The Senate will reconvene for regular business next week as Republicans and Democrats continue to stake out positions on a fourth major congressional bill to respond to the coronavirus that could top $2 trillion, with funding for state and local governments remaining among the most controversial issues. House Majority Leader Steny Hoyer (D-MD) said that contrary to previous guidance to members, the House will not reconvene next week due to continued medical concerns and the fact that additional legislation remains under discussion.

President Trump has picked up on 'blue state bailout' concerns over additional funding raised by Senate Majority Leader Mitch McConnell (R-KY) last week, fueled by apparent conservative suspicions that the money could be used to fix pre-crisis financial mismanagement by Democratic-leaning states, including pension shortfalls. "Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?" the President tweeted.

Still, Senator McConnell said during an interview with Fox News Radio, "There probably will be another state and local funding bill but we need to make sure that we achieve something that will go beyond simply sending out money." Governors have called for $500 billion in additional funding, while House Speaker Nancy Pelosi (D-CA) has suggested matching the roughly $700 billion spent on the Paycheck Protection Program (PPP) for small businesses. The PPP is the subject of fresh concerns about Small Business Administration (SBA) systems being overwhelmed and other difficulties.

Senator McConnell announced the return to regular business the week of May 4, as he previously anticipated, saying, "The Senate must focus on concrete steps to strengthen our response to this complex crisis. We cannot get distracted by pre-existing partisan wish-lists or calls to paper over decades of reckless decisions that had nothing to do with COVID-19." He said one focus should be preventing employers from being subject to "years of endless lawsuits" related to the virus amid "a massive tangle of federal and state laws," consistent with White House interest in an employer 'liability shield.'

Speaker Pelosi signaled to members in a conference call that the House could soon consider a remote/proxy voting plan whether Republicans are on board or not, according to press reports. She earlier said on MSNBC that guaranteed income proposals may be worthy of attention to meet the needs of those who aren't covered by employer-focused aid programs deployed thus far. Her office said Democrats oppose the liability shield effort that has become a top priority for Republicans, the Washington Post reported.

Whereas previous response bills were negotiated with urgency and provisions were aimed toward the most pressing needs of the crisis, the widening menu of proposals for the next bill and hardening of partisan positions is seen as potentially making agreement on the next package more difficult.

On another front, the White House released a blueprint for state testing plans that describes the roles and responsibilities for states and a partnership between Federal, State, local, and tribal governments, and the private sector. The plan was criticized by Democrats including Senate Health, Education, Labor & Pensions Committee Ranking Member Patty Murray (D-WA), who tweeted, in part, that the plan "does nothing new and will accomplish nothing new. Perhaps most pathetically, it attempts to shirk obviously federal responsibilities by assigning them solely to states instead."

In the 'brighter horizons' category, the Wall Street Journal reported on a group of billionaires and scientists mounting a "Manhattan Project" of sorts to collect and evaluate ideas for coronavirus response, and the New York Times reported on "promising news" on the vaccine front at Oxford University.

IMPLEMENTATION

IRS has announced enhancements to the "Get My Payment" tool for Americans eligible to receive Economic Impact Payments. https://www.irs.gov/newsroom/irs-enhances-get-my-payment-online-application-to-help-taxpayers

Over the weekend, the Department of Health and Human Services (HHS) released additional guidance on the allocation of funds from the $100 Billion Provider Relief Fund established in the CARES Act. https://www.hhs.gov/sites/default/files/20200425-general-distribution-portal-faqs.pdf

EY Alerts and other resources are available here.

The global EY Tax COVID-19 Response Tracker updated through April 26 is available here.

EY Webcasts this week include:

Tuesday, April 28 | Global tax policy in response to COVID-19: An update for businesses 10:00 a.m. ET Register

Tuesday, April 28 | Tax in a disrupted market 1:00 p.m. ET Register

Thursday, April 30 | BorderCrossings … BEPS 2.0 in the context of COVID-19 1:00 p.m. ET Register

Friday, May 1 | Tax in the time of COVID-19 12:00 p.m. ET 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. To determine what information your company needs to know now, join our panelists for a series of conversations about operating the tax function in this time of National Emergency created by the COVID-19 virus. Registration information is forthcoming.

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