Democrats objected to Majority Leader Mitch McConnell's (R-KY) request April 9 for the Senate, at the urging of the White House, to approve by unanimous consent $250 billion more toward the CARES Act Paycheck Protection Program (PPP), which provides small business loans with forgiveness terms.

The objection was made by Senator Ben Cardin (D-MD), and Senator Chris Van Hollen (D-MD) offered a Democratic alternative (attached with summary) to which Leader McConnell in turn objected. The alternative reflected House Speaker Nancy Pelosi (D-CA) and Senate Democratic leader Chuck Schumer's (D-NY) calls on April 8 for half of the new PPP funding to be carved out for community-based lenders and other purposes; $100 billion more for health care needs; $150 billion for state & local governments; and a 15% increase to the maximum SNAP food benefit. Senator Van Hollen described other urgent needs related to the crisis, including for a national rapid testing system.

These actions sends both sides to the negotiating table for an interim action, which is separate from the effort to pass a broader bill that may require bringing many lawmakers back to Washington. If and when lawmakers can reach agreement on an interim measure is unclear. On the broader effort, the Speaker has said she hopes to have the House vote out a broader "CARES 2" bill of $1 trillion or more by the end of April, and the Wall Street Journal reported April 9 that House Democrats "have been looking into releasing a CARES 2 bill next week." The Senate is now adjourned until another pro forma session on Monday, April 13.

Leader McConnell said on the floor his bill included no policy changes, just more PPP funding, and was being held hostage by Democratic demands to address additional parts of the CARES Act, "including parts that have not even started to work yet." There is no chance a bill reflecting Democratic demands could pass the Senate and House by unanimous consent, he said, and the President has said he wouldn't sign it. Leader McConnell appealed to Democratic colleagues, "Please do not block emergency aid you do not oppose just because you want something more," adding that nobody believes his bill would be the chamber's last word on the COVID-19 crisis.

Similarly, Speaker Pelosi said in an NPR interview April 8 that the stark $250 billion measure proposed by Senator McConnell "will not get unanimous support in the House."

Even beyond demands for more funding from Democrats, the ability of the House to approve any interim measure without bringing members back to Washington is uncertain given that any member could require a quorum for the chamber to conduct business, as Rep. Thomas Massie (R-KY) did before passage of the CARES Act. Rep. Massie said April 8 on Fox Business that any Democratic effort to move a bill by consent or voice vote in a mostly empty chamber is "not going to fly," and that House leaders should move to enable remote voting for lawmakers.

Breaking news the morning of April 9 is the Federal Reserve's additional actions to provide up to $2.3 trillion in loans to support the economy, available "to support employers of all sizes and communities across the country." The actions include bolstering the effectiveness of the PPP "by supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses."

The IRS has posted a statement on filing corporate refund claims saying: "The IRS is aware that there are questions from practitioners and taxpayers on the filing of corporate and/or individual refund claims that may be available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The IRS is currently exploring available options and expects to issue filing instructions in the coming days. The IRS recommends that taxpayers await further instruction before utilizing traditional processes."

On April 8, FAQs (Frequently Asked Questions) from the Treasury Department that serve as guidance for borrowers and lenders participating in the CARES Act's Paycheck Protection Program (PPP) were updated. The FAQs are the same as those issued earlier this week, with the addition of two new questions to the end (#19 and #20).

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through April 7.

EY Webcasts this week include, on Friday, April 10 at 12:00 p.m. ET, "Tax in the time of COVID-19." Register for this EY Webcast.

For additional information on the Senate bill, see the attachments below.

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ATTACHMENTS

Senate Bill (BAI20245)

Interim Emergency COVID-19 Relief Act