What to Know in Washington: $500 Billion Virus Aid Deal Close

Democrats and the Trump administration are near an agreement on a deal as large as $500 billion to fund a tapped-out small business aid program and provide money for coronavirus testing and overwhelmed hospitals.

Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi (D-Calif.) said yesterday the two sides were close to a deal, though various details remained to be worked out and the entire package still has to be translated into text for legislation.

President Donald Trump was cautiously optimistic about breaking the deadlock in place all of last week as the Paycheck Protection Program for small businesses ran through its entire $349 billion in funding.

“We have a good chance of getting a deal,” Trump said at a briefing yesterday. “A lot of good work has been going on. We could have an answer tomorrow.”

Mnuchin said on CNN’s “State of the Union” he’s hopeful the deal can be passed in the Senate today and the House tomorrow. That timetable appeared to be unrealistic.

While the Senate has a pro forma session scheduled today, leaders of both parties first would have to ensure no senator would object to the agreement in order to pass it by unanimous consent. That typically would require circulating legislative text.

The Senate’s next scheduled session is set for Thursday. Senate Republicans are reviewing the deal.

House Majority Leader Steny Hoyer (D-Md.) notified lawmakers yesterday the chamber could meet as soon as Wednesday to consider the legislation. Because an objection to unanimous consent is likely, Hoyer said the House would probably have to convene for a recorded vote.

House Republicans were told during a conference call yesterday to expect to vote on the package Wednesday in Washington, and the Senate likely will act before that.

Mnuchin briefed House Republicans on the outline of the deal. Discussions are focused on adding an additional $310 billion to the Paycheck Protection Program, or PPP, designed to help small businesses keep workers on their payrolls as much of the country remains under stay-at-home orders, according to two people familiar with the matter.

A separate Economic Injury Disaster Loan program, or EIDL, that provides financing and advances as grants of as much as $10,000 for businesses, would get $50 billion to $60 billion more, the people said.

Both those measure have wide bipartisan support.

The deal will include $75 billion of the $100 billion Democrats demanded for hospitals, with a significant portion aimed at rural hospitals, and $25 billion for virus testing. Read more from Daniel Flatley, Billy House and Saleha Mohsin.

Photographer: Stefani Reynolds/CNP/Bloomberg
Trump at Sunday’s White House Coronavirus Task Force briefing.

What to Watch Today

The Senate meets at 2 p.m. for a pro forma session. The House is scheduled to meet tomorrow at 10:30 a.m. for a pro forma session.

The White House hosts a Coronavirus Task Force briefing at 5 p.m.

U.S. Weighs Reopening

Pence to Talk Testing With Governors: Vice President Mike Pence will discuss shortcomings in U.S. testing for coronavirus infections with governors today, Trump said yesterday. Trump said his administration will share information with the governors ahead of the call about testing capacity in their states that might not yet be utilized. Pence will “review what more they could do, and do together, to develop locally tailored testing strategies,” Trump said yesterday.

The White House will “send them a full list of all large lab machinery in the states” and “the potential capacity of those machines if they’re fully utilized.” He said some governors are relying on their state laboratories and aren’t turning to commercial and academic labs to expand testing. Governors of both parties have complained they can’t begin the White House’s three-phase plan to reopen the U.S. economy without far more widespread testing for the virus. Several governors criticized Trump earlier yesterday for trying to cast the shortfall in testing as a problem for states to resolve. Read more from Mario Parker.

  • On Friday, Trump said there’s enough coronavirus testing capacity to put in place his plan to allow a phased reopening of the economy, even though state officials and business leaders have raised alarms about shortages. “We’ve already built sufficient testing capacity nationwide so states can begin their re-openings,” the president said at the White House on Friday. Read more from Parker and Kristen V. Brown.
  • A review of the outbreaks in states mentioned by the administration as ready to go indicated they don’t actually meet the criteria to do so. On Thursday, Trump cited several states including Montana and Utah as being close to safe to reopen, and said 29 states will be able to reopen “relatively soon.” He followed up Friday morning, tweeting states such as Minnesota, Michigan and Virginia, should “liberate” themselves. Few of the states name-checked by Trump actually appear to meet the task force’s criteria, Polly Mosendz, Kristen V Brown and Emma Court report.

U.S. Not Testing Enough to Reopen, Experts Say: A gap is opening over how much testing is enough—and many public-health experts worry the current level could cost lives and even set back efforts to reopen.

The Trump administration says the U.S. is conducting as many as 120,000 tests a day, the bulk of which is done by commercial labs and some by state public health labs. The president says that’s enough for a phased re-opening, and on Saturday he praised states that have begun to do so. But experts say that number is low, obscuring the extent of the virus’s spread and leaving newly reopened states vulnerable to a new wave of infections.

One estimate by Howard Forman, director of the Yale School of Public Health’s health-care management program, says the U.S. would need the capacity of a million tests per day to be confident the outbreak is contained—which is roughly what the country now does in a week. “The question is, can you stay open?” asked Harvard Global Health Institute Director Ashish Jha. He said the U.S. must be able to do at least 500,000 tests by May 1. At current levels of testing, he said, “it’s nearly impossible for me to see how we do this.” Read more from Emma Court.

Industry Pains & Economic Effects

U.S. Defers Some Tariffs During Virus: The U.S. will allow importers and manufacturers to defer payments on many imported goods for 90 days, a move aimed at freeing up cash for pandemic-hit businesses that’s limited in scope to avoid stemming ongoing punitive measures that are a centerpiece of Trump’s trade strategy. “This will protect American jobs and help these businesses get through this time,” Mnuchin said in a statement. The deferral doesn’t apply to anti-dumping or countervailing duties, or so-called Section 201, Section 232 or Section 301 duties. As such, it won’t ease Trump’s duties on China, steel and aluminum, or enforcement actions he took against Airbus. Read more from Jenny Leonard and Derek Wallbank.

Toomey, Shalala Tapped for Oversight Commission: Pelosi on Friday announced the appointment of Rep. Donna Shalala (D-Fla.) to serve on the Congressional Oversight Commission intended to police about $500 billion in coronavirus rescue loans made to industries, including airlines. Earlier in the day, Sen. Pat Toomey (R-Pa.) was named by Senate Majority Leader Mitch McConnell (R-Ky.) to the five-member panel.

The two lawmakers join Rep. French Hill (R-Ark.), who was chosen by House Minority Leader Kevin McCarthy (R-Calif.) on Friday, and the selection by Senate Minority Leader Chuck Schumer (D-N.Y.) of Bharat Ramamurti, a former aide to Sen. Elizabeth Warren (D-Mass.).

Pelosi and McConnell have yet to announce the commission’s fifth and final member, who will serve as its chairman and be selected by them jointly. Pelosi said Thursday she’s been exchanging names with McConnell. Read more from Billy House.

Senators Propose State and Local Government Rescue: A Republican and a Democrat in the Senate are proposing a $500 billion fund for state and local governments as part of the next comprehensive rescue package from Congress to aid parts of the country reeling from the coronavirus pandemic. As Democratic leaders and the Trump administration negotiate an interim infusion of aid to small businesses, Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.) are looking further ahead. The pair want to establish the half-trillion-dollar fund to help states hardest hit by the Covid-19 pandemic. The money would be divided into three tranches and distributed according to formulas that reflect population, infection rates and revenue loss. Read more from Daniel Flatley.

Guardians of Global Economy Come Up Short: Facing what the International Monetary Fund says is a crisis like no other, policy makers from leading economies agreed this past week on a set of initiatives to help emerging markets and poor nations weather the coronavirus shock, including a path-breaking halt on debt payments. But critics faulted the Group of 20 for failing to adopt for the rest of the world the all-out approach they’ve embraced to help their own countries. Read more from Rich Miller and Eric Martin.

Shake Shack to Return PPP Loan After Uproar: Shake Shack, the U.S.-based burger chain, will return its entire $10 million loan from the U.S. government, the company’s leaders said in a statement. The announcement follows widespread criticism over who got access to the funds aimed at saving small businesses before they were depleted. More than a dozen publicly traded companies with revenue topping $100 million received funds before the program ran dry, according to a Bloomberg review of regulatory filings.

“Shake Shack was fortunate last Friday to be able to access the additional capital we needed to ensure our long term stability through an equity transaction in the public markets,” said CEO Randy Garutti and Danny Meyer, the founder and chairman of Shake Shack and CEO of Union Square Hospitality Group. Read more from Derek Wallbank.

Trump Announces $19 Billion for Farmers: Trump announced a $19 billion bailout package for farmers hurt financially by the coronavirus. The aid includes $16 billion in direct payments to farmers to boost their incomes, along with $3 billion in government purchases of meat, dairy products and other foods, the president said Friday at a White House briefing. The Agriculture Department will receive another $14 billion in July for further assistance. “This will help our farmers and our ranchers, and it’s money well deserved,” Trump said. Read more from Mike Dorning.

Airlines May Cut More Than 100,000 Jobs Come Fall: U.S. airlines face a bleak future of depressed traffic and volatile revenue well into 2021, as the global economy transitions from the acute damage of a public health catastrophe into a potentially long recession. Already a bumpy ride for the “Big Three” carriers, the journey promises to get worse this fall when billions of dollars in government assistance ends. Several carriers, including Delta and United, are openly contemplating how they will shrink operations, while American Airlines is moving to shed more of its older planes. By one analyst’s count, as many as 105,000 jobs could be lost industrywide. Read more from Justin Bachman and Mary Schlangenstein.

  • Delta won approval to stop flying to destinations on some dates this summer as the Covid-19 outbreak devastates its business. The Transportation Department on Saturday said it’s granting parts of the airline’s request to waive the rules in coronavirus stimulus legislation requiring a minimum level of service for carriers accepting financial assistance. Delta had asked for flexibility for its summer service to spots in Alaska, Massachusetts, Montana, Wyoming and the Virgin Islands. Read more from Courtney Rozen.

Health Care Response

Nursing Homes Must Report Cases, Hospitals Can Ease Services: Nursing homes will be required to report confirmed cases of Covid-19 to families, residents, and the CDC, according to a new directive issued yesterday by the CMS. These data aren’t currently collected by the CDC, the CMS, or the Federal Emergency Management Agency. “Nursing homes have been ground zero for COVID-19,” CMS Administrator Seema Verma said in a release. Read more from Fawn Johnson.

Also at a White House press conference yesterday, Verma announced new guidelines outlining how hospitals can gradually resume elective surgeries and other in-person services as social distancing measures ease. In a statement, CMS said this transition should be done in coordination with local and state public health officials while ensuring there’s enough personal protective equipment and staff available.

Cuomo Sees New York on ‘Other Side’: Gov. Andrew Cuomo (D) said yesterday that New York appears to be “on the other side” of the coronavirus crisis as he announced another drop in daily deaths and highlighted other positive trends. “If this trend holds, we are past the high point,” Cuomo told reporters. “Whether or not the descent continues depends on what we do. But right now we are on a descent.” The daily death count of 507—in the nation’s epicenter of the Covid-19 epidemic—was the lowest since April 6, after New York weathered almost two weeks of fatalities numbering between 606 and 799, the peak from April 9. On Saturday, Cuomo reported 540 new fatalities.

In a notably upbeat briefing, Cuomo showed the curve of total hospitalizations on a steady downward trend. He said that intubations onto ventilators also continue to drop. Total new hospitalizations from Covid-19 fell dramatically, to 1,384 on Sunday from 1,915 on Saturday. Read more from Ian Fisher.

  • Thousands of New Yorkers are expected to be tested in the upcoming week to determine how many people were infected with the coronavirus but didn’t show any symptoms. Cuomo said testing for antibodies will provide “the first true snapshot of what we’re really dealing with.” Read more from Emily Wilkins.

Health System, Shaken by Coronavirus, Withstands It: America’s beleaguered health system has remained afloat throughout the coronavirus attack, if only through raw ingenuity. As Covid-19 started spreading across the U.S., health officials made grim projections of hundreds of thousands of deaths if residents didn’t shelter in place. Hospital executives predicted frightening forecasts: mass shortages of intensive-care beds, dwindling personal protective equipment and a dearth of ventilators.

The worst didn’t come to pass. Today, almost every state is avoiding ICU bed shortages, according to the consulting firm Advisory Board. On April 1, projections had painted a bleak picture of unquenchable demand. On April 13, the outlook was “much more optimistic,” a company presentation said, adding: “challenges ahead, but progress across the board.” Read more from Olivia Carville and Dina Bass.

Covid-19 Exposes VA Hospitals’ Holes: The Department of Veterans Affairs is supposed to provide a safety net for the U.S. medical system in times of crisis. Yet its hospitals have treated just 135 civilians afflicted with Covid-19, according to numbers released this week, even as coronavirus infections have pushed tens of thousands of Americans into the nation’s hospitals.

The limited response stems in part from efforts to rein in the VA’s medical services after a series of political battles over whether to privatize elements of the nation’s largest hospital network. In the early months of his term, Trump assigned an unconventional group to oversee the VA—his son-in-law, senior adviser Jared Kushner, and three political advisers who socialized at his Mar-a-Lago resort. Their involvement caused so much bureaucratic distress that the VA ended up with an assortment of vacancies in high-level management positions. Read more from David Kocieniewski, Neil Weinberg and Josh Eidelson.

Trump Says China May Be ‘Knowingly Responsible’ for Virus: Trump raised the prospect that China deliberately caused the Covid-19 outbreak that’s killed over 40,000 Americans and said there should be consequences if the country is found to be “knowingly responsible.” Dr. Deborah Birx, a member of the White House Coronavirus Task Force, said yesterday the first country exposed to a pandemic has a “moral obligation” to be transparent in its response. “Let’s see what happens with their investigation. But we’re doing investigations also,” Trump said at a White House news conference on Saturday. “If it was a mistake, a mistake is a mistake. But if they were knowingly responsible, yeah, then there should be consequences.” Read more from Mario Parker.

  • A top Wuhan laboratory official denied any role in spreading the new coronavirus, in the most high profile response from a facility at the center of months of speculation about how the previously unknown animal disease made the leap to humans. Yuan Zhiming, director of the Wuhan National Biosafety Laboratory, hit back at those promoting theories that the virus had escaped from the facility and caused the outbreak in the central Chinese city. “There is absolutely no way that the virus originated from our institute,” Yuan said in an interview Saturday with the state-run China Global Television Network. Read more.

G-20 Health Ministers See ‘Systemic Weakness’: Health ministers from the Group of 20 leading economies said the Covid-19 pandemic “has highlighted systemic weaknesses” in health readiness around the world. The officials commented in a communique issued from Riyadh after a teleconference hosted by Saudi Arabia. The ministers “addressed the need to improve the effectiveness of global health systems by sharing knowledge and closing the gap in response capabilities and readiness,” they said in the document. Read more from Janice Kew.

Elections & Politics

Trump Escalates Culture War: Trump is fighting back against the public health and economic fallout from the coronavirus pandemic in the same way he’s navigated other political perils—by stoking the nation’s partisan divide. But the scale of the crisis the U.S. is facing—over 40,000 people dead and tens of millions out of work—is bigger than anything Trump has faced. Even some Republican strategists doubt his standard campaign playbook will work in November.

With the “rally around the flag effect” waning and his poll numbers down, the president abandoned a pretense of bipartisanship on Friday by tweeting his supporters should “liberate” Minnesota, Michigan and Virginia—three states with Democratic governors and strict stay-at-home orders. Protests in Michigan, whose governor, Gretchen Whitmer, is a possible running mate for Democrat Joe Biden, have been organized by a Trump campaign surrogate. Read more from Jordan Fabian and Tyler Pager.

  • Trump complained on Twitter Saturday about the attitude of Senate Democrats on a call with Pence about the administration’s response to the coronavirus pandemic. “Nothing that anyone could have said, including ‘it’s over,’ could have made them happy, or even a little bit satisfied,” Trump said. “They were RUDE and NASTY.” Ros Krasny has more.

Biden Digital Game Outmatched by Trump: Trump’s campaign boasts it needed just 24 hours to switch into virtual mode after coronavirus lockdowns ended his signature, high-energy rallies. For Biden, who thrives on the personal connection of retail politics, the transition is taking much longer.

Trump’s operation dominates the digital space in no small part thanks to the presidential bully pulpit and his massive Twitter presence. But Biden, a month after the pandemic forced him off the trail, has yet to beef up his digital team and is still working to expand his outreach to quarantined voters. Unlike rivals Sens. Elizabeth Warren (D-Mass.) or Bernie Sanders (I-Vt.) who relied on innovative technology to reach supporters during the Democratic primary season, Biden ran a traditional campaign leveraging his name recognition, political contacts and skills in retail politics. As of last week, Biden hired no new staff with expertise in digital politics, the campaign said, instead relying on existing aides. Read more from Misyrlena Egkolfopoulou and Bill Allison.

What Else to Know

U.S., Canada, Mexico Keep Up Border Controls: Canada and the U.S. will extend for 30 days the restrictions that closed their shared border to most travelers, Prime Minister Justin Trudeau said. Separately, the White House said Trump spoke with his Mexican counterpart about the need for continued border restrictions on the southern U.S. frontier. Canada and the U.S. agreed to close the border to non-essential travelers in March. Saturday’s agreement extends the measures to May 20. It has the same terms as before and allows essential goods and services to move between countries, Trudeau said at a news conference in Ottawa. Read more from Shelly Hagan.

Carper Accuses Trump Official of Meddling in PFAS Rulemaking: The Senate Environment and Public Works Committee’s top Democrat on Friday accused a high-ranking former EPA official of trying to make it harder for the agency to protect the public from per- and polyfluoroalkyl substances (PFAS). In a letter to Environmental Protection Agency chief Andrew Wheeler, Sen. Tom Carper (D-Del.) laid out a list of allegations against Nancy Beck, former deputy assistant chief of the agency’s Office of Chemical Safety and Pollution Prevention. Among them was a charge that Beck spearheaded a reversal of the White House’s earlier finding that a February supplemental proposed rule on PFAS didn’t have to undergo White House or interagency review. Read more from Stephen Lee.

  • The onset of the coronavirus pandemic has stalled a range of efforts to address PFAS in drinking water, prompting concerns about what could happen if there’s a long-term delay. The chemicals have spread through drinking water, air, soil, and groundwater in many states. But the pandemic has delayed a federal study on the health effects of the chemicals, as well as PFAS testing and remediation efforts in Michigan and Ohio, where governors have issued stay-at-home orders and urged social distancing. Read more from Sylvia Carignan.

Judge Grants Pentagon’s Request to Revisit JEDI Contract Pricing: A U.S. judge granted a Pentagon request to reconsider parts of its decision to award Microsoft a controversial $10 billion cloud-computing contract that’s under a legal challenge from rival Amazon. In a sealed filing last Friday, Judge Patricia Campbell-Smith of the U.S. Court of Federal Claims paused court proceedings on Amazon’s lawsuit while the Defense Department revisits the JEDI contract for 120 days. She left open the door for the Pentagon to ask for more time. Read more from Naomi Nix.

China Flexes Muscles on Hong Kong: China is again taking steps to rein in Hong Kong’s democracy advocates, drawing fresh condemnation from the U.S. while antagonizing protesters who paralyzed the city for much of last year. The Beijing-backed Hong Kong government arrested 15 people on Saturday, including prominent pro-democracy activists and a lawmaker. The move came after China’s Liaison Office, Beijing’s representative in Hong Kong, asserted the right to intervene in the city’s affairs—prompting local authorities to put out a series of statements attempting to clarify the agency’s role. Read more from Annie Lee and K. Oanh Ha.

Korea Says Kim Jong Un Didn’t Send Letter to Trump: An official at North Korea’s foreign ministry said Kim Jong Un didn’t send any letter to Trump recently although it’s unclear if Trump mentioned letters exchanged in the past, Korean Central News Agency reported. North Korea will analyze U.S. leadership’s purpose of leaking groundless information to the media. Trump earlier said he got a nice note from the North Korean leader recently, Shinhye Kang reports.

ACA Insurers to Owe $2.7 Billion: Health insurers will refund an estimated $2.7 billion to $7.9 million Obamacare consumers this fall to pay back overcharges in recent years, nearly double the 2019 record of $1.3 billion in refunds. Refunds, or rebates, to people who purchased health coverage through the Affordable Care Act individual marketplaces will average $420 per customer, according to a report released Friday by the Kaiser Family Foundation. More than 4.7 million people in that market are expected to receive the refunds, it said. Read more from Sara Hansard.

Former Treasury Chief O’Neill Dies at 84: Paul O’Neill, whose outspokenness cost him his job as President George W. Bush’s first Treasury secretary after having led Alcoa through a period of consistent profitability, has died. He was 84. O’Neill died Saturday at his home in Pittsburgh after battling lung cancer for the last few years, his family said. O’Neill ran the Treasury Department for almost two years and was the first casualty of Bush’s Cabinet after roiling financial markets and managing to offend three of the job’s main constituencies: Wall Street, Congress and foreign officials. Read more from Simon Kennedy and Brendan Murray.

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