The House Democratic CARES 2/COVID 4 bill was still being drafted yesterday afternoon but could be released as soon as today, as Democratic members are reportedly set to hold calls on various aspects of the bill, including health care and testing; the Paycheck Protection Program (PPP), supporting nonprofits, and housing assistance; aid to state and local governments; and direct payments, unemployment benefits, and pension provisions. Leaders have said it is possible the House could convene for a vote on the measure as soon as Friday, and if it is not ready to go then, the next target would be next Tuesday.

The forthcoming package could address provisions included in a bill released by House Democrats in the run-up to the CARES Act (that did not make it into that bipartisan bill) and could be similarly aspirational like that proposal. Speaker Nancy Pelosi (D-CA) has described the forthcoming package as a starting point and setting a standard for the next coronavirus response measure, with the recognition that bipartisan negotiations will be eventually be needed to enact a bill.

Republicans don't appear poised to begin those talks anytime soon. Senate Majority Leader Mitch McConnell (R-KY) said he is in constant contact with the White House over how to proceed and, "We have not yet felt the urgency of acting immediately. That time could develop, but I don't think it has yet," Politico reported. Deficit concerns have been cited, but even some normally hawkish conservative economists were cited by the Washington Post as saying an economic crisis of this magnitude will require more spending, and soon. There is also lingering Republican resentment that additional funding will go to Democratic-leaning states. Senate Republicans are expected to meet with President Trump at the White House at 4 p.m. today.

The expected inclusion of a national approach to virus testing in the forthcoming Democratic measure appears to reflect Democratic frustrations that the White House has failed to take the reins on the issue. President Trump yesterday announced that money is being sent to states for testing and the nation has "prevailed" regarding the virus, and a White House fact sheet said $11 billion would be dedicated and, "By the end of this week, more than 300 retail testing sites will be operational to serve Americans in 47 states and D.C., prioritizing access in underserved communities."

Senate Democratic leader Chuck Schumer (D-NY), who has regularly called out the White House over lack of a testing strategy, said on MSNBC last night that it was perhaps the greatest failure of the Administration. "The president at that press conference said that they had really met the moment and prevailed. Really? We have so many deaths. We have increased number of diseases. We have people who don't have food, are worried about the roof over their head and we have prevailed?" he said. Senator Schumer said the President's push to get people working again is at odds with the nation's testing ability, which is short of what is required for people to find comfort in going back to work or to restaurants or other places.

Senator Schumer noted that Dr. Anthony Fauci of NIH will testify before the Senate Health, Education, Labor and Pensions (HELP) Committee on "COVID-19: Safely Getting Back to Work and Back to School" today without sharing the podium with the President and should "Go for it. Tell us the truth." Administration witnesses and Chairman Lamar Alexander (R-TN) are expected to participate remotely due to virus exposure concerns. MSNBC host Lawrence O'Donnell, himself a former Senate staffer, said, "Senator Elizabeth Warren is a member of the committee. There are very experienced members of the committee who could give us the kind of dialogue we have not seen yet."

The New York Times reported that Dr. Fauci will tell the Committee that opening the nation prematurely will "set us back on our quest to return to normal."

Implementation

One area where the parties may agree is on changes to the PPP small business loans-to-grants program. Speaker Pelosi said she wants to provide more resources and extend the loan period and, regarding the forgiveness requirement that 75% of loans be spent on payroll, "I don't even know why we have that in there." PPP amounts are to cover an eight-week period, which restaurant trade groups want extended. Treasury Secretary Mnuchin said on CNBC yesterday that he is sympathetic to the needs of restaurants. "Many of the restaurants are just beginning to open up and have said that they'd really like to hold the money. They can't do that; that's not something we can do. But we'll look at a technical fix," he said.

IRS and Treasury said yesterday they have successfully delivered nearly 130 million Economic Impact Payments to Americans in less than a month, more are on the way, and that some Americans may have received a payment amount different than what they expected. Payment amounts vary based on income, filing status and family size. They illustrated common scenarios that may explain receiving a different payment amount than expected.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through May 8.

An EY Webcast, "Tax in a disrupted market," is today, May 12, at 1:00 p.m. ET. This webcast, the seventh in the series, will include topics such as cost reduction, legal entity rationalization, attribute utilization and tax supply chain considerations amidst the disruption caused by COVID-19. Our panelists will discuss tax considerations and attribute planning related to simplification of legal and operational structures to enhance liquidity. Register

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