The House today will consider the Senate-passed $484 billion bill providing additional funding for Paycheck Protection Program (PPP) small business loans, hospitals and testing. Speaker Nancy Pelosi (D-CA) yesterday said she expects the bill to pass "in a very strong bipartisan way" by recorded vote, following which "we can move on to the next phase" of legislative response to the coronavirus.

The House will be in session beginning this morning but may not begin voting on the bill until approximately 4 p.m., with members voting in groups in what is expected to be a protracted process required by the current health crisis circumstances. The House will begin with debate on a Resolution Establishing a Select Subcommittee on the Coronavirus Crisis; then move to debate on the interim PPP funding measure; vote on the Subcommittee resolution beginning at approximately 1:30 p.m.; then end with the final vote on the interim bill after a 30-minute recess to allow for a cleaning of the House Chamber.

The WCEY Alert on the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266) is here.

The Select Subcommittee will study the issue of potential remote/proxy voting in the House and the vote on the resolution establishing it supplants previous plans to vote on an actual remote voting plan that were scuttled after the Speaker consulted yesterday morning with House Republican leaders, who want Congress to continue to conduct business in-person.

Senate Majority Leader Mitch McConnell (R-KY) also wants to be conducting regular business, saying in a Hugh Hewitt radio interview yesterday that "I haven't seen anything that would discourage me" from going to back in session on May 4. "We need to have hearings, and we need to confirm judges," he said.

Future legislation

Regarding future legislation, Leader McConnell reiterated his previously stated concerns over the deficit impact of the $2.7 trillion in revenue already spent to respond to the coronavirus and insisted that Congress hit the "pause button" on coronavirus response legislation until the Senate fully returns.

The prospect of additional funding for state and local governments is shaping up to be a battleground issue, with McConnell saying such aid needs "to be thoroughly evaluated" and be prohibited from being "spent on solving problems that they created for themselves over the years with their pension programs." He said he would "certainly be in favor of allowing states to use the bankruptcy route," and "there's no good reason for it not to be available." The comment didn't sit well with some, including New Jersey Gov. Phil Murphy (D), who called encouraging or "almost hoping" for bankruptcy "irresponsible."

Democrats had called for state and local funding in the interim measure being processed now but Republicans would not accede to the request, though Speaker Pelosi has touted the success of her party in winning PPP concessions and hospital and testing funding in the bill after Republicans first called for a clean program funding bill two weeks prior. Republicans continued to criticize Democrats for delaying PPP funding. The brokering of the past two coronavirus bills — during which Democrats have weathered criticism for delaying aid to insist on changes and additions to Republican-authored proposals — has been the subject of press analysis with the next major negotiation among congressional leaders and the President on the horizon.

Senate Democratic leader Chuck Schumer (D-NY) has said the next bill would need to be similar in size to the $2 trillion CARES Act. In addition to Democratic leaders, support for additional funding for states has come from President Trump, who has said such funding should be included in the next major bill; state governors from both parties; and some Senate Republicans, including Rob Portman (R-OH), who was quoted by Politico as saying he was working with other senators on a bill for "additional and more flexible" funding for states. Senators Bill Cassidy (R-LA) and Bob Menendez (D-NJ), both Finance Committee members like Portman, have laid out a bipartisan approach for a $500 billion fund to help states and local governments.

Speaker Pelosi said on Bloomberg News yesterday "now we have to go further into mitigation, unfortunately, to help state and local. Now, state and local means this: it means the health care worker, the police and fire, the first responders, the emergency services people, the teachers in our schools, the transportation workers who get vital — essential workers to work. Again, it is about the people. And these people are risking their lives to help save other lives and now they are losing their jobs."

Other Democratic priorities for the next major bill include funding for the U.S. Postal Service, housing assistance, hazard pay for front-line workers, worker protections, election security funds and food assistance. President Trump tweeted that it should include fiscal relief for "State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth."

Implementation

Yesterday, the staff of the Joint Committee on Taxation released a description (JCX-12-20) of certain provisions of the CARES Act.

Also, the Department of Health and Human Services (HHS) announced how it plans to disburse additional funding from the CARES Act's $100 billion provider relief fund, of which $30 billion has already been allocated based on provider's share of 2019 Medicare fee-for-service reimbursements.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through April 21.

EY Webcasts this week include, on Friday, April 24 at 12:00 p.m., "Tax in the time of COVID-19: How the pandemic is affecting the economy, compliance and transfer pricing." Events like the spread of the coronavirus (COVID-19) have made reacting to trade disputes and continued implementation of the Tax Cuts and Jobs Act much more difficult. This week's panelists will explore: (i) Legislative update and the state of the economy; (ii) What the economic downturn means for transfer pricing; (iii) NOL carrybacks: the significance of the IRS revoking Revenue Ruling 71-533 which addressed the special 10-year statute of limitations for claims for refund or credit related to foreign tax credits; and (iv) The latest compliance updates from the IRS. Register

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