The focus remains on what may be included in the next congressional bill to respond to the coronavirus crisis, and implementation of the CARES Act enacted last week. In a tweet late March 31, President Trump called for a $2 trillion infrastructure package, after House Democratic leaders said infrastructure is among their priorities for bill #4.

President Trump's tweet said: "With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill. It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4." Asked how such a package would be paid for, President Trump said, "We're going to borrow the money at zero percent interest, so our interest payments would be almost zero and we can borrow long term," during a news conference in which he also said the nation is in for a bad two or three weeks due to the virus.

House Speaker Nancy Pelosi (D-CA) said March 30 that investment in infrastructure is a priority, going beyond roads and transit systems to include broadband and water supply. The Wall Street Journal reported the Speaker as saying health care infrastructure, which is obviously badly strained, would be included, and that while $2 trillion is a lot of money to invest, "the challenge is so great."

The two sides have discussed infrastructure at various points without being able to move forward. Ways and Means Committee Chairman Richard Neal (D-MA) advocated infrastructure above other stimulus ideas in a hearing with Treasury Secretary Steven Mnuchin in early March. Neal and Mnuchin reported having positive discussions over the issue earlier this year, after meetings between Democratic leaders and President Trump in spring 2019 devolved in political acrimony before an approach to funding could be identified.

The Wall Street Journal report said some White House aides want to see the effects of the just-enacted $2 trillion-plus CARES Act before deciding on a next bill, which is the position being taken by top Republican leaders in the House and Senate.

Asked in a radio interview yesterday about a potential phase 4 bill, Senate Majority Leader Mitch McConnell (R-KY) said: "I think we'll have to wait and see. Remember, this bill was only signed into law last Friday. So, it's only been law for about four days. And the Speaker is already talking about another bill that, you know, I think you have to genuinely [beware] of the Speaker in a situation like this." He suggested a wariness that Democrats may try to seize on the crisis "to try to achieve unrelated policy items that you have not been able to get under other circumstances." House Republican leaders have made similar points.

A deal on a congressional response bill #4 is not expected before the week of April 20, though work in the House is expected to be conducted at the committee level in the interim. The House is not expected to meet sooner than Monday, April 20, which is also the next scheduled voting day for the Senate. Leaders of both chambers said lawmakers could be brought back to session sooner if necessary.

CARES Act implementation

Implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law No. 116-136) continues.

The IRS March 31 provided a news release, IR-2020-62, "IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19."

The Treasury Department posted documents — including an overview and information tailored to borrowers and lenders — related to the "Paycheck Protection Program" to provide loans for small businesses.

For reference, EY Alerts on CARES Act implications and more resources are available.

As a reminder, the global EY Tax COVID-19 Response Tracker has been updated through March 31.

EY Webcasts this week include 'Tax in the time of COVID-19' — Tax implications and opportunities stemming from the CARES Act, on Friday, April 3 from 1-2 p.m. Register here.

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