The Senate may take up the House-passed Paycheck Protection Program (PPP) revision bill; the Congressional Budget Office (CBO) forecast prolonged economic strain from the coronavirus; and protests across the country and the issues underlying them are fueling debate in Washington and elsewhere and influencing the congressional agenda.

Senate Majority Leader Mitch McConnell (R-KY) announced he hopes the chamber will take up the bill (HR 7010) that passed the House overwhelmingly 417-1 last week — which would extend the loan forgiveness "covered period" to 24 weeks and reduce the portion of the loan that must be devoted to payroll costs to 60% — suggesting that objections from some senators may have subsided. Senate approval would eliminate the need for bicameral negotiations and another House vote.

In a letter to Senate leaders, CBO said:

• cumulative nominal output is expected to be $15.7 trillion lower in the next decade than previously projected
• closures and distancing are expected to curtail consumer spending
• response legislation has partially mitigated deteriorating economic conditions
• GDP won't return to the previously forecast level until 2029

The Wall Street Journal reported that protests are impeding plans for some businesses to reopen from virus lockdowns. Politico reported on business reopenings being hampered by "vague testing guidance" from the federal government, which has put much of the onus on states, as well as by testing costs, capacity and liability issues.

After a reportedly emotionally charged call among House Democrats yesterday, some members said the near-term agenda will include swift action to address matters of racial inequality. The House has already passed the $3 trillion HEROES Act as a bid for the next virus bill. Rep. Mike Thompson (D-CA) tweeted that Democrats are "united in our commitment to take action and take action now" on immediate and long-term solutions to address systemic racial inequalities.

Tax Notes reported on additional details regarding the EU's proposal for a €10 billion tax on corporations from last week. While the EU said details need to be specified, including whether it would be a lump sum or proportional to a firm's size or profits, one commissioner was cited as saying many large companies with global annual turnover greater than €750 million could be affected. Bloomberg TV also reported this morning that the US plans to open investigations into the digital services taxes (DSTs) adopted by India and Spain, which could lead to tariffs being imposed on those countries' exports to the US, according to their sources. An announcement could come today (June 2).

The House is not in session this week. In his weekly press conference today, Majority Leader Steny Hoyer (D-MD) said that while the House doesn't plan any floor votes until June 30, the Appropriations Committee will mark up annual spending bills toward the end of June and early July, with an eye toward completing floor votes on them by the end of July.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through June 2.

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