The Senate is in session this week and may take action on legislation to make changes to the Paycheck Protection Program (PPP). The House is not planning to conduct any votes, but an Appropriations subcommittee will hold a hearing with the CDC's Robert Redfield. Protests in Washington and elsewhere, and the issues underlying them, have the attention of lawmakers and the public.

The House last week passed its own PPP bill, to extend the loan forgiveness covered period to 24 weeks and reduce the payroll requirement to 60%. Senator Marco Rubio (R-FL) is among those with concerns about the House bill, making it likely the Senate will pass a different measure requiring bicameral negotiations and/or another House vote. It appears this issue may be dealt with prior to a large bill #4.

Senator Ron Johnson (R-WI) called for changes to the PPP before any new money is authorized, including "reforms that will prevent future funds from flowing to organizations that don't need them."

The question remains what situation will prompt action on a next bill that Republican leaders don't see being negotiated until at least late June. Action-forcing events could include exhausting PPP funds, expiration of expanded unemployment benefits at the end of July, or pressures from record unemployment numbers or state and local government shortfalls. The Wall Street Journal June 1 reported on state and local governments' having to cut services or borrow to respond to revenue shortfalls.

The Washington Post reported over the weekend on Senator Rob Portman's (R-OH) proposal for a $450 weekly back-to-work benefit, which second-ranking Senate Republican John Thune (SD) said "has actually got some traction." House Republicans and the Administration are also interested in the issue of preventing expanded unemployment benefits from keeping employees from returning to work.

The crisis and protests are both being viewed with an eye toward the elections, with new polls showing some favorable numbers for presumed Democratic nominee Joe Biden and some observing that how the nation and economy recover from the virus could swing the election.

On taxes, the Wall Street Journal reported over the weekend about Democrats sticking to tax increase proposals even amid a reeling economy, though Senate Finance Committee Ranking Member Ron Wyden (D-OR) was quoted as saying that while the priority remains making sure people pay their fair share in taxes, if Democrats have new power in the presidency or a Senate majority in January, they will first act to repair economic damage before turning to tax increases.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through June 1.

———————————————