Just before midnight on March 25, the Senate approved the estimated $2.2 trillion bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act, the third congressional bill to address the crisis. The unanimous 96-0 vote sent a strong message of unity and capped many days of around-the-clock negotiations between congressional leaders and the Trump Administration. There were challenges right up until the end, with late changes to the text of the bill and concerns among some senators that unemployment insurance provisions provide an incentive for employees to be laid off instead of working (an amendment addressing the concerns was voted on but failed).

Addressing another concern, Senate Democratic leader Chuck Schumer (D-NY) pushed back against criticism from Governor Andrew Cuomo (D) that the bill provided inadequate funds for hard-hit New York, saying while the focus of the remarks was the sum provided to the state government, important benefits will be delivered to the unemployed, small businesses, hospitals, and transit systems. Both Senator Schumer and House Speaker Nancy Pelosi (D-CA) highlighted changes they pushed for from Republican-authored drafts. "It was a trickle-down corporate bill. It is now a bubble-up workers bill," the Speaker said on CNN.

The House, which has been out of session, is planning to approve the Senate-passed bill by voice vote on Friday, March 27, according to leaders from both parties. House Majority Leader Steny Hoyer (D-MD) and Republican Whip Steve Scalise (R-LA) said in letters to their respective members that the House will convene at 9:00 a.m. on March 27 and, following debate, expect to approve the bill by voice vote (rather than calling all members back to Washington) because of factors that include protecting the safety of members and staff, preventing further spread of COVID-19, limited flight options, members participating in self-quarantine, and several states mandating stay-at-home orders.

Major sections of the CARES Act would provide small business loan-to-grants and stabilization for other businesses (with important restrictions) and states and cities, and for expanded unemployment insurance (UI). Tax provisions include direct payments to those with wages middle-income and below, deferrals of employer payroll tax liabilities coupled with an employee retention tax credit, rollbacks of TCJA limitations on net operating losses (NOLs) and the business interest limitation under IRC Section 163(j), and a TCJA fix on qualified improvement property (QIP).

On health care, the bill provides $140 billion in emergency funding to Health and Human Services (HHS), including the $100 billion requested by hospitals and health care providers for COVID-19 related expenses and losses. Other provisions allow for increased funding and flexibility throughout the emergency period and provide an extension of bipartisan Medicare, Medicaid, and public health "extenders" through November, among other things.

Attention will next turn to a congressional bill #4 to address the crisis that members from both sides expect will be needed, though there is currently no clear idea of the scope or timing of the next measure. Senate Majority Leader Mitch McConnell (R-KY) said the next voting day for the chamber is April 20, meaning Senators will largely be gone for three weeks, but there will be provisions to come back earlier if needed. As the focus turned to the House, some members were expressing concerns about bill #3, just like senators had previously, and leaders in that chamber will be addressing those concerns, in part by saying Congress will do more. Speaker Pelosi said, "What is important is for us to recognize the good that is in the bill, appreciate it for what it does, don't judge it for what it doesn't, because we have more bills to come."

For those who want to learn more about the current legislation, the second webcast in the EY series discussing Tax in the time of COVID-19 will be held this Friday, March 27 from 1:00-2:00 p.m. Register here.

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