The House is back today (May 27) and plans to vote today or tomorrow on a bill (H.R. 6886) on the suspension calendar to make changes to the CARES Act Paycheck Protection Program (PPP). The Senate is out this week for the Memorial Day recess but will have a pro-forma session tomorrow.

Regarding a next bill, National Economic Council Director Larry Kudlow said on Fox News yesterday that Senator Rob Portman's (R-OH) proposal for a temporary $450/week bonus to encourage employees to return to work is "something we're looking at very carefully." Kudlow said Senator Portman "understands incentives and disincentives" and has a "good idea" in the proposal for workers to receive their wages plus a $450 bonus through July 31 as a means of warding off situations where staying on unemployment with expanded benefits is more lucrative than returning to work. Director Kudlow said the President is a firm supporter of a payroll tax cut on the worker side and echoed comments by Senate Majority Leader Mitch McConnell (R-KY) that the $600 expanded unemployment benefit will not be extended past its July expiration in the next round of coronavirus response legislation. "I frankly do not believe the $600-plus up will survive the next round of talks, but I think we will have substitutes to deal with that issue," he said. He also suggested Administration ideas would be put forward soon.

An editorial in today's Washington Post noted that the House-passed HEROES Act extends expanded unemployment benefits through the end of the year, Senator McConnell has vowed to not extend the benefit, and said "what's really needed" is a policy that confronts the prospect that high unemployment is "here to stay" but makes it worthwhile for workers to accept job offers. Encouraging workers to rejoin the labor force as soon as possible is "in everyone's interest" and Congress "must work urgently on a bipartisan basis to strike the right balance."

An editorial in today's Wall Street Journal continued to warn against additional crisis response spending, saying there isn't a clear need for a next bill, the House-passed HEROES Act's goal is "income redistribution," and that Republicans should "unite behind an agenda for economic revival … aimed at the electorate in November" rather than compromise with Democrats. The editorial opposed including infrastructure spending, said a payroll tax cut isn't the best policy but "beats more spending," and suggested President Trump could propose that every private investment made for the rest of this year be exempt from any capital gains tax.

The PPP bill (H.R. 6886) in the House, sponsored by Reps. Roy and Phillips, includes provisions to:

• extend the loan forgiveness 'covered period' from eight weeks to 24 weeks
• give employers until the end of the year to hire workers back and relax rehiring requirements
• end the requirement that 75% be spent on payroll and "not limit the non-payroll portion of a forgivable covered loan amount"
• make clear that employers in the PPP program can also benefit from the CARES Act payroll tax delay.

House Majority Leader Steny Hoyer (D-MD) said yesterday that a deal on the PPP, for which "the timeframe that was set was too short, unfortunately," could be reached quickly with the Senate, where a bill set for consideration extends the covered period to 16 weeks but doesn't change the 75% payroll requirement.

The other main House agenda item this week is Foreign Intelligence Surveillance Act (FISA) reauthorization legislation, which Republicans are waging opposition to. "I hope all Republican House Members vote NO on FISA until such time as our Country is able to determine how and why the greatest political, criminal, and subversive scandal in USA history took place!" President Trump tweeted, and press reports noted that he has suggested FISA was used to improperly scrutinize his 2016 campaign.

The President also tweeted, "We pass 15,000,000 Tests Today, by far the most in the World. Open Safely!" Democrats have criticized the Administration over testing capacity and continuing to put the onus on the states rather than establishing a federal framework.

House Speaker Nancy Pelosi (D-CA) said on MSNBC yesterday, "We need to test. We're not testing enough. And we should be testing even more people who don't have symptoms, because this is asymptomatic. Some people who have it don't even know it." She repeated that the HEROES Act is a "first offer" toward a bipartisan bill, "we know we have to negotiate," state and local government funding is necessary, and said of Republicans, "they will come around."

On process, House Republican leader Kevin McCarthy (R-CA) and other Republicans have filed a lawsuit challenging the constitutionality of House remote/proxy voting. Speaker Pelosi released a statement saying, "The House's position that remote voting by proxy during a pandemic is fully consistent with the Constitution is supported by expert legal analyses."

IRC Section 250 foreign derived intangible income (FDII) / global intangible low-taxed income (GILTI) deduction final regulations have been posted as under review at OMB's Office of Information and Regulatory Affairs (OIRA).

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker updated has been through May 21.

EY Webcasts this week include:

• Thursday, May 28. Continuing developments on BEPS 2.0 in the new economic environment, 10:00 a.m. ET. With the next milestone for the OECD the upcoming Inclusive Framework session at the start of July and G20 meetings scheduled for the autumn, this EY Webcast will focus on the current developments with respect to the BEPS 2.0 project and current country actions with respect to DSTs and will look at how the global health crisis and economic downturn is affecting country activity in both areas. Register.
• Friday, May 29. Tax in the time of COVID-19: What's new and notable in tax credits, refunds and at the IRS, 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. After a review of the legislative and economic landscape, this week's panelists will explore: (i) bonus depreciation (qualified improvement property), Alternative Minimum Tax Credit refunds and Section 165(i); (ii) the Employee Retention Credit; (iii) IRS operations and guidance; and (iv) any breaking developments. Register.

———————————————