Negotiations between the Administration and congressional Democratic leaders on an interim coronavirus measure to at least provide $250 billion more for the CARES Act Paycheck Protection Program (PPP) are set to continue today, and the Small Business Administration (SBA) said this morning the program is out of money. If an agreement can be reached, action could occur during the Senate pro forma session set for today at 3 p.m.

Treasury Secretary Steven Mnuchin and Senate Democratic leader Chuck Schumer (D-NY) spoke yesterday, and aides to House Speaker Nancy Pelosi (D-CA) spoke with the Secretary and Treasury staff and agreed to continue discussions today, the Wall Street Journal reported. Secretary Mnuchin and SBA Administrator Jovita Carranza issued a joint statement yesterday urging Congress to appropriate additional funds for the PPP.

In exchange for their support, Democrats insist the measure include changes to the program, more food assistance money, $100 billion more for health care needs, and $150 billion for state & local governments. Republicans don't necessarily disagree with those priorities but want them addressed in the next major response bill that is being developed over a longer timeframe and will likely require bringing most members back to Washington to pass. At least one Democratic Senator, Kyrsten Sinema (D-AZ), was emphasizing the urgency for PPP funds over the other issues, tweeting "the Senate should approve add'l funding by unanimous consent ASAP. Small businesses need our help to survive during this emergency."

In a Wall Street Journal op-ed, House Republican leader Kevin McCarthy (R-CA) and Senator Tim Scott (R-SC) said "Democrats want to replace simplicity with more bureaucracy" in the program by "mandating that small-business owners submit personal data about themselves and other owners and investors to their banks and the federal government."

Rep. McCarthy and Senate Majority Leader Mitch McConnell (R-KY) issued a joint statement last night recapping Democratic objections to GOP efforts to move a clean PPP funding bill beginning a week ago, and saying, "It has been stunning to watch our Democratic colleagues treat emergency funding for Americans' paychecks like a Republican priority which they need to be goaded into supporting."

It is unclear how Leader McConnell and others may react to a deal cut between Secretary Mnuchin and Democratic leaders. Politico reported GOP wariness over the talks, with Senator John Neely Kennedy (R-LA) saying, "there are a lot of Republicans that are going to have a lot of questions of whatever the secretary and the speaker agree to."

The Federal Reserve today announced that its PPP Liquidity Facility "is fully operational and available to provide liquidity to eligible financial institutions, which will help support small businesses."

Reopening the economy

On another front, President Trump seems to be moving on, for now, from the business advisory panel approach of seeking input on reopening the economy in favor of direct calls with CEOs. "Today I spoke with the leaders of many of our nation's most renowned companies and organizations on how to achieve the full resurgence of the American economy, my discussions included top leaders in health and healthcare, transportation technology, financial services, food, beverages, hospitality, real estate, retail, agriculture, construction, energy, labor, manufacturing, and sports industries," the President said. The Washington Post reported that many CEOs "urged the White House to focus more on mass testing," and the Wall Street Journal said banking and financial services executives suggested a dramatic increase in testing is necessary to give the public the confidence to return to work, eat out and shop.

Asked about the issue during a news conference, President Trump said, "we have great tests. And we want the states to administer these tests, for the most part."

Senator Patty Murray (D-WA) and other Democrats yesterday called for $30 billion in emergency funding for testing and outlined a proposal in a white paper, "A Roadmap to Reopening by Ensuring a Speedy and Ubiquitous Lab Testing System (RESULTS)."

The President today asked a bipartisan, bicameral group of members of Congress to join the political advisory panel on reopening the economy, Politico reported. He is hosting calls with members this morning.

He also suggested yesterday that "the Constitution provides a mechanism for the President to fill positions in such circumstances — the 'recess appointment,' it's called — the Senate's practice of dabbling into so-called pro forma sessions where no one is even there," and suggested that he may use it to confirm judges and other nominees while Congress is out of session. "The Senate should either fulfill its duty and vote on my nominees or it should formally adjourn so that I can make recess appointments," the President said.

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The global EY Tax COVID-19 Response Tracker updated through April 14 — as well as additional trackers on Tax Controversy, Labor and Employment Law, and Immigration Policy — is here.

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