What to Know in Washington: Standoff Over Small Business Funds

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Democrats are holding firm to their demand that a $250 billion economic stimulus for small businesses must include more funds for hospitals, states and localities struggling with the coronavirus pandemic, leaving congressional leaders at a standoff for now.

There were no immediate plans for negotiations among Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and other top leaders after Democrats yesterday rejected McConnell’s bid to pass only the funds for the Paycheck Protection Program for small businesses.

Treasury Secretary Steven Mnuchin requested approval of the $250 billion by week’s end, but Democratic leaders in both chambers insisted on supplementing those funds with $100 billion for hospitals and $150 billion for state and local governments.

Hospitals and localities “are hemorrhaging money and paying for the coronavirus costs,” Pelosi said on CNBC’s “Mad Money” program. She said there’s “plenty of room for negotiation.”

The dispute raised questions about when Congress would be able to act. Senate rules require unanimous consent to pass anything quickly, giving any one senator the ability to gum up the works.

If leaders find a path forward, Monday may be the next chance to quickly approve more aid in the Senate without objection. Lawmakers aren’t scheduled to return to Washington until the week of April 20. Read more from Laura Litvan and Billy House.

What to Watch

The House will meet for a pro forma session at 9 a.m.

The White House will hold a Coronavirus Task Force press briefing at 1 p.m.

Economic Actions & Industry Pains

S&P 500 Posts Best Week Since 1974: Markets this week were energized by progress in efforts to stem the spread of the coronavirus and the Federal Reserve’s measures to cushion the economic fallout. The S&P 500 Index surged 12% — its biggest weekly advance since 1974 — while the Dow Jones Industrial Average gained 13% and the Nasdaq Composite Index 11%. Still, the S&P 500 and Dow are down double-digits this year, while the Nasdaq has pared losses to 9%.

Pence, CDC Head Lay Out Virus Criteria to Reopen U.S.: Vice President Mike Pence and Centers for Disease Control and Prevention Director Robert Redfield said reopening the country’s economy hinges on the government seeing major communities at the end of their coronavirus outbreaks and developing treatments for the disease, among other hurdles. The country also should have widespread testing available, therapeutics for Americans who contract the disease, and guidance from the CDC on how large and small businesses can operate safely, Pence said last night at a White House briefing.

Redford later in an interview on CNN said officials need to understand the spread of the virus, strengthen public health infrastructure, prepare hospitals and other medical facilities, and foster a belief among Americans that it’s the right time to do this. Read more from Mario Parker and Josh Wingrove.

Meanwhile, The White House is considering whether to create a working group focused on reviving the U.S. economy after the coronavirus pandemic eases, and whether the panel should include private-sector representatives. The new group would be separate from the coronavirus task force led by Pence, even though it may include some of the same members.

The discussions are in their early stages, according to three people familiar with the matter. White House Chief of Staff Mark Meadows has also asked Trump’s daughter and senior adviser Ivanka Trump to join the group, one person said. All of the people spoke on condition of anonymity because the discussions are ongoing. Read more from Jennifer Jacobs and Jordan Fabian.

Defense Contractors Keep Most Plants Running: The Pentagon’s contractors have largely avoided widespread closings or “major impacts” so far from the coronavirus pandemic, according to a running tally compiled by its contracts management office. Of 10,509 locations tracked or monitored by the Defense Contract Management Agency, 135 had closed at some point as of Wednesday. Forty-nine of those reopened after an average of about 10 days.

“These closures have generally been short-term in order to clean facilities” or to “reduce the potential exposure of employees,” agency spokesman Matthew Montgomery said in a statement. The agency doesn’t track how many workers are affected, he said. And the numbers on closings don’t reflect defense contractors that have cut back their operations — or the outsized impact of Boeing’s shutdowns. Read more from Tony Capaccio.

Growing Number of Pilots Grounded: Hundreds of pilots and flight attendants at major U.S. airlines have tested positive for coronavirus infection, according to unions representing the workers. They’re part of an increasing number of in-flight workers who are being sidelined by the coronavirus. Airline flight crews should be considered first responders with priority for protective equipment, a spokesman for the Allied Pilots Association said. Airlines also need to beef up health screenings for crews and passengers, including priority testing for crew members, said the spokesman, whose union represents about 15,000 pilots at American Airlines. Read more from Louis C. LaBrecque.

  • Trump said he may unveil a bailout proposal for the beleaguered U.S. airline industry this weekend. The president said at a White House briefing that he met with Mnuchin and Transportation Secretary Elaine Chao to work on details of the proposal. Airlines have been frustrated by delays in U.S. aid after being virtually shutdown by the coronavirus. Some of those carriers are depending on federal funds to meet payroll obligations next week and face the prospect of furloughing workers. Read more from Mario Parker.

Farm Aid Seen Next Week: Trump said in a tweet last night he has asked his agriculture secretary to “use all of the funds and authorities at his disposal,” to aid U.S. farmers, whose financial peril has worsened in the coronavirus pandemic. The administration plans to announce an aid package next week, according to people familiar with the discussions. Trump’s tweets did not provide specifics, but the coronavirus relief bill Congress passed last month includes $23.5 billion in aid for farmers. So far, it hasn’t been clear how all of those funds will be distributed. Read more from Mike Dorning.

Research, Treatment & Coordination

States Lash Out at FEMA Over Supplies: The fierce competition for crucial medical supplies is fueling confusion and suspicions between the states and federal government over conflicting priorities and drawing allegations of political favoritism by the Trump administration.

In Colorado, the tension boiled over when the state tried to secure ventilators for an expected spike in critically ill patients. Colorado Gov. Jared Polis (D) made a direct plea to Pence late last month for help in securing 10,000 ventilators and millions of masks and other protective equipment. When that request went unfulfilled, the state bought 500 ventilators from a private contractor. But the Federal Emergency Management Agency also needed the ventilators. The agency used its authority to jump to the front of the line, according to Colorado officials, and purchased the equipment.

It’s a situation being played out around the country as governors complain of shortages, delays and confusing demands as they try to supply hospitals beset by critically ill patients. Daniel Flatley, Polly Mosendz and Vincent Del Giudice have more.

  • House Energy and Commerce Chairman Frank Pallone (D-N.J.) blasted FEMA for issuing an advisory yesterday requiring states to petition the federal government to continue supporting certain testing sites by the end of the day. Pallone asked the Trump administration to give states more time to decide if they want to take over managing Community-Based Testing Sites that the federal government has so far run and used to test nearly 80,000 Americans. Read the statement here.

Pentagon Sends First Body Bags: The Pentagon has delivered 37,000 body bags over the last week to the Federal Emergency Management Agency, which is seeking 100,000 to help address the pandemic. The Defense Logistics Agency provided what the military calls “human remain pouches” from a combination of its stockpile and expedited shipments from its current provider. In addition, the agency placed orders for 63,000 more of the bags to fulfill the remainder of FEMA’s request, Patrick Mackin, a DLA spokesman, said yesterday in an email. Read more from Tony Capaccio.

Foreign Affairs

Trump Touts Tentative Russia-Saudi Pact: Trump said a tentative agreement between Riyadh and Moscow to cut global oil production is a “very acceptable agreement.” The two nations are “getting close to a deal,” Trump said yesterday. Trump held a conference call with with Russia’s Vladimir Putin and Saudi Crown Prince Mohammed bin Salman just before the remarks. “It was a very good call.” Russia and Saudi Arabia agreed in principle to slash oil production, a move that could help U.S. producers that were devastated by the two countries’ month-long price war. Read more from Jordan Fabian and Mario Parker.

Virus Disinformation by Russia, China: The Justice Department is tracking disinformation campaigns worldwide by Russia and China aimed at sowing divisions over the coronavirus crisis, according to John Demers, head of the department’s national security division. The disinformation operations could fuel confusion and division in the U.S. and other Western countries, Demers said yesterday. The Russian government’s objective appears to be aimed at weakening the EU and NATO, in ways parallel to the Kremlin’s effort to interfere in the 2016 U.S. election, he said. Read more from Chris Strohm.

UN Chief Urges Pandemic Action: United Nations Secretary-General Antonio Guterres urged members of the Security Council to come together to fight the global coronavirus outbreak, marking the first time the divided 15-nation body discussed the pandemic. “The engagement of the Security Council will be critical to mitigate the peace and security implications of the Covid-19 pandemic,” said Guterres in a closed-door video conference. “A signal of unity and resolve from the Council would count for a lot at this anxious time,” he said in a text released by his office. Read more from David Wainer.

What Else to Know Today

Fiscal 2021 Spending Bills Move Forward: Top House appropriators have received preliminary top-line spending figures for their fiscal 2021 bills and are remotely drafting legislation to fund the government past Sept. 30, even as the coronavirus complicates their work.

Several key lawmakers have suggested amending last year’s two-year budget caps agreement to exempt certain programs from spending limits, which could allow for a boost to biomedical programs without triggering cuts elsewhere. For now, though, House Appropriations Chairwoman Nita Lowey (D-N.Y.) has assigned subcommittee leaders top-line allocations, and the committee plans to hold markups “when Congress returns to Washington,” Evan Hollander, Lowey’s spokesman, said in a statement yesterday. Jack Fitzpatrick has the latest update on the state of FY21 spending work.

Worries That Coronavirus-Prompted Rule Changes Go Too Far: State and federal governments are using the ongoing global pandemic to pursue deregulation and political priorities, a trend that has prompted protests. Some of the rule changes are based on common sense—like allowing hand sanitizers of up to 12 ounces on airplanes—while others are seen as threats to public health and safety. And most contain elements of both, raising hard questions about how far the government should go when it comes to fighting a deadly virus.

There are instances where it makes sense to roll back or ease regulations, said Amit Narang, a regulatory policy advocate at Public Citizen. But there is a limit, particularly when it comes to the environment. “On the EPA side, we’re seeing the oil and gas industry pushing for basically short-term extensions across the board on pollution regulations,” he said. Read more from John Dunbar.

Biden’s Overtures to Sanders: A day after Sen. Bernie Sanders (I-Vt.) dropped out of the presidential race, former Vice President Joe Biden signaled support for two new progressive policies as he seeks to unite the Democratic Party around him. Biden said he supported lowering the Medicare eligibility age to 60 from 65 and forgiving student debt for low-income and middle-class individuals who have attended public colleges and universities.

“Senator Sanders and his supporters can take pride in their work in laying the groundwork for these ideas, and I’m proud to adopt them as part of my campaign at this critical moment in responding to the coronavirus crisis,” Biden said in a statement. Read more from Tyler Pager.

N.H. Judge Strikes Down Registration Law: A controversial New Hampshire voter registration law backed by Gov. Chris Sununu (R) was struck down yesterday as unconstitutional. Superior Court Judge David Anderson ruled that the 2017 law placed an unreasonable burden on the right to vote and violated equal protection under the state’s constitution. People who wanted to register to vote within 30 days of an election had to provide residency documents under the law that otherwise wouldn’t be required. Read more from Adrianne Appel.

Texas Abortion Ban Narrowed: Some abortions in Texas will be permitted to resume under an Austin judge’s ruling narrowing the scope of a temporary ban enacted by the state to conserve medical resources during the pandemic. The court order lets clinics perform medication abortions that don’t require masks and gloves as well as surgical abortions for women whose pregnancies will be too advanced by the time the governor’s ban expires. The clinics said they have had to turn away hundreds of patients since Texas clamped down.

U.S. District Judge Lee Yeakel’s latest order risks drawing a second rebuke from the New Orleans-based federal appeals court, which on April 7 blasted him for siding with the clinics in their challenge to Texas Gov. Greg Abbott’s (R) directive March 22 to preserve hospital beds and personal protective gear for treating Covid-19 patients. Yeakel said his order expires on April 19 unless he extends it. Read more from Laurel Brubaker Calkins.

Economists See Flaws in Plan to Gut Pollution Rule: By proposing to obliterate the legal justification for restricting toxic mercury pollution from power plants, the U.S. Environmental Protection Agency has flouted bedrock practices that have driven federal policymaking for decades, according to a group of resource economists writing in the journal Science. Read more from Eric Roston.

Border Patrol’s Texas Tent Facility: A temporary Customs and Border Patrol tent facility in Texas was over-staffed, underutilized and cost the federal government millions in unneeded food services during a five-month period, according to a government watchdog report. “CBP paid approximately $66 million in total for the facility services and leveraged significant federal personnel resources,” despite “holding an average of 30 detainees per day—about 1 percent of the facility’s capacity,” the Government Accountability Office said in a report released yesterday, Shaun Courtney reports.

Democrats Want Child Migrant Deportations Halted: House Homeland Security Chairman Bennie Thompson (D-Miss.) and Border Security Subcommittee Chairwoman Kathleen Rice (D-N.Y.) in a letter to the Department of Homeland Security said the department cannot deport unaccompanied child migrants without legal due process despite border restrictions implemented during the pandemic. A policy change the department informed the committee of April 2 to deport more migrant children who arrived without parents or legal guardians is also illegal, the Democrats said. Read the letter here.

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

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