News from Washington on federal coronavirus information and resources.
Coronavirus Update
April 6, 2020
Information and resources on federal responses to the coronavirus crisis for state, local, and regional government.
Federal Response
Capitol Hill. Over the weekend, Speaker Nancy Pelosi (D-CA) sent a letter to all members of Congress urging the importance of a “CARES 2 package,” to extend and expand on the recently passed CARES Act. In her letter, Speaker Pelosi wrote that the CARES 2 package must “go further” to assist small businesses, farmers, unemployment benefits and to give additional direct payments. Pelosi also said the next bill might not include a significant infrastructure funding component – a departure from previous statements.
Senate Majority Leader Mitch McConnell (R-KY) has alsostated there will be a fourth coronavirus bill and that health care should be a top priority as Congress moves to draft the legislation.
The Congressional Budget Office had a busy week. CBO sent aletter on April 2 to the Chairwoman of the House Appropriations Committee Nita Lowey (D-NY) that includes the preliminary estimate of the budgetary effects of the Families First Coronavirus Response Act specificallyto state and local governments. CBO estimates that state and local governments will spend a total of about $20 billion over FY 2020 and 2021 to comply with new FMLA rules while not being eligible for federal assistance via tax credits which are available to businesses. The Department of Labor established April 1 as the effective date for the two new paid leave programs. The framework for the CBO estimates is detailed in a January 2, 2020, CRS report. TFG has created a Brief on COVID-19 Emergency Paid Sick and FMLA Programs, which will be available on the TFG Coronavirus Website.
In addition, CBO updated its economic forecast on April 2 to account for the economic impacts of the coronavirus. CBO notes its economic projections, especially for later periods, are highly uncertain at this time. The following are CBO’s very preliminary estimates, which are based on information about the economy and which include the effects of an economic boost from recently enacted legislation.
Gross domestic product to decline by more than 7 percent during the second quarter with a possible projected decline in the annualized growth rate exceeding 28 percent.
Unemployment rate to exceed 10 percent during the second quarter.
Interest rates on 10 year T-Notes below 1 percent during the second quarter
Last week Pelosi indicated there may be an attempt in the next bill to address the deduction cap on state and local taxes (SALT); we are tracking this closely. According to Roll Call, Pelosi told the New York Times she wants to retroactively repeal the SALT cap for both 2018 and 2019.
Reps. Andy Levin (D-MI), Ben Ray Lujan (D-NM), Tom Malinowski (D-NJ), and Joe Neguse (D-CO) led a bipartisanletter signed by 128 House Members and sent to Speaker Pelosi requesting the future COVID-19 response packages include stabilization funding specifically for localities with populations under 500,000.
Administration. The White House has set up ahotline for members of Congress to expedite action on emergency coronavirus issues as they sprout up across the country.
DOL has published two guidance letters, the Unemployment Insurance Guidance Letter 15-20 andUnemployment Insurance Program Letter 16-20. The first provides guidance to states to administer an additional $600 weekly payment to certain eligible individuals who are receiving other benefits. The second provides guidance to states for individuals who do not qualify for regular unemployment compensation, such as self-employed workers, independent contractors, and gig workers.
Advocacy
NLC sent aletterto Congressional leaders on April 2 that outline NLC’s requests for a fourth coronavirus stimulus package including additional funding for infrastructure, cities and towns, the conversion of federal loans into grants, and expanded opportunities for job security and economic mobility.
NACo sent a letter to Treasury Secretary Mnuchin requesting further clarification on the Coronavirus Relief Fund and to offer NACo’s understanding and interpretation of the law as it relates to the Fund.
News and Resources
The Ferguson Group produced a TFG Brief to help local government advise local businesses on how to take advantage of programs to stay afloat financially in the coming weeks. The Brief includes links to Paycheck Protection Program and will soon be available on the TFG Coronavirus Update Website.
The Small Businesses Association opened applications for its key assistance program from the last coronavirus response bill last Friday, but the launch of the $349 billion program was filled with technical difficultieson the first day.
Nine states have yet to enact stay-at-home orders:
