Senate leaders are still hoping to pass by the end of the week a House-passed bill (HR 7010) to extend the Paycheck Protection Program (PPP) loan forgiveness covered period to 24 weeks and cut the amount of the loan that must be used for payroll costs to 60%, among other changes, though there are reportedly still some objections from one or two Republican senators. Beyond Congress clearing that measure, the July 4th recess is eyed as the next informal deadline for enacting additional coronavirus relief and the White House is reportedly stepping up its efforts to assemble and advocate for proposals for the next bill.

Amid questions about what future conditions could compel lawmakers to act further, an article in the June 3 Washington Post framed the expiration of expanded unemployment benefits in July, depleted state and local government funding, and exhaustion of funds for relief programs like the PPP a new "fiscal cliff," borrowing the term used to describe the expiration of tax cuts and other policies in the previous decade. The story noted that Republicans are supporting "return to work" bonus proposals as an alternative to extend expanded unemployment benefits, but "the path forward for a compromise with Democrats is far from clear."

The Wall Street Journal said return-to-work proposals are among the items the White House is assembling as President Trump prepares to meet with advisers to discuss plans as soon as this week. The report also mentioned the administration's interest in payroll and capital gains tax cuts as well as tax deductions or credits for tourism; making permanent expensing provisions set to phase down after 2022; and provisions related to business "relocating from China and other areas."

Separately, the USTR took action June 2 to scrutinize digital services tax proposal in the European Union and countries like India, Italy, Turkey and the UK and perhaps could respond with tariffs, in an approach very similar to that taken with France last year.

Senators are also focused on protests across the nation and the issues underlying them. Senate Majority Leader McConnell (R-KY) yesterday said, "There may be a role for Congress to play in this. … And we'll be talking to our colleagues about what, if anything, is appropriate for us to do in the wake of what's going on." The New York Times reported on Democratic efforts to enact a legislative response to issues related to the protests and some Republican senators' criticizing President Trump's response, including measures taken to disperse protesters near the White House on Monday.

Also June 2 the Department of Labor sent its investment advice proposed rule, expected to be a new exemption rather than a rewrite of the rule, for OMB review.

The Senate Finance Committee June 3 announced that it will hold a hearing next week (Tuesday, June 9) on "The CARES Act and the Role of Unemployment Insurance During the Pandemic." The first witness will be Labor Secretary Eugene Scalia, with a second panel following.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through June 3.

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