What to Know in Washington: Donors Press Congress on More Giving

A group of philanthropists is asking Congress to require foundations and other charitable groups formed by affluent donors to give more to charitable causes to combat the economic downturn caused by the coronavirus pandemic.

Walt Disney heiress Abigail Disney, Susan and Regan Pritzker of the billionaire Pritzker family, and early Google software developer Ning Mosberger-Tang are among more than 260 philanthropists asking Congress to increase the minimum amounts that private foundations and donor-advised funds donate to charities each year.

Higher donation mandates for the next three years would send about $200 billion in additional money to charities without costing taxpayers anything, because those donors have already taken the deduction for those gifts, said Scott Wallace, co-chair of the Wallace Global Fund, who is part of the Patriotic Millionaires group that’s advocating the change.

The plan would double the mandatory amount that private foundations must donate to charities each year to 10% of their total assets, up from 5%. It would also require donor-advised funds — entities that allow tax deductions on donations without distributing the money — to give 10% of their assets to charity. Donor-advised funds currently don’t have any minimum donation requirements.

The change would apply to 86,000 private foundations, including the Ford Foundation and the Lilly Endowment, and 728,000 donor-advised funds, the Patriotic Millionaires group says.

“This is a terrific way to inject a boatload of money into the economy,” said Wallace, whose grandfather Henry A. Wallace — founder of the global fund — was vice president in Franklin D. Roosevelt’s administration. “There is soon going to be trillion-dollar fatigue in Congress and there will be a great appetite for stimulus measures that are free.”

The measure is nowhere near becoming law. Wallace said the philanthropists’ group is working to get a bipartisan group of senators to sign onto the idea. Read more from Laura Davison.

Happening on the Hill

Treasury Has Spent Small Part of Aid: The Treasury Department has spent only $37.5 billion thus far of a $500 billion pool of funds Congress provided to help struggling businesses, including airlines, during the pandemic, according to a congressional watchdog panel’s report. The figures, released yesterday, show Treasury has been slower to deploy cash for corporations than in providing separate stimulus payments and small-business loans, even as officials at the White House predict a 40% decline in GDP in April through June. More than 36 million people have lost jobs over eight weeks.

About $454 billion of the $500 billion is intended for the U.S. Federal Reserve to create emergency lending programs for businesses. Of that amount, the report said, $185 billion has been committed including $37.5 billion that has been sent to the central bank, which began purchasing some assets with the money last week. Treasury Secretary Steven Mnuchin said in prepared testimony for Congress, released after the report, that as much as $195 billion in credit support has been committed. He’s scheduled to appear before a Senate committee today with Fed Chairman Jerome Powell to talk about the rollout of the virus relief Cares Act. Read more from Laura Davison and Billy House.

Powell, meanwhile, said the central bank is prepared to use all available means to leave the benchmark lending rate near zero until the economy is back on track.

“We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response,” Powell said in his prepared remarks. “We expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals.” Read more from Craig Torres.

  • IRS Begins to Take Telephone Questions About Stimulus Payments: The IRS will begin to take telephone calls with questions about stimulus payments, but recipients could still expect long waits and may be unable to get answers to complicated inquiries. About 3,500 IRS workers started answering phone lines yesterday after weeks of shuttering call centers during the virus outbreak. Read more from Laura Davison.
  • Expediting Stimulus Watchdog Hiring Rules: A bipartisan group of senators is introducing a bill that would permit the Special Inspector General for Pandemic Recovery to fast track hiring staff to oversee how coronavirus stimulus funding is spent. The legislation would allow the new watchdog office to bypass normal federal hiring requirements, according to an emailed statement yesterday. Read more from Laura Davison.

Rubio to Replace Burr on Intelligence Panel: Senate Majority Leader Mitch McConnell (R-Ky.) named Sen. Marco Rubio (R-Fla.) to be acting chairman of the Intelligence Committee, replacing Richard Burr (R-N.C.), who stepped aside amid a federal probe into his stock trading. McConnell said he expects Rubio to “help ensure the intelligence community stays ahead of our adversaries, out of politics, and out of the press.”

McConnell said earlier yesterday that the committee this week will advance the nomination of Rep. John Ratcliffe (R-Texas) to become the director of national intelligence. Steven T. Dennis has more.

Senate Panel to Consider Possible FBI Subpoenas: The Senate Judiciary Committee will hold a June 4 vote on whether to authorize possible subpoenas of James Comey, Andrew McCabe, James Clapper, John Brennan, Sally Yates and other people as it probes how the FBI conducted its investigation of links between Trump’s associates and Russian officials, said Chairman Lindsey Graham (R-S.C.). Read more from Steven T. Dennis and Billy House.

CFTC Pressed Over Carbon Fees: Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii) called on the Commodity Futures Trading Commission to include carbon emissions pricing and the role of federal financial regulators in an upcoming report on the risks of climate change to U.S. markets. Jacob Rund has more.

The Path to Reopening

Trump Hails Progress on Vaccine as Restaurants Seek Relief: Trump assured restaurant owners that therapies and a vaccine for the coronavirus and a tax cut would restore their businesses, after they asked him to broaden a small-business lending program. The U.S. coronavirus outbreak has heavily damaged the restaurant industry, which saw most dining room business evaporate as customers confined themselves to their homes in fear of infection. Millions of restaurant workers have lost their jobs since March.

Jose Cil, the chief executive of Burger King parent company Restaurant Brands International, told Trump in a meeting at the White House on Monday that the Paycheck Protection Program should be extended so that the loans can be spent over 24 weeks instead of eight. Several other restaurateurs agreed. Justin Sink and Jordan Fabian have more.

  • Trump called plans by Los Angeles County’s leaders to extend their stay-at-home order into the summer a “death wish.” Trump remarked to restaurateur Thomas Keller during a meeting yesterday at the White House that he had heard Los Angeles planned to stay closed until August. “That’s a death wish,” Trump said. “Because there’s death in both sides.” Keller responded he wasn’t located in L.A. Read more from Justin Sink and Jordan Fabian.

Trump Threatens WHO With Permanent Cutoff: Trump escalated his threats against the World Health Organization over its handling of the coronavirus, saying he would permanently cut U.S. funding if it does not make sweeping reforms. In a four-page letter detailing his many grievances with the WHO, Trump called on the group to “demonstrate independence from China,” renewing a complaint that led him in April to temporarily suspend U.S. funding. He posted the letter late yesterday on Twitter.

“If the World Health Organization does not commit to major substantive improvements within the next 30 days, I will make my temporary freeze of United States funding to the World Health Organization permanent and reconsider our membership in the organization,” Trump wrote to Director General Tedros Adhanom Ghebreyesus. Read more from Jordan Fabian and Nick Wadhams.

Cantwell Calls for Distancing Guidelines in Air: Sen. Maria Cantwell (Wash.), the top Democrat on the Senate Commerce, Science and Transportation Committee, is urging the Department of Transportation to “issue clear, uniform national social distancing guidelines” for the aviation industry to help protect its workers and travelers during the pandemic. Her letter follows correspondence Cantwell sent May 11 to the White House’s coronavirus task force seeking social distancing guidelines for airlines and airports, Elizabeth Elkin reports.

Guidelines for Reopening Nursing Homes: The Trump administration issued guidance that would eventually allow nursing homes to re-open to visitors—on a phased-in basis—nationwide. The guidance recommends that all nursing home staff and residents are tested for exposure to the coronavirus before restrictions are relaxed or facilities reopened. It also recommends that state agencies inspect nursing homes that had a Covid-19 outbreak before allowing reopening, according to a statement from the Centers for Medicare and Medicaid Services. The CMS guidelines say that nursing homes should be among the last to reopen within communities that are emerging from lockdowns, Tony Pugh reports.

DOD Weighing Shift Work: Pentagon workers may see shifts in schedules, the ways performance is measured, and office layouts once they begin returning to work as the pandemic eases. Senior officials are now considering changes that could be worked out and phased in for personnel after the department releases a general plan for resuming operations, said Lisa Hershman, chief management officer of the Defense Department. The initial plan to bring employees back to the Pentagon building may be completed this week, laying out conditions and steps required to ease telework. Read more from Travis J. Tritten.

Virus Hacks Risk Security Updates at Schools: With more researchers moving from the laboratory to their living room couches, now is the time for universities and other institutions combating the coronavirus outbreak to take a close, hard look at their cybersecurity strategies. Chinese hackers are interested in stealing research on vaccines and treatments for the virus, the FBI and the Cybersecurity and Infrastructure Security Agency recently said. Universities and other research institutions should assess their information technology systems and training to ensure they are protected, cybersecurity experts say. Read more from Jeannie Baumann.

Elections & Politics

Women Running for House—BGOV Podcast: Kelly Dittmar, a scholar at the Center for American Women and Politics at Rutgers University, joined the latest episode of Downballot Counts to discuss their new report, which found a record number of women have filed to run for the House. It’s the second election cycle in a row the record has been broken. Listen to the latest episode of Downballot Counts and subscribe from your mobile phone via: Apple Podcast | Overcast | Stitcher | Spotify

Warren’s Path to Becoming VP: Some Democrats worry that Joe Biden selecting Sen. Elizabeth Warren (D-Mass.) could lose them a Senate seat, opening the door for Massachusetts Gov. Charlie Baker (R) to appoint a GOP replacement. But the chances of that are slim. Read more from Joshua Green.

What Else to Know Today

Trump Says Pompeo Suggested He Remove IG: Trump said Secretary of State Mike Pompeo asked him to fire the State Department’s inspector general, Steve Linick. “I don’t know the gentleman,” Trump said yesterday at the White House. “I was happy to do it. Mike requested that I do it.” Trump notified Congress last week that he would fire Linick, saying he had lost confidence in the official. Read more from Justin Sink and Jordan Fabian.

  • Speaker Nancy Pelosi (D-Calif.) yesterday said Linick’s removal formed “part of a pattern” of “undermining the integrity of the Inspectors General and therefore our government.” Pelosi told Trump in a letter to provide a reason for Linick’s dismissal before his departure takes effect after a 30-day period, Megan Howard reports.

Trump Claims He’s Taking Anti-Malaria Drug: Trump said that he’s currently taking hydroxychloroquine, the anti-malaria drug he’s promoted as a treatment to fight a coronavirus infection. Trump said yesterday at the White House he’s been taking the drug for a week. Medical experts have cautioned against using hydroxychloroquine as the benefits against coronavirus were unproven and the treatment could carry significant harmful side effects. Justin Sink and Jordan Fabian have more.

EPA Proposes to Give Up Some ‘Guidance’ Power: The Environmental Protection Agency is moving today to restrain how it uses memos, advisories and other informal statements to shape policy — with a proposal that could open the door to court review of those guidance documents. The EPA’s proposed rule would limit the scope of guidance documents and give the public a chance to weigh in on many of them. Read more from Jennifer A. Dlouhy.

Fannie, Freddie to Hire Firms to Advise on Exiting U.S. Control: Fannie Mae and Freddie Mac issued formal announcements yesterday they plan to hire financial firms to advise them on exiting U.S. control. The mortgage giants, which have been in government conservatorship since the 2008 financial crisis, said in statements they have issued requests for proposals from financial advisers, reports Jesse Hamilton.

Apple Pushes Back on FBI: Apple pushed back against FBI Director Christopher Wray yesterday, saying it helped the government track down information about the shooter behind December’s attack at the Naval Air Station in Pensacola, Fla. Wray said earlier that Apple provided “effectively no help” in unlocking iPhones belonging to the attacker. Read more from Mark Gurman.

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; Michaela Ross at mross@bgov.com