The Senate plans to reconvene next week, but the House is now no longer planning to return to session, leaving timing of a fourth major congressional bill to respond to the coronavirus that could top $2 trillion even more uncertain. Battle lines continue to be drawn on the next measure, with Senate Majority Leader Mitch McConnell (R-KY) telling his members privately that he wants to block inclusion of an infrastructure package that may be pushed by the President and Democrats, the Wall Street Journal reported.

Contrary to previous guidance, Majority Leader Steny Hoyer (D-MD) told members the House is not expected back next week due to continued medical concerns and the fact that additional coronavirus response legislation that Democratic leaders envision as a follow-on to the CARES Act remains under discussion, so will not be ready for consideration. House Speaker Nancy Pelosi (D-CA) said on MSNBC yesterday, "once the Capitol physician told us that it was not proper for us to [return] in the interest of not only members and staff but the custodians, the people who maintain the Capitol, the press who cover us, the staff of the actual legislative chamber, there was no choice for us but to say we will put this off."

The Speaker seemed unbothered by the optics of the Senate being in, saying communication over forthcoming legislation will continue and the last thing members will consider this is a "break." The Speaker cited the larger number of members in the House and said virtual or small group hearings could still be held. The prospect of a return to session was said to have caused significant anxiety among member staffs, and Congress's attending physician reportedly told members that normal operations shouldn't resume in the Capitol until there is a widely administered vaccine.

Asked about Senator McConnell's objection to infrastructure investment in near-term legislation during an event on the Paycheck Protection Program (PPP), President Trump said, "I think Mitch is looking at it, as I do to an extent … We have to rebuild our country … We want to do infrastructure, but a lot of people — a lot of the Republicans — would like to keep that as a separate bill. So we'll see how that works out." Senator McConnell reportedly told his members, "We need to keep the White House in the box," on infrastructure, and, "The Democrats and the White House need to get the message." Prospects for action on infrastructure have been up and down since the start of the crisis — mirroring the hot/cold outlook for the issue in recent years — as the President expressed interest, and Democrats said it would be a focus, then Speaker Pelosi said it may wait. Broadband and water infrastructure seem to have more urgency than roads and bridges.

Asked about additional stimulus payments in the next round of legislation, which Democrats are interested in, President Trump said, "I like the idea of payroll tax cuts," adding that it doesn't require a big distribution process "and it would really be an incentive for people to come back to work and for employers to hire" if the tax were cut on the employer and employee side. "And something like that could happen," he said.

The President continued to express 'blue state bailout' concerns that the additional state and local funding could be used to fix pre-crisis financial mismanagement, including pension shortfalls. "The problem with the states is we're not looking to recover 25 years of bad management and to give them the money that they lost. That's unfair to other states. Now, if it's COVID-related, I guess we can talk about it," he said.

Asked about the US topping 1 million cases, President Trump said, "we're going to show more cases because we're doing much, much more testing." On the topic of a vaccine, he said, "hopefully, we're going to come up with a vaccine. You never know about a vaccine, but tremendous progress has been made."

During the MSNBC interview, Speaker Pelosi expressed concern that the Administration is not "on the basis of any guidance they had scientifically or intelligence-wise, preparing for, if there is a vaccine that is developed: Do we have the capacity to produce [it] in our country? Do we have the supply chain in place to have the ingredients to do that? Do we have the syringes and the vials and the rest, which could take a year to manufacture as much as we need to vaccinate everybody in our country? And do we have in place an ethical standard to fairly — fairly and equally — distribute such a vaccine?"

In a PBS interview, Senate Democratic leader Chuck Schumer (D-NY) said it was the Majority Leader's decision for the Senate to return, and that, "We ought to use this time to exercise our oversight authority and have hearings" on topics like, "Why are we not doing a good job on testing?" Regarding infrastructure investment in forthcoming legislation, he said, "we have a huge economic hole. We have to get out of it. I wouldn't take anything off the table." He said $500 billion sounds about right for additional state and local funding, and as a general matter, urged Senator McConnell to avoid "drawing these ideological, politically driven lines in the sand" and instead move forward on a bipartisan basis.

The top editorial in today's Wall Street Journal raised deficit concerns with money already spent to combat the virus, praised Senator McConnell for encouraging a more thoughtful approach about future spending — "No one is more attuned to the mood of his own members than Mr. McConnell" — and warned, "If Mr. Trump sends Mr. Mnuchin to negotiate another trillion-dollar spending deal with Democrats, he runs the risk of dividing his own party in Congress. A divided GOP will make his re-election chances well-nigh impossible."

In a Washington Post op-ed, House Rules Committee Chairman James McGovern (D-MA) made the case for his plan to temporarily implement remote voting by proxy in the House, saying "The need to adapt is urgent." Rep. Hoyer yesterday announced the Virtual Congress Task Force held their second meeting, and "spoke about how testing has been continuing on different platforms for remote work."

Implementation

IRS COVID Tax Tip 2020-47 addresses "Common errors to avoid when filing for advance payment of employer credits."

The Treasury Department released an interim final rule for the Small Business Administration's PPP, an emergency loan facility established by the CARES Act for smaller businesses affected by the coronavirus pandemic. The rule establishes an alternative method for establishing the maximum PPP loan for seasonal employers.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through April 27.

EY Webcasts this week include:

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 We are living in a time of unprecedented uncertainty. To determine what your company needs to know now, join our panelists for a conversation about operating the tax function in this uncertain time. This week's panelists will provide updates on: (i) Legislative activity and the state of the US economy; (ii) The Coronavirus Aid, Relief, and Economic Security Act's employee retention credit; (iii) IRS filing and compliance guidance; and (iv) Any breaking developments. Register

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