What to Know in Washington: Aid Package to Skip Travel Industry

The economic package to be unveiled by President Donald Trump will leave out for now any aid for the travel industry, which has been battered by the coronavirus outbreak, according to people familiar with the matter, raising the risk that the plan won’t go far enough to satisfy investors.

As outlined by Trump in remarks yesterday, the proposal will likely include a payroll tax cut and a short-term expansion of paid sick leave, according to the people, who described the plan on condition of anonymity ahead of its planned release today.

While the White House wants to find a way to help airlines and hospitality companies reeling from a plunge in demand from travelers, administration officials remain uncertain about the best way to do so.

Elements of the package could still shift, including the payroll tax changes, which drew opposition yesterday from House Ways and Means Chairman Richard Neal (D-Mass.), as well as other Democratic congressional leaders.

Trump is under increased pressure to act after days of steep losses in global markets touched off by concerns that the new coronavirus could spark a recession. U.S. stocks plunged more than 7.5% yesterday — the worst day on Wall Street since the financial crisis — as a full-blown oil price war rattled investors already on edge over the outbreak.

On paid sick leave, today’s announcement will most likely lay out an option that targets hourly wage workers who are quarantined because of the coronavirus, two of the people said. The measure may be executed through executive action rather than through legislation.

Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow will meet with Republican lawmakers Tuesday and Thursday to pitch the administration’s economic package. Saleha Mohsin, Jennifer Jacobs and Justin Sink have more on the administration’s plans.

Democratic lawmakers are working on their own package aimed at providing free testing, expanding unemployment insurance and allowing for paid time away from work, Jack Fitzpatrick and Erik Wasson report.

Neal described those three priorities yesterday and said he hopes to have a plan ready by the end of the week.

House Appropriations Chairwoman Nita Lowey (D-N.Y.) said she wants a vote in the House by the end of the week on a bill that would help people who could lose their jobs over the economic distress caused by the coronavirus. Speaker Nancy Pelosi (D-Calif.) said she isn’t sure if a vote this week is possible, but that the House may be ready to vote when they return from recess the week after next.

Coronavirus Policy Proposals: This BGOV Closer Look highlights some of the proposals that could be pursued, based on plans floated by the administration and congressional leaders as of Monday afternoon, as well as previous stimulus measures. Read more.

Business Groups to Press Trump for Response: Meanwhile, the travel, energy, manufacturing and consumer product industries are pressing the Trump administration and Congress to take decisive action to contain the economic damage from the coronavirus and plunging oil prices. Business lobbies are pushing a range of proposals such as extending unemployment insurance, broadening business entertainment tax breaks and offering tax credits to employers of quarantined workers, according to representatives interviewed by Bloomberg News. Many of the ideas are in a preliminary state as Trump’s advisers weigh their options. Ben Brody, Megan Wilson and Jennifer A. Dlouhy have more.

Photographer: Stefani Reynolds/Bloomberg
Trump and members of the Coronavirus Task Force, including Vice President Mike Pence and HHS Secretary Alex Azar, gave a briefing Monday.

Pence to Discuss Coronavirus With Health Insurers: Vice President Mike Pence invited top executives from the largest U.S. health insurers to discuss the response to the coronavirus outbreak today. Among the executives invited to attend are Gail Boudreaux, the chief executive of Anthem, UnitedHealth Group chief executive Dave Wichmann, CVS Health Executive Vice President Karen Lynch and leaders from Humana, Blue Cross & Blue Shield Association, Centene, and Americas Health Insurance Plans, according to three people familiar with the matter. Also attending will be members of Pence’s task force overseeing the administration’s efforts to address the crisis, including coronavirus response coordinator Deborah Birx and Health and Human Services Secretary Alex Azar, Nick Wadhams, Jennifer Jacobs and Saleha Mohsin report.

Trump’s Claims Often Contradicted: The spread of the deadly virus is thrusting Trump’s science and health experts into the uncomfortable role of carefully — but clearly — contradicting him by offering warnings, grounded in science, about the risks from the disease and recommending some Americans alter their daily routines. In the past, aides who have dared to diverge from the president too much or express concern about his bluster and bravado — which Trump sees as leverage in high-stakes negotiations — often are ejected from the administration. But with the nation facing an unprecedented health scare, members of Trump’s coronavirus task force have taken on the burden of contradicting the president’s don’t-worry approach to the crisis. Read more from Justin Sink and Mario Parker.

SEC’s D.C. Employees Told to ‘Telework’: The Securities and Exchange Commission is encouraging employees at its sprawling Washington headquarters to work remotely beginning today amid concern that one of the agency’s workers may have contracted the coronavirus. In an email to staff last night that was obtained by Bloomberg News, the SEC said that “out of an abundance of caution” it was requiring all people on the floor where the person sat to “telework.” The regulator said it was also reaching out to people with whom the person had been in contact, and that the agency had asked its landlord to have the area “deep cleaned.” The SEC told staff in the email that the employee hadn’t been at work since March 5 and that officials believed the person was “asymptomatic” while in the building. Read more from Ben Bain and Andrew Ramonas.

Happening on the Hill

More Lawmakers Quarantined After Virus Exposure: Rep. Mark Meadows (R-N.C.), Trump’s incoming White House chief of staff, has quarantined himself after coming into contact with someone who tested positive for the coronavirus, according to a person familiar with the matter. Meadows joins five other lawmakers who are putting themselves in quarantine or restricting their work after contact with people who tested positive for the virus.

Earlier yesterday, Reps. Doug Collins (R-Ga.) and Matt Gaetz (R-Fla.) announced that they had gone into self-imposed quarantine after learning they’d come in contact at a conservative group’s conference with an individual who subsequently tested positive for the novel coronavirus that has been spreading globally. Read more from Billy House.

Amendments Fight Stalls Senate Energy Package: Fights over amendments to a Senate energy package stalled the measure yesterday as backers were unable to get the 60 votes needed to move ahead on the bill. In a sign that supporters will try to resurrect the package, Senate Majority Leader Mitch McConnell (R-Ky.) changed his vote to “no” as part of a procedural move that maintains his ability to bring it back to the floor. The vote was 47-44, short of the 60 votes required to shut off debate. McConnell could resurrect the measure, said Sen. Rob Portman (R-Ohio). “We’re going to try to negotiate something,” Portman said. “We’re not giving up.” Read more from Dean Scott.

Startups Could Suffer Under Compensation Bill: Venture capitalists are pushing back against a Senate proposal to rein in an executive tax perk, arguing it could make it hard for startups to compete with large corporations. The proposal, from 2020 presidential candidate Bernie Sanders (I-Vt.) and Sen. Chris Van Hollen (D-Md.), represents the latest salvo Democrats have fired at deferred compensation and income from capital assets, which they see as contributing to widening wealth inequality in the U.S. Van Hollen acknowledged the initial pushback. “We are sensitive to that. Obviously we want to continue to promote startups,” he told Bloomberg Tax. “My view is there is a lot of confusion about those provisions.” Read more from Colin Wilhelm and Kaustuv Basu.

Kennedy Plans to Meet Shelton This Week: Sen. John Kennedy (R-La.) is undecided on Trump’s nomination of Judy Shelton for the Federal Reserve Board and plans to meet with her this week, an aide to the senator said. Kennedy can block the nomination by voting against it in the Banking Committee, Erik Wasson reports.

Elections, Politics & Policy

Biden Looks to Grow Lead Over Sanders: Joe Biden could take a big step closer to sewing up the Democratic presidential nomination with six primaries that could open wide leads over Sanders in delegates and support, especially in the key state of Michigan. Biden, the former vice president, is expected to sweep most of the six states voting today. He leads Sanders by 15 percentage points in the RealClearPolitics average of national polls. He leads by 23 percentage points in Michigan, which offers one-third of the 352 delegates on the table.

The other states voting today are Idaho, Mississippi, Missouri, North Dakota and Washington State. Looming over the primaries is the coronavirus and the accompanying market plunge, the biggest since the 2008 financial crisis. Gregory Korte, Tyler Pager and Jennifer Epstein preview what to watch for today.

Biden Says Voters Not Looking for Revolution: Biden argued yesterday that voters in economically distressed places are not looking for the broader “revolution” that Sanders is promising. “We’re not looking for a revolution. What we want to do is to be able to trust the water that comes out of the pipes,” Biden said in Flint, Mich., where a water crisis that began in 2014 still hasn’t been resolved. Biden focused on his hope to quickly rally the Democratic Party behind him and move on to the battle against Trump, Ryan Teague Beckwith reports.

Biden Argues He’s ‘Bridge’ to Younger Leaders: Biden said yesterday that he would be a bridge to a new generation, restoring the country’s values following Trump’s presidency and then leaving the country to younger leaders. “Look, I view myself as a bridge, not as anything else,” he said at a rally in Detroit where he was joined by three younger politicians who are all seen as contenders to be his running mate. Sens. Kamala Harris (D-Calif.) and Cory Booker (D-N.J.) as well as Michigan Gov. Gretchen Whitmer (D) have all endorsed Biden since his big wins on Super Tuesday. Read more from Jennifer Epstein.

Handshakes, Hugs Still Feature in 2020 Race: Biden is still shaking hands. Sanders is still hugging the people who introduce him. And Trump says he has no intention of halting his signature campaign rallies. Even as the surge in coronavirus cases spooked the stock market and led at least five members of Congress to quarantine themselves yesterday, it has not yet spurred the leading presidential candidates to change their campaign styles, as they stick with habits that public health experts now advise against. Read more from Ryan Teague Beckwith and Misyrlena Egkolfopoulou.

What Else to Know

LGBT Foster Care Case Could Undercut Job Bias Laws: A U.S. Supreme Court case over a Philadelphia policy that outlaws LGBT discrimination by foster care agencies with city contracts could have sweeping effects on government enforcement of anti-bias laws for the workplace and other sectors, according to some legal observers. The justices recently decided to tackle Fulton v. Philadelphia, which asks whether a policy that prohibits city contractors from discriminating based on sexual orientation infringes on First Amendment rights. Catholic Social Services says Philadelphia didn’t renew its contract after a newspaper article revealed it wouldn’t work with same-sex couples interested in fostering or adopting children. The religious foster care agency then accused the city of violating its religious rights under the U.S. Constitution. It’s another example of the clash between religious liberties and LGBT anti-discrimination rights. Read more from Paige Smith.

Infineon’s Cypress Acquisition Wins U.S. Clearance: Infineon Technologies’s $8.7 billion acquisition of Cypress Semiconductor was approved by the Committee on Foreign Investment in the United States, a small step forward for deals in an industry where regulatory and security concerns have stalled consolidation. Read more from Ian King.

Nuclear Startup Seeks Approval For Reactor: Oklo Inc., a developer of advanced nuclear technology, is seeking U.S. regulatory approval for a new variety of small reactors that could run on radioactive waste. The company expects to submit its application to the Nuclear Regulatory Commission this week, according to Chief Executive Officer Jacob DeWitte. Approval could come in two years, and Sunnyvale, Calif.-based Oklo’s Aurora reactor design could be in operation as soon as 2022, he said in an interview. Read more from Will Wade.

Fixing Wiring on Boeing’s 737 Max Could Take Two Weeks: Repairing wiring on the Boeing 737 Max fleet, which U.S. regulators have told the company it must do, could require a two-week repair on each of hundreds of the grounded planes. Work on the wiring is expected to be a complex job that requires extensive work, adding to the burdens on the company as it attempts to get the grounded jet back in service, said a person familiar with the discussions who asked not to be named. The plane could experience a rare but potentially dangerous failure if a handful of wires within bundles that snake through the fuselage come in contact with each other and short-circuit, the company discovered during an audit last year. Read more from Alan Levin and Hailey Waller.

Stone Jury Cites Privacy to Resist Journalist’s Inquiry: The jurors who convicted longtime Republican operative Roger Stone of lying to help Trump are challenging the effort by a right-wing journalist and provocateur to get access to their personal information — part of the broader fight over Stone’s claim that the jury was biased against him. Journalist Michael Cernovich is trying to gain access to the jurors’ responses to a series of questions before the trial to vet who could be impartial. A lawyer appointed by the Washington judge presiding over the case to represent the jurors is pushing back. Read more from Erik Larson.

To contact the reporter on this story: Zachary Sherwood in Washington at zsherwood@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com