat senators recently wrote leadership requesting only $2 billion for the agency.
Education and Child Care
The Republicans held fast to their commitment to provide more funding for schools to deal with effects of COVID-19. Their package would provide $105 billion for education. The funding would be allocated as follows:
- $70 billion going to elementary, middle and high schools.
- $29 billion for colleges and universities.
- $5 billion to a flexible fund.
- A majority — two-thirds — of funds would be allocated to schools that institute reopening plans, while the remaining third would be distributed based on existing federal funding formulas.
- Senator Alexander’s plan to allow student borrowers to delay loan repayments and then cap loan payments at 10% of income minus housing costs is also included in the legislation.
The GOP also proposes $16.7 billion for the Administration for Children and Family (ACF), including $10 billion for “Back to Work Child Care Grants” to help pay for costs associated with helping childcare operators reopen.
What the Democrats want: Democrats originally proposed $100 billion for education funding for states but oppose tying any funding to reopening of schools. Further, the HEROES Act included up to $10,000 in student loan forgiveness.
The HEROES Act also included $7 billion for the Child Care Development Block Grant within ACF. Child care advocates have asked for closer to $50 billion in support.
Small Businesses and Paycheck Protection Program
The popular Paycheck Protection Program (PPP) originally authorized under the CARES Act has been a major topic on Capitol Hill as the public health emergency continues to plague America’s small businesses. Senate Small Business Chair Marco Rubio (R-FL) and Senator Susan Collins’(R-ME) plan for small businesses was released as part of the Senate Republicans COVID response efforts. The plan includes the following measures:
- Some small businesses would be able to apply for a second PPP loan.
- Eligibility for a second loan would be limited to firms that have 300 or fewer employees and that show a 50% revenue decline from last year.
- The loans, like the original loans, can be converted to grants if employers agree to maintain payroll. A portion of PPP loans will be set aside for businesses with 10 employees or fewer.
- The proposal would let borrowers under the existing PPP spend the forgivable portions of the loans on a broader range of expenses.
- The proposal creates and funds for new low-interest, long-term loans that could be paid back over 20 years to offer working capital and an opportunity refinance existing debt.
- $10 billion to support companies that invest in small businesses with significant revenue losses from COVID-19, manufacturing startups and low-income communities.
What the Democrats want: The HEROES Act would expand PPP to include all nonprofits; provides another $659 billion for the PPP as well as an additional $10 billion for the Economic Injury Disaster Loan program at the SBA.
State and Local Aid
The Republican plan allows flexibility for already allocated stimulus funds to be used for budget relief as many states are facing major budget shortfalls during the pandemic.
What the Democrats want: In a major divergence with House Democrats, the Senate Republican plan contains no new aid for state and local funding. The Democrats included approximately $1 trillion in the HEROES Act in addition to $15 billion for highways, $3.6 billion for elections and $25 billion for the United States Postal Service.
The Senate proposal includes new or expanded tax breaks for businesses including:
- Expanded tax breaks for businesses that are providing meals and entertainment for clients.
- Tax credits for the increased costs related to business expenditures on testing, personal protective equipment, workplace cleaning and retrofitting facilities to adhere to distancing guidelines.
- To address worker retention and hiring, the Republican plan includes an expanded version of the employee retention tax credit for businesses that keep workers on their payrolls and expands a tax credit for large businesses to hire individuals who are unemployed.
- To address the U.S. supply chain for personal protective equipment (PPE), the Republicans included Senator Lindsey Graham’s (R-SC) proposal for a tax credit to spur manufacturing to help the federal government reach the goal of 100% domestic sourcing within five years.
What the Democrats want: In a very different approach, the HEROES Act would repeal the $10,000 cap on state and local tax deductions created in the GOP’s Tax Cuts and Jobs Act of 2017, arguably President Trump’s largest legislative achievement.
Department of Defense
The Senate proposal includes a $30 billion supplemental appropriation for the United States’ defense, including:
- $8 billion for Pentagon weapons procurement.
- $2 billion for the Air Force to procure F-35A fighters and C-130J transport planes.
- $2.2 billion for shipbuilding programs within the Navy, of which more than half would be used for medical ships.
- $5.3 billion for purchases made under the Defense Production Act, through which authority the President could require the prioritization of pandemic-related supplies or goods.
What the Democrats want: The HEROES Act included no major increase to Defense funding.
The Senate proposal would add an additional $20 billion in aid for agriculture.
What the Democrats want: The HEROES Act would provide $16 billion in direct payment to farmers to cover losses related to the pandemic.
Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.