What to Know in Washington: Small Business Loan Talks Continue

A standoff in Congress over funding for hospitals, state and local governments that has hindered prospects of a deal to inject new funding into an overwhelmed small business loan program may be near a resolution, after staff of Senate Minority Leader Chuck Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) talked to Treasury Secretary Steven Mnuchin and officials yesterday.

The parties agreed to continue talks today, according to a senior Democratic aide, Laura Litvan reports.

Schumer and Mnuchin spoke earlier yesterday, amid mounting pressure on Capitol Hill to add more funds to the Paycheck Protection Program and before state governments facing a revenue crunch start slashing budgets, Litvan, Steven T. Dennis and Billy House report.

Republicans want to limit action now to adding $250 billion to the small business aid plan, a key part of the $2.2 trillion stimulus passed late last month. Democrats want an additional $250 billion for state and local governments and hospitals, changes to the small business program, more money for other loan programs that are running out of money and a boost to food stamp benefits.

McConnell and House Minority Leader Kevin McCarthy (R-Calif.) in a press release last night said the Treasury Department and the Small Business Administration informed them the loan program would “exhaust its funding in a matter of hours.”

“This did not have to happen,” the Republicans said.

Mnuchin and SBA head Jovita Carranza last night said the agency won’t be able to issue new stimulus loan approvals “once the programs experience a lapse in appropriations.”

They urged Congress to provide funds for the paycheck program “at which point we will once again be able to process loan applications,” Ben Livesey reports.

Photographer: Yuri Gripas/Abaca/Bloomberg
Mnuchin at a White House Coronavirus Task Force briefing on Monday.

Pelosi, McConnell Yet to Pick Stimulus Overseers: Pelosi promises that a five-member oversight commission to police a major part of the massive coronavirus relief programs “will be in place,” but after two weeks just one member has been appointed.

The reasons for delay in choosing the chairman and three additional members aren’t clear. The deadline is less than a month away for the first report by the commission, which will oversee about $500 billion of aid — loans, loan guarantees, and investments — to affected industries, including airlines.

Schumer is the only one of the four top House and Senate leaders to make his appointment, naming Bharat Ramamurti, on April 6. Pelosi, McConnell and McCarthy also name members to the commission, and Pelosi and McConnell will jointly choose a chair.

The commission, which is to designed operate for five years, was established in the $2.2 trillion rescue package passed late last month. It’s modeled after a similar temporary oversight commission that reviewed the Troubled Asset Relief Program during the 2008 economic crisis. Read more from Billy House.

Ramamurti asked the Federal Reserve for information on the trillions in emergency loans that the central bank plans to extend to businesses, Saleha Mohsin and Billy House report. He said in a letter to Fed Chairman Jerome Powell the bank had not “announced what information it will publicly release” about its dealings with private companies, or even whether it would release the names of individual beneficiaries.”

“I write to respectfully request that the Federal Reserve publicly release detailed and timely information about each individual transaction,” Ramamurti said in a four-page letter, which was released yesterday and includes a long list of bullet points and requests. “The public deserves to know which companies are receiving taxpayer-backed lending through the Fed and on what terms.”

Charitable Giving Perk May Be in Next Relief Bill: Nonprofit groups want Congress to expand the tax break individuals can get for donating to charities, citing the crucial role the entities are playing during the pandemic. Calls are building for an expanded charitable giving deduction, which mean individuals could claim the perk regardless of whether they itemize their taxes. The third relief package passed in March made a $300 deduction available for those who claim the standard deduction. But nonprofit advocates hope the next package goes further. Read more from Kaustuv Basu.

Dems Want Profit Restrictions for Virus Vaccine: The next coronavirus package must include “anti-profiteering” language that would deny any single drugmaker the exclusive right to produce a vaccine or treatment for Covid-19, four senior House Democrats said. Democrats Jan Schakowsky (D-Ill.), Lloyd Doggett (D-Texas), Rosa DeLauro (D-Conn.), and Peter DeFazio (D-Ore.) said in a press conference yesterday they’re concerned drug companies may price out many Americans if they’re given patent protections for a Covid-19 vaccine or therapeutic.

House Democrats didn’t succeed in getting similar provisions included in earlier coronavirus packages, with pushback from lawmakers who fear it could reduce incentives for companies to develop a vaccine against the virus that’s now killed more than 27,000 people in the U.S. Read more from Alex Ruoff.

What to Watch Today

Trump participates in a call at 8:30 a.m. with G7 leaders on Covid-19 response.

Trump hosts a call with members of the House at 10 a.m., and members of the Senate at 11 a.m.

Speaker Pelosi hosts a press conference at 12:15 p.m.

The Senate will meet at 3 p.m. in a pro forma session.

Trump hosts a video conference at 3 p.m. with governors on Covid-19 response and economic policies.

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

Trump Plans Reopening with Virus Seen Hitting Peak

Trump said he will unveil guidelines to relax stay-at-home rules on today, citing signs that the coronavirus outbreak is plateauing in parts of the country. “The battle continues, but the data suggests that nationwide we have passed the peak on new cases,” Trump said yesterday at a Rose Garden press conference, Mario Parker and Michelle Fay Cortez report.

Though top executives from some of America’s biggest companies pressed Trump to move toward reopening the U.S. economy, they urged him to ensure that robust testing regimes are in place, according to people familiar with the discussions.

Trump held a marathon series of calls on yesterday with hundreds of U.S. business leaders to discuss the coronavirus outbreak, after rejecting a separate plan to create a smaller economic task force. In a call with financial services, hospitality, food and beverage companies, and retailers, executives said the U.S. needs more virus testing capacity so people feel comfortable returning to work. Some said they’re trying to secure their own capabilities, a person familiar with the matter said.

Trump told the executives the government might soon announce the availability of a saliva test for Covid-19, which the CEOs said could be a positive development to keep employees safe once they return to work, according to another person briefed on the call. The Food and Drug Administration has approved a saliva test developed by Rutgers University and others for emergency use. Read more from Jordan Fabian and Jennifer Jacobs.

Trump’s Claims Collapse When Met by Limits on Powers: Trump said Monday he had the “ultimate authority” to dictate to states how to reopen their economies, and that he’d craft his plans with advice from a council of top business, medical, and political leaders. By Wednesday, both claims fell apart. For the president, that’s becoming a pattern.

Trump’s public statements on the coronavirus outbreak show him running into the limits of his power, as well as his ability to bend events, politicians and even the national narrative to his will. While he’s previously used his political standing and bluster to compel cabinet members and fellow Republicans to carry out his wishes, he’s found a virus that’s killed more than 27,000 Americans so far to be undeterred by his usual tactics. Read more from Justin Sink.

Economic Actions & Industry Pains

Jobs Collapse Worsens With Gig Workers Stuck in Limbo: Unemployment claims data due today will likely show a deepening toll from the coronavirus, which has destroyed jobs at an unprecedented pace in the economy’s worst rout since the Great Depression. Extending jobless benefits to the self-employed, who wouldn’t ordinarily qualify, was a key part of the $2 trillion rescue package known as the CARES Act approved by Trump and Congress last month. But unemployment insurance in America is a patchwork of 50 state-level operations, and they need time to catch up. In Virginia, for example, officials say their new system to handle claims by the self-employed and contractors will be up and running within weeks. Read more from Shawn Donnan, Reade Pickert and Catarina Saraiva.

Dead People Get Virus Checks: The federal government’s economic stimulus payments are being distributed to a wide swath of Americans, including some who are recently deceased. When the money reached many Americans’ bank accounts yesterday, some recipients were surprised to find payments for their spouses or parents who had passed away. It’s an expected consequence of a program passed with urgency and meant to cover as many people as possible. The IRS is relying on data that’s as old as 2018 in some cases, resulting in dead people included in the payments. Laura Davison and Erik Wasson have more.

Perdue Sees ‘Plenty of Food’ Amid Disruptions: Agriculture Secretary Sonny Perdue assured Americans the country has “plenty of food” after coronavirus closings at major meat-processing plants focused fresh attention to strains in the supply chain. “The bare store shelves that you may see in some cities in the country are a demand issue and not a supply issue,” Perdue said at the White House briefing yesterday. “It has taken us a few days” for food companies to address a “misalignment” in distribution as restaurants close and more food is sold through grocery stores, he said. Read more from Mike Dorning.

  • Meanwhile, employers of seasonal agricultural guest workers will get some flexibility in the Department of Homeland Security program so they can hire workers during the coronavirus pandemic through a lifting of requirements on H-2A visas. Read more from Genevieve Douglas.

Governors Ask Trump to Waive Biofuel Quotas: Five American governors are asking the Trump administration to waive U.S. biofuel-blending requirements, arguing the cost of complying with the mandates on top of coronavirus-spurred lockdowns pose “severe economic harm” to the country. The governors, such as Greg Abbott of Texas and Gary Herbert of Utah, made their plea in letters to the Environmental Protection Agency, which now has 90 days to decide on the matter. Louisiana Gov. John Bel Edwards lodged his request earlier, on April 7. Govs. Kevin Stitt of Oklahoma and Mark Gordon of Wyoming also are pushing for relief. Read more from Jennifer A. Dlouhy and Michael Hirtzer.

Mnuchin Urged on Nonbank Mortgage Servicers: Key Democrats called on Mnuchin and Powell to make sure that nonbank mortgage servicers have sufficient liquidity to weather a wave of missed payments as borrowers cope with the impact of the crisis. “Mortgage servicers are expected to face increased strain as millions of homeowners and renters lose jobs, are furloughed, or see reduced hours, all of which will keep them from making mortgage and rent payments, as a result of this public health crisis,” Senate Banking Committee ranking member Sherrod Brown (D-Ohio) and House Financial Services Chairwoman Maxine Waters (D-Calif.) said. Read more from Elizabeth Dexheimer.

Also Happening Off the Hill

Trump Claims Untested Power to Adjourn Congress: Trump threatened yesterday to try to force both houses of Congress to adjourn—an unprecedented move that would most likely raise a constitutional challenge—so he can make appointments to government jobs without Senate approval.

“If the House will not agree to that adjournment, I will exercise my constitutional authority to adjourn both chambers of Congress,” Trump said yesterday during a White House press briefing. “And perhaps it’s never been done before, nobody is even sure if it has, but we’re going to do it.”

During an adjournment, presidents can make temporary appointments without Senate approval. But they can’t make recess appointments when the Senate adjourns for only a few days. It was not clear that a president has the authority to force Congress to adjourn, and Trump would be sure to face fierce opposition to any such move from lawmakers at the Capitol.

Presidential historian Michael Beschloss tweeted yesterday: “No President in history has ever used the Constitutional power to adjourn Congress.” Read more from Mario Parker and Justin Sink.

Former Lawmakers Hold Remote Hearing Test: Dozens of former Congress members are hosting a mock remote hearing today to spotlight how Congress can continue its work online during the global coronavirus pandemic.

The goal of the event is to test the logistics and pitfalls of how a hearing would work virtually, since the House and Senate are not scheduled to resume work in Washington until May 4. The pressure to allow more remote activities mounted in recent days as Congress negotiates further rounds of relief funding to aid an economy crippled by social distancing. With lawmakers at home, work on the legislative agenda has slowed.

The hearing will be hosted by an advocacy group and led by former Reps. Brian Baird (D-Wash.) and Bob Inglis (R-S.C.). The witness list features representatives from Zoom, Microsoft, former CIA director Gen. David Petraeus, and others. Read more from Rebecca Kern.

Politics and Elections

Trump Fundraising Machine Slowed as Virus Spread: Two committees that support Trump’s re-election campaign combined to raise $136 million in the first quarter, though the coronavirus pandemic sharply cut their intake in March, filings at the Federal Election Commission show. While Trump continues to enjoy a wide financial advantage over presumptive Democratic nominee Joe Biden, the $63 million the president’s committees raised in March was down 27% from February. Social distancing and stay-at-home orders may have slowed fundraising, which started kicking into high gear in January as the Senate acquitted Trump of impeachment charges.

Two committees, Trump Victory and Trump Make America Great Again, helped the president and the Republican National Committee bring in $212 million in the first quarter. Read more from Bill Allison.

Warren Says She’d Accept A Biden VP Offer: A series of endorsements from Sen. Bernie Sanders (I-Vt.), former President Barack Obama and Sen. Elizabeth Warren (D-Mass.) this week cemented the Democratic Party behind Biden as the presumptive nominee and demonstrated the careful calculus of party leaders to unite its once-warring progressive and moderate wings. Yesterday evening, Warren answered with an emphatic “yes” when asked by MSNBC’s Rachel Maddow whether she’d accept an offer from Biden to be his running mate. Read more from Tyler Pager.

  • Meanwhile, Biden’s campaign signaled to donors yesterday that they should direct their money to a longstanding Democratic super political action committee rather than a group founded to support the former vice president during the primaries. Priorities USA, a super PAC created in 2011 for Obama’s re-election, “is an organization of proven effectiveness and the work they are doing to elect Joe Biden and defeat Donald Trump is absolutely critical,” the campaign said in a statement. Read more from Tyler Pager and Bill Allison.

Biden Says Trump Having ‘Temper Tantrums’: Biden unloaded on Trump yesterday for “having temper tantrums” and failing to empathize with Americans suffering from the effects of the coronavirus or the collapsing economy, offering his sharpest critique yet of Trump’s crisis response. The former vice president and presumptive Democratic nominee urged Trump to change course, use his bully pulpit to set a better example for the country and flex the authority of the presidency to further mobilize the federal government to fight the virus. Read more from Jennifer Epstein.

Texas Ordered to Allow All Votes By Mail, ACLU Says: Texas must let any registered voter afraid of catching the coronavirus vote by mail in upcoming elections, a state court in Austin ordered Tuesday, according to the American Civil Liberties Union. The bench ruling came hours after Texas Attorney General Ken Paxton, a Republican, stated that voters without physical conditions or illnesses that prevent their voting at the polls will be denied mail-in ballots. The fight will undoubtedly draw the attention of Trump, who’s expressed displeasure with mail-in ballots, believing them to be a source of voter fraud. Read more from Laurel Calkins.

Michigan Redistricting Commission Prevails: The Michigan Republican Party and other local citizens failed Wednesday to convince the Sixth Circuit to revive their lawsuits on the state’s new Independent Citizens Redistricting Commission, because the eligibility criteria for serving on it were constitutional. The individual activists and the state GOP challenged the commission based in part on the fact that various classes of individuals were barred from serving as commissioner to avoid political conflicts of interest. Read more from David McAfee.

What Else to Know Today

Government Staff Say They’re Forced to Come In: Long before the coronavirus, the Trump administration tried to rein in telework across federal agencies, using policies and collective bargaining proposals to restrict employees’ discretion to work from home. Now, as a pandemic sweeps the nation, employees at federal and state government agencies say the same insistence on in-person work is putting their health at risk. Along with failing to provide protective equipment for critical workers, public employees say, agencies are requiring them to come into the office to perform tasks that could be done remotely or put off until it’s safe. Thousands of government employees have contracted Covid-19. Read more from Josh Eidelson and Polly Mosendz.

Trump Asked to Step Into Ligado Request: Senate Armed Services Chairman Jim Inhofe (R-Okla.) and top Democrat Jack Reed (D-N.H.) urged Trump yesterday to prevent the Federal Communications Commission from approving a request from Ligado Networks to use frequencies they claim will “interfere” with GPS reception. “Ligado’s planned usage will likely harm military capabilities, particularly for the U.S. Space Force, and have major impact on the national economy,” Inhofe and Reed wrote in a letter to Trump. Read more from Ben Livesey.

U.S. Says Iranian Ships Harassed Navy: Iranian ships repeatedly harassed and approached American vessels conducting operations in the Persian Gulf before disengaging after multiple warnings, according to U.S. Central Command. More than 10 ships with Iran’s Islamic Revolutionary Guard Corps repeatedly crossed the bows and sterns of the American vessels at extremely close range and high speeds yesterday, U.S. Naval Forces Central Command Public Affairs said. The “dangerous and provocative actions increased the risk of miscalculation and collision,” according to the statement, which added that U.S. commanders on the scene “retain the inherent right to act in self-defense.” Glen Carey has more.

Russia Missile Test Is Threat to U.S. Assets: Russia tested a direct-ascent anti-satellite missile yesterday that was tracked by the U.S. military, Gen. John Raymond, commander of Space Force and U.S. Space Command, said in a statement. “Test is further proof of Russia’s hypocritical advocacy of outer space arms control proposals designed to restrict the capabilities of the United States while clearly having no intention of halting their counterspace weapons programs,” Raymond said.

China Rebuffs U.S. Accusation on Nuclear Test-Site Activity: China rebuffed a U.S. accusation that it had maintained activity at a nuclear weapons test site, with a foreign ministry spokesman saying the country was upholding its commitment to the international testing ban. In a summary of an annual report assessing global arms-control agreements, the U.S. State Department said yesterday that China “maintained a high level of activity” at its Lop Nur test site in the western region of Xinjiang. The report noted “possible preparations” to operate the site year-round and “concerns” that China wasn’t complying with standards adhered to by the U.S., France and the U.K.

“The U.S. neglects all the facts and makes wanton accusations against China,” foreign ministry spokesman Zhao Lijian said during a briefing today in Beijing. “This is irresponsible and ill-intentioned.” Read more.

Nuke Crews Pull Longer Tours: Air Force personnel manning nuclear missile silos in the U.S. heartland are performing rotations as long as 14 days. Fighter pilots on alert for immediate defense of the U.S. are kept in near-isolation. It’s part of the “new abnormal” for the Air Force as it ensures smooth functioning during the outbreak, according to General David Goldfein, the service’s chief of staff. As the outlines of the pandemic became evident, “we did a reset,” he said. “We’ve got to adapt faster than the virus.” Read more from Tony Capaccio.

Trump Challenge to Mercury Curbs: The Trump administration is preparing to wage an attack on the legal basis of requirements to capture mercury and other heavy metal pollution from power plants, potentially setting the stage for a court to toss the mandates out altogether. The move could come as soon as today in the form of a final EPA rule concluding those mercury pollution controls are too costly to justify and no longer “appropriate and necessary,” two people familiar with the matter said. Read more from Jennifer A. Dlouhy and Amena Saiyid.

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