What to Know in Washington: House Readies Vote on Stimulus
The Senate sent a $484 billion package of new pandemic relief funds to the House for likely approval tomorrow, as lawmakers and the Trump administration began turning their attention to the next round of stimulus for a stalled U.S. economy.
The legislation passed by the Senate yesterday — which includes $320 billion for the Paycheck Protection Program designed to help struggling small businesses keep their workers on the payroll — is widely regarded as an interim step as the coronavirus pandemic continues to cause death and economic havoc.
BGOV Bill Summary H.R. 266: Small Business & Hospital Funds
“We have a great victory for the American people,” Speaker Nancy Pelosi (D-Calif.) said after the Senate acted. “But we certainly need to do more.”
President Donald Trump, who met yesterday with New York Gov. Andrew Cuomo (D), said aid to state and local governments would be part of a so-called phase four stimulus, as would money for road projects and expanding broadband service.
“Infrastructure is going to be a big part,” Trump said at a White House briefing. “We have to rebuild our country.”
At the same briefing, Treasury Secretary Steven Mnuchin declined to put a price tag on the next package, but Cuomo and other governors have called on the federal government to provide at least $500 billion into state aid alone.
The $484 billion legislation moving through Congress this week comes on top of the $2 trillion package enacted last month and follows tens of billions of dollars in an earlier measure passed in response to the pandemic. While the dollar figure so far is historic, so is the scale of the downturn, with some economists expecting double-digit contraction in gross domestic product in the second quarter.
Democrats want a broad spending package for the next round. Senate Minority Leader Chuck Schumer (D-N.Y.) said it should include funds for state and local governments, hazard pay for front-line workers, food aid, election security and funds for the U.S. Postal Service.
It’s not clear how quickly a plan with bipartisan support can be drafted. Congress isn’t scheduled to return to Washington until May 4, though negotiations can take place and provisions drafted without most lawmakers in town. Read more from Laura Litvan, Erik Wasson and Katia Dmitrieva.
Budget Figures May Be Bad News: The Congressional Budget Office said last week that the economic relief package passed in March would cost the government $1.8 trillion, not the $2.2 trillion initially thought. But some economists say the CBO’s calculations are not that comforting, and suggest the government may not be providing the economy with all the support it might need to survive the coronavirus shock relatively intact.
“From a budget perspective, this might seem like good news, but from the larger issue of avoiding economic catastrophe it is a problem,” said former CBO Director Douglas Holtz-Eakin, who now heads the American Action Forum. Read more from Rich Miller.
Virus Aid Watchdog Will Have Subpoena Clout, Member Says: The congressional watchdog overseeing a half-trillion dollars in virus-related spending can rely on the subpoena powers of other parts of Congress if it needs to fight for documents from the Trump administration to conduct its work, according to Rep. French Hill (Ark.), a Republican member of the commission. Hill said the $2.2 trillion virus relief act clearly directs the executive branch to provide details needed for oversight, although the five-member congressional commission by itself does not have subpoena authority. Read more from Saleha Mohsin.
What to Watch Today
Pelosi holds a House Democratic caucus conference call at 11 a.m.
House Minority Leader Kevin McCarthy (R-Calif.), Republican Whip Steve Scalise (R-La.) and Conference Chair Liz Cheney (R-Wyo.) hold a press conference at 3 p.m.
The House holds a pro forma session at 1 p.m.
The House Rules Committee meets at 5 p.m. to consider a measure authorizing remote voting by proxy in the House. The measure would allow for remote voting by proxy for measures responding to the Covid-19 pandemic, enable virtual committee proceedings, and task the Committee on House Administration with leading a study examining the feasibility of remote participation on the House Floor. Read a Democratic summary of the measure here.
The White House holds a Coronavirus Task Force press briefing at 5 p.m.
Economic Actions & Industry Pains
Immigration to Be Suspended for 60 Days: Trump said he would suspend legal immigration to the U.S. for at least two months to help Americans who have been put out of work because of the coronavirus crisis. “It would be wrong and unjust for Americans laid off by the virus to be replaced by new immigrant labor flown in from abroad,” Trump said at a White House briefing. “We must first take care of the American worker.”
The pause will be in effect for 60 days and will apply only to individuals seeking permanent residency, Trump said. He added that “certain exemptions” would be allowed in an executive order, which he said would likely be signed today. “There will be some people coming in.” That apparently includes agricultural laborers. Trump said “the farmers will not be affected by this at all.” The ban would also not apply to health care or medical research professionals, according to the draft. Read more from Nick Wadhams, Jordan Fabian, Josh Wingrove, and Shaun Courtney.
Big Companies Asked to Return Loans: Trump said he’d ask larger companies to return money they accessed from the federal stimulus package because it was intended to help small businesses. Trump, speaking yesterday, criticized Harvard University’s endowment, which was reported borrowing more than $8 million through the program. But Harvard said in a statement that it “did not apply for, nor has it received any aid through the Paycheck Protection Program for small businesses.” Read more from Mario Parker.
- No one wants to take the blame for the loophole that allowed name-brand restaurant chains like Shake Shack to get huge sums of pandemic-relief money meant for small businesses. Lobbyists, lawmakers and agency officials deny responsibility. Yet fingers are pointing over how big national chains including Potbelly and Ruth’s Chris Steak House landed $10 million or more apiece in loans while millions of mom-and-pop firms were left stranded when the program ran out of money. Read more from Ben Brody, Steven T. Dennis and Naomi Nix.
California Gets Largest Share of Disaster Loans: The small business program sent the largest share of its disaster loans and grants to California, according to a partial accounting released yesterday. The Small Business Administration reported on roughly $5.6 billion in coronavirus-related disaster loans and $3.3 billion in grants approved under the Economic Injury Disaster Loan program, or EIDL, so far. Small businesses in California have gotten the most in loans at $1.5 billion, or about $38 per state resident, twice the national average. Both EIDL and the Paycheck Protection Program ran out of money last week. Read more from Mark Niquette.
Virus Contracts Top $7 Billion: The federal government has awarded $7.2 billion in contracts to fight the coronavirus pandemic, including one that would pay a little-known Massachusetts biotech firm more than its reported revenue for the last three years combined. Shares of Moderna rose sharply after the Department of Health and Human Services agreed to pay more than $400 million for the company to develop and test its Covid-19 vaccine now in an initial clinical trial.
It’s just one example of the thousands of federal contracts awarded by the Trump administration to fight the coronavirus, according to a review of federal data compiled by Bloomberg Government. Some companies have secured nine-figure deals to supply thousands of ventilators, face masks, hospital capacity and other critical services needed to manage the outbreak. Read more from Ryan Beene and Phil Kuntz.
Undocumented Students Barred From Aid: Undocumented college students harmed by the pandemic will be left out of emergency grants provided by the latest stimulus package, the Education Department said in a Q&A document. Congress, in enacting the legislation last month, directed more than $14 billion to higher education, including $6 billion for direct aid to students facing a loss of housing, food, or health care because of campus closures. Colleges that will distribute the money expressed uncertainty about whether undocumented students could qualify for it. Read more from Andrew Kreighbaum.
- Education Secretary Betsy DeVos yesterday also released $6.2 billion of the $14 billion higher education package to colleges forced by the coronavirus pandemic to make costly changes such as rapidly switching to online instruction, Kreighbaum reports.
- The Senate yesterday cleared a bill that would allow additional student veterans who can’t complete their courses due to Covid-19 to maintain their educational benefits. The House passed the measure on March 31. The bill would authorize the Veterans Affairs Department to make payments or extend eligibility periods for students who participate in work-study or vocational rehabilitation programs, are affected by school closures, or can’t take courses online. The measure would expand on legislation enacted March 21 (Public Law 116-128). Michael Smallberg has more in the BGOV Bill Summary.
Disparities in State Funding: More populous states are losing out in Covid-19 funding because of the way it’s distributed. Fifty House lawmakers wrote in a letter to House leaders to require both past and future funding be distributed per capita. The letter, led by Reps. Bill Foster (D-Ill.) and Sean Casten (D-Ill.), belies a far bigger problem, Foster said: The Senate has “systematically come up with spending formulas” that disadvantage big states across federally-funded grant programs. Bigger states are paying more in taxes to the federal government than they get back in grants, a shortfall of $20 to $40 billion per year in Illinois, Foster said, Shira Stein reports.
Krugman Says Federal Response Insufficient: Nobel prizewinning economist Paul Krugman said the federal government’s fiscal response to the coronavirus pandemic has been “way insufficient” so far. “We need to un-bottleneck those unemployment benefits,” Krugman said in an interview on Bloomberg Television. The U.S. should set up a federal program to disburse the assistance to workers who have lost their jobs rather than through the patchwork of state systems, which are struggling to handle the volume. He also said there should be more aid for cities and states, which will be crucial to the recovery. Read more from Katia Dmitrieva.
Fear of Job Loss Surges to 45-Year High: A quarter of working Americans believe it’s “very likely” or “fairly likely” they will lose their job or be laid off in the next 12 months, according to a Gallup poll. That’s a 17 percentage-point swing in one year, from matching its lowest reading since 1975 to its highest, driven by the rapid impact of the coronavirus pandemic on the U.S. economy. The survey, released today, was conducted April 1 through 14. Read more from Christopher Condon.
Re-Opening the Country
Agencies Prepare for Re-Opening: A White House Office of Management and Budget memo telling federal agencies to begin the re-opening process after the coronavirus subsides is consistent with the administration’s push to get the U.S. back to normal as soon as possible, but some are calling for a slower startup. The memo from OMB Acting Director Russell Vought rightly tells agency leaders to follow state and local orders intended to curb the pandemic as they look to return employees to their workplaces where that’s feasible, said Robert Shea, an OMB official during the Bush administration. But it’s “troublingly vague,” Shea said. Read more from Louis C. LaBrecque.
Trump Meets With Cuomo: New York Gov. Cuomo said yesterday he and Trump had a “productive” coronavirus discussion at the White House in the latest chapter of an unusual relationship that’s included a public exchange of insults and on-again, off-again bonhomie. The governor said he used the Oval Office session to lobby for more supplies needed to process coronavirus tests, and to ask the federal government to address supply-chain issues. He said he also discussed the need for additional federal funds going to states. Cuomo said Trump was open to including financial relief for hard-pressed states in a phase four stimulus. Read more from Justin Sink and Keshia Clukey.
Far-Right Social Media Stirs Protests: Small bands of protesters have staged demonstrations over government-ordered lockdowns in the otherwise empty streets of a number of Democratic-led states, driven by the social-media tactics of a coalition of gun-rights activists and far-right groups. Mostly in states with Democratic governors and often encouraged by Trump, protests have sprung up to demand an end to social-distancing measures. Social media has been the spark, with Facebook pages springing up to amplify the message and making the movement seem like more of a grass-roots effort than it may, even as some pages attract tens of thousands of likes. Read more from Alyza Sebenius and Misyrlena Egkolfopoulou.
Politics and Elections
Trump Campaign Shaping Up as 2016 Deja Vu: As Trump faces rising disapproval of his coronavirus response, he’s reviving the heated rhetoric that got him elected — blaming China, pointing fingers at global institutions and, especially, cracking down on immigrants.
His latest volley came late Monday in a tweet promising a temporary halt to all immigration into the U.S., even though the coronavirus has already ground travel globally to a halt. It marked a revival of Trump’s signature issue from 2016, when he fired up supporters with vows to build a wall on the southern U.S. border and make Mexico pay for it. The return to the immigration issue arose seemingly out of nowhere, and coincides with the American economy suddenly souring as the lockdowns across the country cause a record spike in unemployment. That dynamic allows Trump to use immigrants as a target for U.S. job losses.
The immigration order is part of a return to his old patterns of criticizing Democratic-led states, attacking global institutions like the World Health Organization and unleashing criticism of China from the daily briefing podium after months of praising its leaders during trade negotiations. And it coincides with a rise in the number of Americans dissatisfied with his handling of the crisis. Read more from Mario Parker.
UAW Endorses Biden: The United Auto Workers union yesterday endorsed presumptive Democratic presidential nominee Joe Biden, snubbing Trump who won significant support among the union’s members in 2016. The endorsement came a day after it backed Biden’s plan for reopening the economy, which UAW President Rory Gamble said was a “nonpartisan, science-based” approach. The country “needs a president who will demonstrate clear, stable leadership, less partisan acrimony and more balance to the rights and protections of working Americans,” Gamble said. “UAW members ultimately want a voice. And Joe Biden is committed to giving UAW members that voice at the table.” Read more from Keith Naughton.
Seven Voters in Wisconsin Infected: Wisconsin health officials have identified seven people who may have contracted coronavirus after voting in the state’s elections earlier this month. The state Department of Health Services added “election activity” to its list of virus investigation questions in its disease registry. The database “attempts to capture anyone that may have voted in person or worked at a polling place” on April 7, according to Jeanette Kowalik, Milwaukee’s commissioner of health. Read more from Emma Kinery.
What Else to Know Today
Oversight Chairs Say Trump Hotel Shouldn’t Get Rent Break: Two House panel chairs said the Trump International Hotel in Washington D.C. should not be given rent reductions in the building it leases from the U.S. General Services Administration, after a New York Times report indicated the hotel was asking for a break on its lease payments as the virus outbreak cripples business. House Oversight and Reform Chairwoman Carolyn Maloney (D-N.Y.) and Government Operations Subcommittee Chairman Gerry Connolly (D-Va.) said in a statement the move is the latest in a string of ethics and contract violations by the president and his business. Read more from Chelsea Mes.
Hackers Target Top WHO Officials: Top officials at the World Health Organization are being targeted by hackers as they work on the global response to the coronavirus pandemic. The WHO’s security team has seen an increasing number of attempted cyber-attacks on the officials since mid-March, according to the organization’s chief information officer, Bernardo Mariano. WHO itself hasn’t been hacked, but employee passwords have leaked through other websites, he said. Mariano said some of the attacks had been perpetrated by suspected nation-state hackers. Read more from Ryan Gallagher.
Kim’s Likely Successor to Follow Hardline Path: Reports of a health scare for Kim Jong Un are prompting watchers of North Korea to envision the country without him: And the general consensus is that not much may change in how the regime deals with the outside world.
While any sudden leadership change in a dictatorship as opaque as North Korea always has the potential for unintended consequences, the 36-year-old leader consolidated power since taking over from his father in 2011. That appeared to leave “no real advocates” for a Chinese-style opening of the North Korean economy or a change of approach with the U.S. on nuclear weapons, according to Robert Kelly, a professor at Pusan National University. Read more from Iain Marlow, Kanga Kong and Jon Herskovitz.
U.S. Calls Out China Over Emerging Markets: When it comes to companies exposed to emerging markets, most notably China, investors should beware the lack of visibility into their books, Securities and Exchange Commission Chairman Jay Clayton said yesterday. Foreign jurisdictions aren’t maintaining adequate standards of investor protection, and the U.S. has little control over that, Clayton and other officials said in a strongly worded statement. The group also underlined a longstanding point of conflict: that the main U.S. accounting watchdog can’t inspect the work that Chinese auditors do for companies that sell stock in U.S. markets. Read more from Jesse Hamilton and Robert Schmidt.
Senate Confirmations: The Senate confirmed Mitchell Silk as assistant Treasury Department secretary for international markets and development yesterday by voice vote. Silk, who worked in China for 15 years, has been serving in the position in an acting capacity, Kathy Larsen reports. The Senate also confirmed John Bobbitt to be an assistant secretary of Housing and Urban Development and Michael Weahkee to be director of the Indian Health Service at the Department of Health and Human Services.
“Rear Admiral Weahkee is a strong leader, who has committed to help the agency fulfill its treaty and trust responsibilities to the many American Indian and Alaskan Natives receiving health care services from the IHS,” Sen. John Hoeven (R-N.D.), chairman of the Senate Indian Affairs Committee, said in a statement. “Especially, in light of the outbreak of COVID-19, the IHS must continue to quickly respond to the needs of tribal communities and the experienced leadership of Rear Admiral Weahkee is greatly needed during these times.”
State Antitrust Probes of Big Tech Continue: Multistate antitrust investigations into Facebook and Google continue despite the coronavirus pandemic, a state antitrust enforcer said. “These investigations will not lose steam,” Gwendolyn Cooley, assistant attorney general with the Office of the Wisconsin Attorney General, said yesterday during an American Bar Association conference. “Whether we have COVID related elements in them, these tech investigations are going to be going full steam,” Cooley said during a webcast. Read more from Victoria Graham.
Chevron Effectively Barred in Venezuela: Chevron will be forced to effectively wind down its operations in Venezuela, dealing the Maduro regime’s crumbling oil industry another blow as Trump maneuvers for regime change in the Latin American nation. The U.S. Treasury Department will no longer allow the company to drill wells, sell and buy crude oil or oil products or transport them, according to the Office of Foreign Assets Control. The decision also affects four U.S. oilfield service providers. Read more from Kevin Crowley and Lucia Kassai.
Ex-Trump Aide Gates Gets Suspended Sentence: A former top Trump campaign aide who became a star witness for Special Counsel Robert Mueller won permission to serve his criminal sentence at home to care for his ill wife and family amid the pandemic. U.S. prosecutors didn’t object to suspending a requirement that Rick Gates serve 45 days of intermittent confinement during a three-year term of probation. Read more from Peter Blumberg.
To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com
To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com