The House vote on the $3 trillion HEROES Act, the opening bid for bipartisan negotiations highlighted by $1 trillion in state and local funding and more direct payments, is in the books and the next step is for a White House or Senate Republican proposal to emerge or and/or bipartisan talks to begin, though that may be weeks away.

"In terms of what the timing would look like, I suspect that doesn't happen until sometime after Memorial Day," second-ranking Senate Republican John Thune (R-SD) said, according to Politico, which also reported that the HEROES Act's expansion of the employee retention credit may be one area that can bring the two sides together. "We're open to it," said House Ways and Means Committee Ranking Member Kevin Brady (R-TX). "We're interested in continuing to make that credit work and are willing to discuss in a bipartisan way how to make it work better and to expand it."

Democrats continue to press the President on testing. Senate Democratic leader Chuck Schumer (D-NY) has sent regular tweets bemoaning that "President Trump still doesn't have an adequate national testing strategy," and, on May 17, also said regarding Republican reluctance to act on further legislation, "To Senator McConnell and the Republicans: Americans can't keep waiting. We need to act NOW." Senate Majority Leader Mitch McConnell has said he imagines a next bill will be needed but is not sure of when.

Speaker Nancy Pelosi (D-CA) said in an interview aired on Face the Nation that the HEROES Act proposes to "go forward in a bipartisan way" to have a plan on testing. "The American people want the economy to open up. We all do. We want our societies to open up. We all do. And in order to do that, we have testing, tracing, treatment, and isolation. And that is the path," she said. Asked about an employer liability shield that Republicans insist on to agree to a next bill, Speaker Pelosi said, "We have no red lines," or ultimatums, and it is not OK to pause before Congress acts again because people are hungry and jobless across America.

Press reports have regularly said the White House's tax proposals are expected to be announced in short order. National Economic Council Director Larry Kudlow told reporters May 15 one of his ideas is a 10.5% rate for companies that bring operations back from overseas. "Why not provide a 50% discount for the corporate tax rate if you're moving from outside the U.S. to the U.S.?" he said.

In a "60 Minutes" interview, Fed Chairman Jerome Powell continued to say more action by Congress may be needed, including to extend expanded unemployment benefits that expire in July and to provide more state and local government funding. "State and local governments have to balance their budget, states do. And if they can't do that, what they'll do is they'll lay people off and they'll cut back on services. And that's not ideal at a time when you're still experiencing heightened medical needs and things like that. So that's something that deserves a careful look," he said, ahead of a Senate Banking Committee hearing Tuesday.

In the 'brighter horizons' category, the New York Times reported May 18: "The drugmaker Moderna said Monday that the first coronavirus vaccine to be tested in people appears to be safe and able to stimulate an immune response against the virus. The findings, which quickly prompted a rally on Wall Street, are based on results from the first eight people who each received two doses of the experimental vaccine, starting in March."

The Washington Post reported on frustrations with President Trump from some Democrats. "At this point, I think the president has proved to be so incompetent that most of us in Connecticut don't want him or the people that work for him micromanaging our response," Senator Chris Murphy (D-CT) said. Others said there are some positive relationships. According to the article, Michigan Gov. Gretchen Whitmer (D), a recent foe of President Trump, "said she has forged solid relationships with others in the administration, including Vice President Pence, whom she described as 'accessible and cordial.'" She also said, "It doesn't mean every single thing we need comes on time and perfectly and when we need it, but they're good to work with and they're doing their best."

Implementation

On May 15, the SBA issued a press release announcing the release of the PPP Loan Forgiveness Application.

The Congressional Research Service has released a report on "Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act: Division B — Revenue Provisions."

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through May 15.

EY Webcasts this week include:

• Tuesday, May 19, International tax talk, 1:00 p.m. ET. During this webcast, part of an ongoing series, a panel of experienced EY professionals will provide you with information on major tax law changes in the countries and jurisdictions covered by our US-based Global Tax Desk Network as well as discuss COVID-19 economic stimulus — measures and potential impacts. Register
• Wednesday, May 20, What to expect from the next CARES Act package and how to manage funding, 12:00 p.m. ET. As the economic and health landscape surrounding the COVID-19 response continues to rapidly evolve, join us as our EY professionals discuss up-to-the-minute information on stimulus funding and how major rules are evolving. We will discuss leading practices to prioritize funding, avoid duplication and comply with FEMA guidelines. Register

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