House Democrats are still planning to hold a vote Friday on the roughly $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) Act highlighted by about $1 trillion in state and local funding, more direct payments, unemployment insurance (UI), money for testing, and many other provisions. The House is also expected to vote on rules changes to allow remote proxy voting. There is no sign that bipartisan talks on coronavirus response will start soon, but Senate Republicans are increasingly signaling that they are examining approaches on areas of common interest with Democrats like state & local funding and UI.

The WCEY Alert on the House HEROES Act is here.

"We've solicited ideas, our office has, there's a lot of good stuff that's come in the door, much of which is kind of being vetted and thought about and discussed how it might be integrated" into the next bill, second-ranking Senate Republican John Thune (R-SD) said in today's Wall Street Journal.

Ideas thus far include:

• Senator Bill Cassidy (R-LA), a Finance Committee member, has offered a bipartisan approach for $500 billion in additional state and local funding
• Senator John Neely Kennedy (R-LA) wants states to have more flexibility for funds already provided
• Senator Rob Portman (R-OH), also on Finance, is looking at modifications to expanded unemployment benefits to encourage employees to return to work
• Senator Joni Ernst (R-IA) wants tax relief for front line essential workers

Senator Josh Hawley (R-MO) has a proposal for a government guarantee of wages, an issue that has interest across a wide political spectrum. A guaranteed income proposal advocated by Rep. Pramila Jayapal (D-WA) was omitted from the House HEROES Act, spurring calls from progressives to delay the vote. Asked about it on MSNBC May 13, third-ranking House Democrat Jim Clyburn (D-SC) suggested that using the existing CARES framework (such as the Paycheck Protection Program (PPP)) is an efficient approach and "there are things in this bill that will lay a foundation for us getting to what Miss Jayapal and others will want to get to."

Treasury Secretary Mnuchin repeated on Fox News that Republicans want a pause before a next bill. "If we need to spend more money down the road, we'll come back and do that. We're not in a rush to do that this week or next week. We're going to take our time," he said. Senate Democratic leader Chuck Schumer (D-NY) said on the Senate floor yesterday that the House bill "is the urgent and necessary response to what this crisis demands," and Republicans should join Democrats to "talk about where both parties can come together to do something for the nation's wellbeing at this time of urgent crisis."

Fed Chairman Jerome Powell May 13 said lawmakers may need to enact more aid to ward off long-term economic damage. House Speaker Nancy Pelosi (D-CA) cited the comments in a statement saying the "staggering scale of this crisis demands historic action and extraordinary urgency. Members of the House and Senate must work together and not stand in the way of the relief that the American people and the experts know is needed. Families cannot afford to wait."

A Washington Post editorial acknowledged the House bill is "part political statement, part opening bid," but said Republicans should start talks sooner rather than later and, of both sides, the "nation's needs are too urgent to withstand much more partisan posturing."

Prominent health experts told a House select subcommittee May 13 that vast testing capacity is necessary for safely reopening the economy, as Administration doctors told a Senate panel the day before.

President Trump took issue with NIH Dr. Anthony Fauci's comments to Senators about caution in reopening the economy (he warned of serious consequences for areas that re-open without following guidelines or without having the capability to respond to infection spikes and said testing is paramount for providing students comfort that they are safe this fall because treatments or a vaccine will likely not be available). "Look, he wants to play all sides of the equation. I think we're going to have a tremendous fourth quarter … " the President said. "We're opening our country. People want it open. The schools are going to be open."

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through May 13.

An EY Webcast, "Tax in the time of COVID-19: What's happening in international tax, on Capitol Hill and at the IRS," is Friday, May 15 12:00 p.m. ET. 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. After a review of the legislative and economic landscape, this week's panelists will explore: (i) the impact of current year losses on various tax attributes (including the Section 250 deduction and foreign tax credits); (ii) filing tax returns without final Treasury regulations; (iii) the latest from the IRS; and (iv) any breaking developments. Register

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